O.V. Kulagina, certified tax consultant

The price of the goods is below cost, or Tax risks of the sale

It often happens that a new line of products is launched for sale even before the products of the old one are completely sold. Or maybe it's just that the demand for the product has decreased significantly, or maybe the company is exploring a new market segment. And then the goods are sold at heavily discounted prices. But many accountants are afraid to reduce the sale price below the purchase price, since this is allegedly prohibited by law and is fraught with additional taxes. Let's see if this is actually the case.

WARNING 1. Selling below cost is prohibited by law

In the general case, the contracting parties determine the price of the goods themselves. The exception is prices that are regulated by the state, for example, in the field of electricity, gas supply, communications and paragraph 1 of Art. 424 of the Civil Code of the Russian Federation; paragraph 1 of Art. 4, art. 6 of the Law of 17.08.95 No. 147-FZ; sub. 4 p. 2, p. 4 art. 8 of the Law of December 28, 2009 No. 381-FZ. So for a regular contract, there is no lower price limit on the part of the Civil Code. The main thing is that this price suits both parties.

The Federal Antimonopoly Service also monitors prices in order to prevent the abuse of “big players” in the field of pricing. However, companies that are not able to influence the price situation in the market by their actions alone or with a group of other companies have nothing to fear. Part 1 Art. 5, part 1, art. 7, paragraph 1, part 1, art. 10 of the Law of July 26, 2006 No. 135-FZ.

In 2013, the FAS prepared amendments to the Law on Trading Activities, advocating a ban on sales at a price below cost, but the project did not find support in the government, was sent for revision, and has not even reached the State Duma yet.

Output

If your company does not have a decisive influence on the pricing in the market and does not sell goods, the prices of which are regulated by the state, then the price floor is not limited.

FEAR 2. Loss on sale at a price below cost is not taken into account for tax purposes

Let's just say that this is not the case. The tax base for income is calculated in aggregate for all transactions paragraph 1 of Art. 274 Tax Code of the Russian Federation. And only if a special procedure for calculating the tax base is established, income and expenses from these operations are considered separately. For example, a special procedure is provided for transactions with securities and paragraph 2 of Art. 274, art. 280 Tax Code of the Russian Federation. In addition, there is a direct prohibition on recognizing in expenses the price difference between the market price and the sale price of the goods to the employee. If you sold a product to an employee at a non-market price, which is even lower than the purchase price, then it is obvious that such a price difference is formed and, in fact, it represents a loss when selling below cost and paragraph 27 of Art. 270 Tax Code of the Russian Federation.

But with regard to other transactions of sale and purchase at a loss, there are no special rules. Therefore, schematically, it looks like this: income from all transactions is summed up and all expenses from the sale recognized in the reporting period are deducted from the amount received. paragraph 1 of Art. 247, sub. 3 p. 1, p. 3 Art. 268 Tax Code of the Russian Federation. It is obvious that the loss-making transaction revenue will be recognized in income from sales along with the revenue from other sales, and the expenses on it will be recognized together with the expenses on other transactions. If you are not systematically working in the red, then it is generally unrealistic to detect losing trades. They will simply drown in the total mass, and they will not be visible in the income tax return. paragraph 2 of Art. 268 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance dated September 18, 2009 No. 03-03-06/1/590.

With a “profitable” simplification, a sale at a loss does not affect the amount of tax in any way: how much money was received for the goods - from that amount the tax was calculated paragraph 1 of Art. 346.15, paragraph 1 of Art. 346.17, paragraph 1 of Art. 346.18 of the Tax Code of the Russian Federation. If the simplification is “income-expenditure”, then in this case it is not so easy to track a losing transaction, income and expenses on it can generally fall into different reporting and even tax periods. After all, expenses are recognized as payment for the goods to the supplier and its sale, and income - upon receipt of money from the buyer. paragraph 1 of Art. 346.15, sub. 23 paragraph 1 of Art. 346.16, paragraph 1, sub. 2 p. 2 art. 346.17 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of October 29, 2010 No. 03-11-09/95. When selling goods to employees, the price difference between the retail price and the sale price is also not taken into account in expenses.

OUTPUT

Tracking a losing trade is unlikely unless you are working negatively systematically. It is unlikely that the tax authorities will do this, because the loss from sales, if the goods are sold to non-employees, is still taken into account for tax purposes.

FEAR 3. If the sale price is lower than the purchase price, the tax authorities charge additional taxes based on the market price

There is some truth in this judgment. It all depends on whether such a transaction is controlled. Let's say you sold apples at a price lower than the purchasing third-party Russian company. Then you can safely look into the eyes of the inspector, since the price of the transaction between parties that are not dependent on each other is initially considered to be the market price. paragraph 1 of Art. 105.3 of the Tax Code of the Russian Federation. That is, the tax authorities will not check your prices for compliance with their market prices. Simply because this type of verification is provided only for controlled transactions, and transactions between independent Russian organizations are not classified as controlled paragraph 1 of Art. 105.17, paragraph 1 of Art. 105.14 of the Tax Code of the Russian Federation.

