In practice, there are situations when citizens borrow money from organizations through the conclusion of loan agreements. When calculating personal income tax, this entails the appearance of income from the borrower in the form of percentages of material benefits. The tax agent here is the organization that issued such a loan. In our article, we will consider what it is, the material benefit, as well as the features of the category. In addition, we will analyze the reasons for its appearance and the procedure for taxation.
Civil Law Framework for the Loan
Loan relations, as a rule, are formalized through a loan agreement, according to which the lender (first party) transfers money or other things that differ in generic characteristics to the ownership of the borrower (second party). In return, the borrower is responsible forreturn to the lender the same amount of the loan (the amount of money) or an equal amount of other things received by him, of the same quality and kind. Such rules are provided for in paragraph 1 of Art. 807 of the Civil Code of the Russian Federation. It should be added that currency values and foreign currency can also be the object of a loan agreement in the Russian Federation.
The contract is considered valid from the moment of transfer of money or other items. According to paragraph 1 of Art. 808 of the Civil Code of the Russian Federation, this agreement between citizens must be concluded in writing if its amount is not less than 10 times the minimum wage established by law. If the lender is an organization, the contract is concluded exclusively in writing, regardless of the amount.
Receipt of interest
Consider the material benefit of loans. It is important to note that the lender has the right to receive directly from the borrower interest on the amount of the loan in the manner and amount determined by the agreement, unless other rules are provided for by the loan agreement or the law in force in the country. If there is no condition in the agreement regarding the amount of interest, their amount is revealed by the existing rate at the location of the lender. When it is a legal entity, we will talk about its location, where the current certain rate of bank interest (in other words, the refinancing rate), moreover, at the time the borrower pays the amount of the debt or its specific part under paragraph 1 of Art. 809 of the Civil Code of