“But what about Art. 40 NK? - you ask. Despite the fact that the notorious Art. 40 of the Tax Code on market prices has not yet been canceled, its effect has been significantly narrowed: it applies only to those transactions for which income and expenses are recognized before 01/01/2012. That is, at the moment, the tax authorities can only try to recalculate taxes based on market prices if the “sale” took place in 2011, since 2010 and earlier periods can no longer be covered by the on-site audit scheduled in 2014. paragraph 4 of Art. 89 Tax Code of the Russian Federation

TELLING THE MANAGER

If the seller independently calculates and pays taxes at the market price from income from a controlled transaction, then the buyer will not be able to recalculate the tax base downward. After all, he will have such a right only if, after checking prices and paying the arrears by the seller, the buyer receives a notification from the tax authority to carry out symmetrical adjustments to paragraph 1 of Art. 105.3, paragraphs. 1, 2 art. 105.18 of the Tax Code of the Russian Federation.

But if you sold goods at a non-market price and such a transaction is controlled for you, for example, you sold apples for mere pennies to your subsidiary on OSNO, the amount of income from transactions with which exceeded the uncontrolled threshold (in 2013 - 2 billion rubles, in 2014 - 1 billion rubles) sub. 1 p. 2 art. 105.14 of the Tax Code of the Russian Federation, then in this case I have to paragraph 4 of Art. 105.3 of the Tax Code of the Russian Federation:

<или>voluntarily calculate income tax and VAT based on the market price (immediately or at the end of the tax period) pp. 3, 6 art. 105.3 of the Tax Code of the Russian Federation;
<или>at the “price” check to prove to the tax authorities that the apples were impossibly sour and the transaction price is well within the range of prices at which such goods are sold by independent persons and sub. 1 p. 1, p. 3 Art. 105.7, paras. 1, 7 art. 105.9 of the Tax Code of the Russian Federation. If the tax authorities nevertheless consider that the prices were incomparable with the market ones, then after the “price” check they will go to court in order to recover the arrears and interest on income tax and VAT paragraph 5 of Art. 105.3, sub. 4 p. 2 art. 45 Tax Code of the Russian Federation. And if the income from the transaction relates to 2014, then the tax authorities can also impose a fine in the amount of 20% of the amount of unpaid taxes in paragraph 1 of Art. 129.3 of the Tax Code of the Russian Federation; paragraph 9 of Art. 4 Law of July 18, 2011 No. 227-FZ.

But sellers’ transactions on the simplified taxation system do not fall under price control, since such organizations do not pay either income tax or VAT, for which additional charges are possible during “price” checks. sub. 1, 4 p. 4 art. 105.3, paragraph 2 of Art. 346.11 of the Tax Code of the Russian Federation.

Output

The statement that taxes will be recalculated based on market prices is only partly true. It all depends on whether the transaction is recognized as controlled. If so, then you will have to prove to the tax authorities that the transaction price is comparable to the market price. If not, then there is no need to worry about additional charges.

FEAR 4. The costs of purchasing goods sold at a loss are not economically justified, and therefore they cannot be taken into account when calculating income tax

Every business organization, by definition, seeks profit and paragraph 1 of Art. 50 of the Civil Code of the Russian Federation. However, one-time losing trades also fit into this concept, because the desire to systematically make a profit is fraught with risk and does not exclude a loss. In addition, by selling today at a low price, the company insures itself against increasing losses in the future, therefore, the management assesses the profitability of the transaction precisely at the current moment.

In which cases transactions between related parties are not considered controlled, you can read in the article “On interdependence and controllability frankly”:

The Tax Code does not give tax authorities the right to assess how efficiently a taxpayer manages capital, and therefore the concept of “economic feasibility of expenses” must be considered through the focus of expenses on generating income in Art. 252 of the Tax Code of the Russian Federation; Definitions of the COP dated 12/16/2008 No. 1072-O-O (clause 2 of the motivational part), dated 06/04/2007 No. 366-O-P (clause 3 of the motivational part), dated 06/04/2007 No. 320-O-P (p. .3 motivational part). And in the example with apples, the expenses for the purchase of goods were economically justified, because, firstly, they were not purchased for a charity event, but were going to be successfully sold at a profit. Another thing is that the circumstances have changed somewhat and now it is much more important to release the working capital frozen in an unsuccessful batch of apples. And secondly, they still received income, because there is some kind of revenue Letter of the Federal Tax Service for the city of Moscow dated 02.08.2012 No. 16-15 / [email protected] . And no one is safe from losses. Decrees of the FAS MO dated July 18, 2013 No. A40-86022 / 12-20-468; FAS SZO dated 16.06.2011 No. А56-60826/2010.

You can do the following to confirm that your expenses are reasonable. First, the manager must issue an order to mark down the goods. Secondly, the markdown must be justified. For example, you can attach to the order the conclusion of a merchandiser or sales manager, that de apples of last year's harvest, it is impossible to store them for more than 1 month in the conditions of your warehouse, and in case of loss of the presentation, the losses from write-offs will be much higher, etc. In any In this case, the justification should state for what purpose and why you decided on a losing trade. All this will help you strengthen your position in the event of a dispute with the tax authorities.

OUTPUT

Expenses will be economically justified if they were aimed at making a profit. The end result is not decisive.

FEAR 5. If the goods are sold at a loss, then VAT cannot be deducted on them.

The tax authorities are inclined to see in a loss-making transaction an unreasonable tax benefit, because the deduction on the acquisition was greater than the amount of tax accrued on the sale of the goods. And all because the reasonable economic goal of concluding a loss-making transaction is not at all obvious to the tax authority. And as we remember, its absence is one of the signs of receiving unreasonable tax benefits. pp. 1 , , 9 Resolution of the Plenum of the Supreme Arbitration Court dated 12.10.2006 No. 53.

Therefore, just as to justify expenses, you need to stock up on arguments in your favor in advance. The same documents will do: the order of the head, the conclusion of commodity experts, financiers, etc.

In litigation, the case is resolved in favor of the taxpayer if he provides the court with evidence of a reasonable economic goal that was pursued when concluding a loss-making transaction and Decrees of the FAS MO dated May 30, 2013 No. A40-40420 / 12-91-224, dated May 5, 2012 No. A40-43413 / 11-90-184; 15 ААС dated 02.04.2013 No. 15AP-2735/2013. But if there was no such goal, and by all indications, the organization is a participant in the tax scheme, then do not expect mercy from the tax authorities. In addition to the non-obvious economic goal, controllers will also identify other signs of obtaining an unjustified tax benefit, for example, the inability to fulfill the contract. For example, an organization purchased a batch of goods, and it is not clear where it was stored for a whole month, since the organization does not own or lease storage facilities, and although the contract for safekeeping was concluded, it was not executed. Decree of the FAS SKO dated January 24, 2013 No. A32-3122 / 2012.

OUTPUT

A tax benefit in the form of a VAT deduction on goods sold at a loss can be justified if the entity proves that it pursued a reasonable economic goal in entering into a loss-making transaction, such as avoiding even greater losses from a complete write-off of goods. But if the goods were sold only on paper and there were no real transactions, then the tax authorities will remove such deductions.

So, of all the fears considered, the most real is the removal of expenses and deductions. To prevent this from happening, prepare a cost justification in advance. And if you, God forbid, are a participant in the tax scheme, then only fake documents without real operations are unlikely to help you.

Currently, many organizations are forced to sell goods at a price below the purchase price. Some accountants doubt the legitimacy of such actions. Read about the tax consequences of such transactions in the material prepared by the specialists of the 1C: Consulting.Standard project.

The basis for writing the material was the question received on the consultation line of the project "1C: Consulting. Standard":

Russian legislation does not contain a ban on the sale of goods at a price lower than the purchase price. Therefore, of course, you can sell this product for 600,000 rubles.

But in this case, one should keep in mind the possibility of adverse tax consequences.

An accusation of lack of a reasonable business purpose.

Referring to the unprofitability of the transaction, the inspectors declare about the absence in the actions of the taxpayer reasonable business purpose and about getting them unjustified tax benefit in the form of illegal VAT refund from the budget. At the same time, they try challenge the right to deduct "input" tax on this product. And in this case, the judges support controllers quite often.

So, for example, the Federal Antimonopoly Service of the East Siberian District, in its decision No. A33-5877 / 05-F02-7258 / 06-C1 dated January 17, 2007 in case No. A33-5877 / 05, supported the tax authorities, indicating that the operations performed by the taxpayer were not economically viable, because the purchase price of the goods was higher than the selling price for export.

In the resolution of the Federal Antimonopoly Service of the Volga District dated March 29, 2006 in case No. A12-27621 / 05-C21, the judges concluded that there was no reasonable business purpose, since transactions were obviously unprofitable for the taxpayer.

And the Federal Antimonopoly Service of the West Siberian District refused to deduct VAT from the taxpayer, since the purchase price of the goods was overstated seven times, and the subsequent the selling price did not cover all the costs of the taxpayer. The court also noted that such business transactions are not carried out, unless otherwise covered by them(Decree dated August 10, 2005 in case No. F04-5166/2005(13823-A46-18)).

Fortunately, there are also enough examples of court decisions in favor of taxpayers in arbitration practice. For example, in the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of June 20, 2006 No. 3946/06 in case No. A40-19572 / 04-14-138, the arbitrators concluded that the fact of selling goods for export at a price lower than the purchase price goods from a Russian supplier, by itself, regardless of other circumstances of a particular case, cannot testify to the bad faith of the company and be considered as an objective sign of bad faith.

Similar conclusions can be found in the decisions of the Federal Antimonopoly Service of the Moscow District dated March 11, 2008 No. KA-A40 / 1209-08 in case No. A40-35330 / 07-99-146, the Federal Antimonopoly Service of the Volga District dated January 15, 2008 in case No. A65-1289 / 07- SA3-48, Federal Antimonopoly Service of the Urals District dated 06/13/2007 No. Ф09-4305/07-С2 in case No. А07-28178/06, Federal Antimonopoly Service of the Central District dated 02.19.2008 in case No. А35-1831/07-С18.

In the Resolutions of the Presidium of the Supreme Arbitration Court of the Russian Federation of February 28, 2006 No. 13234/05 in case No. A40-245 / 05-117-4 and of February 28, 2006 No. 12669/05 in case No. A40-3898 / 05-118-48, it is indicated that the fact Selling a product at a price below the purchase price is not evidence that there is no reasonable business purpose.

And the Federal Antimonopoly Service of the Urals District, in its decision of February 11, 2008 No. F09-208 / 08-C2 in case No. A71-4398 / 07, stated that by itself the fact of lack of profit does not indicate bad faith of the taxpayer, as well as the absence of a real economic effect from relationships with these suppliers.

The judges also point out that the right to apply tax deductions is not made dependent on profit received by the taxpayer. In accordance with Art. 2 of the Civil Code of the Russian Federation, entrepreneurial activity is independent and is carried out at its own risk, that is, as a result, the organization’s activities may turn out to be both profitable and unprofitable (Decree of the Federal Antimonopoly Service of the Moscow District dated January 21, 2008 No. KA-A40 / 12666-07 in case No. A40-67664 /06-75-390).

Similar conclusions are contained in the resolution of the Federal Antimonopoly Service of the Moscow District dated August 14, 2008 No. KA-A40 / 6296-08 in case No. A40-59005 / 07-129-351. The court rejected the inspectorate's argument about the unprofitability of the taxpayer's activities, indicating that this fact is not a basis for refusing to refund VAT, since current legislation does not link the right to apply the deduction to the existence of profit or loss, that is, with the profitability of transactions.

Another example from arbitration practice. In our opinion, it can be useful in the situation under consideration. This is the decision of the FAS of the Central District of 06/04/2008 in case No. A54-2364 / 2007C21. In making its decision, the court rejected the tax authority's argument that the transaction was unprofitable and indicated that the taxpayer sold the goods at a price lower than the acquisition due to a decrease in its quality. Of course, when using this argument, the taxpayer must be prepared to confirm the fact of a decrease in the quality of the goods.
Control by tax authorities of prices for their compliance with market prices.

According to paragraph 1 of Article 40 of the Tax Code of the Russian Federation, for the purposes of taxation, the price of goods, works or services specified by the parties to the transaction is accepted. Until proven otherwise, this price is assumed to be corresponds to the level of market prices.

The tax authorities have the right to check the correctness of the application of transaction prices only in the following cases (clause 2, article 40 of the Tax Code of the Russian Federation):
1. between related parties;
2. on commodity exchange (barter) operations;
3. when making foreign trade transactions;
4. with a deviation of more than 20% upwards or downwards from the level of prices applied by the taxpayer for identical (homogeneous) goods (works, services) within a short period of time.
If the price of the goods differs from the market price by more than 20%, the tax authorities have the right to check the correctness of the application of prices and make a reasoned decision on additional tax and penalty charges, calculated in such a way as if the results of this transaction were assessed based on the application of market prices for the relevant goods (clauses 2 and 3 of article 40 of the Tax Code of the Russian Federation).

At the same time, Art. 40 of the Tax Code of the Russian Federation contains the principles for determining market prices. Note that, according to paragraph 3 of Article 40 of the Tax Code of the Russian Federation, when determining the market price discounts may apply caused by:
- seasonal and other fluctuations in consumer demand for goods (works, services);
- loss of goods quality or other consumer properties;
- expiration (approaching the expiration date) of the expiration date or sale of goods;
- marketing policy, including when promoting new products that have no analogues to the markets, as well as when promoting goods (works, services) to new markets;
- implementation of prototypes and samples of goods in order to familiarize consumers with them.
In this case, if, taking into account the provisions of Article 40 of the Tax Code of the Russian Federation, the tax authorities come to a reasonable conclusion that the price of goods applied by the taxpayer deviates from the market price by more than 20%, they have the right to charge additional taxes based on market prices. At the same time, both VAT and income tax, as well as the corresponding penalties for these taxes, will be charged additionally.

Note! When applying Article 40 of the Tax Code of the Russian Federation, the disputed price must be compared precisely with market prices for identical (homogeneous) goods. Comparison with the purchase price of the goods (with the cost of products, works, services) is not allowed. The Supreme Arbitration Court of the Russian Federation drew attention to this more than once. Thus, in the Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 17, 2003 No. 71 (paragraph 4), the judges pointed out the invalidity of the decision of the tax authority on additional tax assessment under Article 40 of the Tax Code of the Russian Federation for the reason that the tax authority during the audit did not investigate the issue of the level of deviation transaction prices from market prices. Wherein market prices were not set at all, and in order to recalculate income tax used the indicator of the cost of services(services were sold at prices below cost).

Not so long ago, the highest judicial body confirmed its point of view on this issue (see Ruling of the Supreme Arbitration Court of the Russian Federation dated 06.05.2008 No. 5849/08). In deciding to charge additional value added tax, penalties and fines to the company, the inspectorate proceeded from the fact that, by selling goods below the purchase price, society works at a loss. The judge did not take into account the argument of the tax authority about understating prices below the cost price, since the issue of establishing the market price of the goods was not investigated by the inspection.

Concern 1. Selling below cost is prohibited by law

In the general case, the contracting parties determine the price of the goods themselves. The exception is prices that are regulated by the state, for example, in the field of electricity, gas supply, communications<1>. So for a regular contract, there is no lower price limit on the part of the Civil Code. The main thing is that this price suits both parties.

The Federal Antimonopoly Service also monitors prices in order to prevent the "big players" from abusing prices. However, companies that are not able to influence the price situation on the market by their actions alone or with a group of other companies have nothing to fear.<2>.

Note. In 2013, the FAS prepared amendments to the Law on Trading Activities, advocating a ban on sales at a price below cost, but the project did not find support in the government, was sent for revision, and has not even reached the State Duma yet.

Output

If your company does not have a decisive influence on the pricing in the market and does not sell goods, the prices of which are regulated by the state, then the price floor is not limited.

Concern 2. Loss from selling at a price below cost is not taken into account for tax purposes

Let's just say that this is not the case. The income tax base is calculated cumulatively for all transactions<3>. And only if a special procedure for calculating the tax base is established, income and expenses from these operations are considered separately. For example, a special procedure is provided for transactions with securities<4>. In addition, there is a direct prohibition on recognizing in expenses the price difference between the market price and the sale price of the goods to the employee. If you sold a product to an employee at a non-market price, which is even lower than the purchase price, then it is obvious that such a price difference is formed and, in fact, it represents a loss when selling below cost<5>.

But with regard to other transactions of sale and purchase at a loss, there are no special rules. Therefore, schematically, it looks like this: income from all transactions is summed up and all expenses from sales recognized in the reporting period are deducted from the amount received<6>. It is obvious that the loss-making transaction revenue will be recognized in income from sales along with the revenue from other sales, and the expenses on it will be recognized together with the expenses on other transactions. If you are not systematically working in the red, then it is generally unrealistic to detect losing trades. They will simply drown in the total mass, and they will not be visible in the income tax return.<7>.

With a "profitable" simplification, a sale at a loss does not affect the amount of tax in any way: how much money was received for the goods - from that amount the tax was calculated<8>. If the simplification is "income-expenditure", then in this case it is not so easy to track a losing transaction, income and expenses on it can generally fall into different reporting and even tax periods. After all, expenses are recognized as payment for the goods to the supplier and its sale, and income - upon receipt of money from the buyer<9>. When selling goods to employees, the price difference between the retail price and the sale price is also not taken into account in expenses.

Output

Concern 3. If the sale price is lower than the purchase price, the tax authorities charge additional taxes based on the market price

There is some truth in this judgment. It all depends on whether such a transaction is controlled. Let's say you sold apples at a price lower than the purchasing third-party Russian company. Then you can safely look into the eyes of the inspector, since the price of the transaction between parties that are not dependent on each other is initially considered to be the market price<10>. That is, the tax authorities will not check your prices for compliance with their market prices. Simply because this type of verification is provided only for controlled transactions, and transactions between non-interdependent Russian organizations are not classified as controlled<11>.

Note. "But what about Article 40 of the Tax Code?" - you ask. Despite the fact that the notorious Art. 40 of the Tax Code on market prices has not yet been canceled, its effect has been significantly narrowed: it applies only to those transactions for which income and expenses are recognized before 01/01/2012. That is, at the moment, the tax authorities can only try to recalculate taxes based on market prices if the "sale" took place in 2011, since 2010 and earlier periods can no longer be covered by the on-site audit scheduled in 2014.<12>

<или>voluntarily calculate income tax and VAT based on the market price (immediately or at the end of the tax period)<15>;
<или>at the "price" check to prove to the tax authorities that the apples were impossible sour and the transaction price is well within the range of prices at which such goods are sold by independent persons<16>. If the tax authorities nevertheless consider that the prices were incomparable with the market prices, then after the "price" check they will go to court to recover the arrears and penalties on income tax and VAT<17>. And if the income from the transaction relates to 2014, then the tax authorities can also impose a fine in the amount of 20% of the amount of unpaid taxes<18>.

TELLING THE MANAGER

If the seller independently calculates and pays taxes at the market price on the income from a controlled transaction, the buyer will not be able to recalculate the tax base downwards. After all, he will have such a right only if, after checking prices and paying the arrears by the seller, the buyer receives a notification from the tax authority to make symmetrical adjustments<20>.

But sellers' transactions on the simplified taxation system do not fall under price control, since such organizations do not pay either income tax or VAT, for which additional charges are possible during "price" checks<19>.

Output

Concern 4. The cost of purchasing goods sold at a loss is not economically justified, and therefore they cannot be taken into account when calculating income tax

Every business organization, by definition, seeks to make a profit.<21>. However, one-time losing trades also fit into this concept, because the desire to systematically make a profit is fraught with risk and does not exclude a loss. In addition, by selling today at a low price, the company insures itself against increasing losses in the future, therefore, the management assesses the profitability of the transaction precisely at the current moment.

Note. In which cases transactions between related parties are not considered controlled, you can read in the article "On interdependence and controllability frankly": GK, 2013, N 21, p. 66

The Tax Code does not give tax authorities the right to assess how effectively a taxpayer manages capital, and therefore the concept of "economic feasibility of expenses" must be considered through the focus of expenses on generating income<22>. And in the example with apples, the expenses for the purchase of goods were economically justified, because, firstly, they were not purchased for a charity event, but were going to be successfully sold at a profit. Another thing is that the circumstances have changed somewhat and now it is much more important to release the working capital frozen in an unsuccessful batch of apples. And secondly, they still received income, because there is some kind of revenue<23>. And no one is immune from losses.<24>.

You can do the following to confirm that your expenses are reasonable. First, the manager must issue an order to mark down the goods. Secondly, the markdown must be justified. For example, you can attach to the order the conclusion of a merchandiser or sales manager, that de apples of last year's harvest, it is impossible to store them for more than 1 month in the conditions of your warehouse, and in case of loss of the presentation, the write-off losses will be much higher, etc. In any case, the justification should indicate for what purpose and why you decided on a losing trade. All this will help you strengthen your position in the event of a dispute with the tax authorities.

Output

Expenses will be economically justified if they were aimed at making a profit. The end result is not decisive.

Concern 5. If the goods are sold at a loss, then VAT cannot be deducted on them

The tax authorities are inclined to see in a loss-making transaction an unreasonable tax benefit, because the deduction on acquisition was greater than the sale of goods. And all because a reasonable economic goal of concluding a reduction in the amount of tax accrued in a racket transaction is not at all obvious to the tax authority. And as we remember, its absence is one of the signs of receiving unreasonable tax benefits.<25>.

In litigation, the case is resolved in favor of the taxpayer if he provides the court with evidence of a reasonable economic goal that was pursued when concluding a loss-making transaction<26>. But if there was no such goal, and by all indications, the organization is a participant in the tax scheme, then do not expect mercy from the tax authorities. In addition to the non-obvious economic goal, controllers will also identify other signs of obtaining an unjustified tax benefit, for example, the inability to fulfill the contract. For example, an organization purchased a batch of goods, and it is not clear where it was stored for a whole month, since the organization does not own or lease storage facilities, and although the contract for safekeeping was concluded, it was not executed<27>.

Output

paragraph 1 of Art. 424 of the Civil Code of the Russian Federation; paragraph 1 of Art. 4, Art. 6 of the Law of 17.08.95 N 147-FZ; sub. 4 p. 2, p. 4 art. 8 of the Law of December 28, 2009 N 381-FZ
Part 1 Art. 5, part 1, art. 7, paragraph 1, part 1, art. 10 of the Law of July 26, 2006 N 135-FZ
paragraph 1 of Art. 274 Tax Code of the Russian Federation
paragraph 2 of Art. 274, Art. 280 Tax Code of the Russian Federation
paragraph 27 of Art. 270 Tax Code of the Russian Federation
paragraph 1 of Art. 247, sub. 3 p. 1, p. 3 Art. 268 Tax Code of the Russian Federation
paragraph 2 of Art. 268 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of September 18, 2009 N 03-03-06 / 1/590
paragraph 1 of Art. 346.15, paragraph 1 of Art. 346.17, paragraph 1 of Art. 346.18 of the Tax Code of the Russian Federation
paragraph 1 of Art. 346.15, sub. 23 paragraph 1 of Art. 346.16, para. 1, sub. 2 p. 2 art. 346.17 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of October 29, 2010 N 03-11-09 / 95
paragraph 1 of Art. 105.3 of the Tax Code of the Russian Federation
paragraph 1 of Art. 105.17, paragraph 1 of Art. 105.14 of the Tax Code of the Russian Federation
paragraph 4 of Art. 89 Tax Code of the Russian Federation
sub. 1 p. 2 art. 105.14 of the Tax Code of the Russian Federation
paragraph 4 of Art. 105.3 of the Tax Code of the Russian Federation
pp. 3, 6 art. 105.3 of the Tax Code of the Russian Federation
sub. 1 p. 1, p. 3 Art. 105.7, paragraphs. 1, 7 art. 105.9 of the Tax Code of the Russian Federation
paragraph 5 of Art. 105.3, sub. 4 p. 2 art. 45 Tax Code of the Russian Federation
paragraph 1 of Art. 129.3 of the Tax Code of the Russian Federation; paragraph 9 of Art. 4 Law of July 18, 2011 N 227-FZ
sub. 1, 4 p. 4 art. 105.3, paragraph 2 of Art. 346.11 of the Tax Code of the Russian Federation
paragraph 1 of Art. 105.3, para. 1, 2 art. 105.18 of the Tax Code of the Russian Federation
paragraph 1 of Art. 50 of the Civil Code of the Russian Federation
Art. 252 of the Tax Code of the Russian Federation; Definitions of the COP dated 12/16/2008 N 1072-O-O (clause 2 of the motivational part), dated 06/04/2007 N 366-O-P (clause 3 of the motivational part), dated 06/04/2007 N 320-O-P (p .3 motivational part)
Letter of the Federal Tax Service for Moscow dated 02.08.2012 N 16-15 / [email protected]
Decrees of the FAS MO dated July 18, 2013 N A40-86022 / 12-20-468; FAS SZO dated 06/16/2011 N A56-60826 / 2010
pp. 1, 3, 9 of the Resolution of the Plenum of the Supreme Arbitration Court dated 12.10.2006 N 53
Decrees of the FAS MO dated May 30, 2013 N A40-40420 / 12-91-224, dated May 5, 2012 N A40-43413 / 11-90-184; 15 ААС of 04/02/2013 N 15AP-2735/2013
Decree of the FAS SKO dated January 24, 2013 N A32-3122 / 2012

Below cost and market price(English name - lower of cost or market, abbreviated - LCM) - one of the asset valuation methods, in which the value of the object of assessment is taken equal to the market price or the price of its manufacture (purchase). The selection process takes into account the one of the prices, which is lower. In this case, the smallest indicator is taken into account. The Companies Act (1985) requires that one unit of current assets be valued at net realizable value or purchase value.

Below cost and market price: the role of the method in classification

Over the past decades, in international and Russian practice, three main methods (approaches) have been used for asset valuation:

- income approach- one of the main evaluation methods that allows you to accurately determine the relevance of future investments. Its application involves the study of profitability and future prospects for the growth (development) of the asset. In the income approach, as a rule, two main methods are used - the income method and the discount method. These calculation methods allow you to estimate the amount of cash flows (if possible during a crisis);

- comparative approach- the ability to evaluate the company's assets by comparing their value with other similar products on the market. The peculiarity of this method is the high calculation speed. The disadvantage is low accuracy, because the comparative approach does not take into account the individual characteristics of the instrument, its personal characteristics. You can use this method only if the transactions are taken from reliable sources;

- cost approach- another valuation option, which assumes the calculation of the price of assets as incurred to purchase or create costs. At the same time, the repayment of all current debts (liabilities) is taken into account. Thanks to this method, it is possible to carry out an assessment of assets during the liquidation period. This is possible due to the capabilities of the method, namely the availability of calculating the price that remains after liquidation and deducting current expenses.

The LCM method, namely “below cost and market price”, directly depends on the comparison of wholesale and retail prices for a product. In fact, lower of cost or market is one of the costly ways to get similar results. But there are differences here. Retail prices can sometimes decline and fall below cost levels. In such a situation, the only way out is to reduce the cost of their own products (goods). This is necessary to reflect the net realizable value of assets used to cover costs, less other expenses. For example, in the US, the adjusted value should be no more than NRV and no less than NRV minus gross margin in calculations.

The method described above allows you to provide the tax service with accurate information regarding the inventory value of assets. The uniqueness of the cost method is that it does not take into account retail prices. As a consequence, it is possible to take into account the entire volume of direct and indirect costs of assets. Purchases of goods at a wholesale price are taken into account, taking into account discounts, transport costs, additional purchase costs, and so on.

Below cost and market price: essence, accounting features

LCM technique- one of the approaches to assessing assets and reporting to the tax office, which is based on the main principles of conservatism. The main emphasis is on the current agreement on a ban on optimistic (overestimated) asset valuation. The main goal is to prevent any embellishment of the real picture of the company's financial and property potential, as well as deception of potential reporting users (for example, regulatory authorities). This rule is of key importance in relation to the most volatile assets (usually securities).

In order to correctly evaluate and present financial injections in financial statements, it is important to correctly separate investments in. It is on them that the current market price will be determined. Financial injections can be taken into account in the total amount of the real costs of the investor. In the case of debt booms, "" between the volume of actual purchase costs and the nominal price can be attributed to financial results once a month, that is, evenly (the entire period of circulation of assets in correspondence).

Securities received by a company free of charge can be accounted for:

- for market assets- at the current price of the security in the market. Here the price is fixed, which took place on the day of acceptance for accounting, and was calculated in the prescribed manner;

- for non-marketable assets. In such a situation, settlement is made at a non-market price.

Financial investments, for which a market price can be determined, should be reflected in the financial statements at the end of the year. The current market price is taken into account, taking into account the adjustment of the asset valuation as of the previous reporting date. In this case, the adjustment itself can be made once a quarter or once a month.

The difference between the estimate of financial injections on a specific date and the previous estimate of investments must be attributed to financial results. Such adjustments should be displayed on the relevant accounts - "financial investments" and "other income (expenses)".

There is another interpretation. According to it, investments in securities that are traded on the stock exchange (auctions), and whose quotes are constantly published, must be displayed in the annual balance sheet according to the minimum of two estimates. This is where the lower of cost or market method works, when the smallest parameter is selected from the two results (historical cost and current price). In such a situation, the valuation of the object on a specific date may be less than it. At the same time, it cannot be higher than this parameter.

The difference between the two approaches described above lies in the peculiarities of Russian legislation. In the Russian Federation, the possibility of reflecting financial investments at a price that exceeds their purchase is allowed. There is no such provision in IFRS. This is how other principles work, aimed at a more cautious attitude to evaluation.

In the process of applying the lower of cost or market method, it is worth considering several important points:

If the current market price is less than the value of the valuation indicated in the previous financial statements, then the lower valuation should be chosen. This is important so as not to act as an optimist and not to deceive potential users;

- if the value of an asset in the market increases, then its reporting valuation can be increased to the level of recovery of the historical price (but not more than it).

An increase in the market valuation of an asset and the excess of this parameter over the cost price is in no way recognized in reporting and accounting. In this case, the standard logic works. An increase in the price of a traded asset indicates a probable profit in the future. At the same time, you can count on income only if the asset is sold. If the object is not realized, then there is no profit either. In addition, the current rise in the price of an asset at any time may end in its decline. Therefore, there is no need to reflect an artificial loss (profit).

It turns out that if, in comparison with the initial costs, there is a real loss from a price change, then it must be shown. If there is a potential income, then it should not be reflected in the report and taken into account in principle. It should be noted that in the tax legislation of the Russian Federation there is an adjustment of taxable income, therefore, in most cases it is recommended to follow the principles of IFRS.

In Russian practice, it has become customary that the historical valuation of investments until the moment of their sale does not change. As soon as the fact of the implementation of the object occurs, then the recalculation is carried out. There is also experience in conducting operational accounting, that is, without the use of double-entry bookkeeping. In this case, the head or owner of the company transmits information about the current market price and cost of financial assets.

Under the LCM method, each of the types of securities purchased by the company, for which a market price has not been determined, must be tested for depreciation. If there are such signs (for example, with a regular decrease in the price of an asset), an allowance for depreciation is formed. The amount of the reserve, which is calculated for each purchased security, refers to the financial result of the company. In this case, the operation to create such a reserve is reflected in a special entry.

If the rule described above applies to raw materials and materials, then the scheme will be similar. For example, in practice, the cost of raw materials and materials is reduced. At the same time, it falls below the cost at which the goods were bought in the reporting period. In this case, inventory is produced. In this case, the output stock is valued at the current market price. Then, using the balance method, we find the volume of inventory allocated to work in progress and cost. At the last stage, one of the methods (peer review, plan, standards) calculates the size of work in progress. In this case, the balance should be written off to cost.

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BELOW COST AND MARKET PRICE

(lower cost or market, LCM) A method of valuing a unit of an organization's current assets, according to which its value is either the price of its purchase (or production), or the cost of its replacement (by purchase or production), depending on which indicator is lower. The Companies Act 1985 requires that a unit of current assets be valued at either the purchase (or production) price or the net realizable value, whichever is lower.

Finance. Dictionary. 2nd ed. - M.: "INFRA-M", Publishing house "Ves Mir". Brian Butler, Brian Johnson, Graham Sidwell et al. Osadchaya I.M.. 2000 .

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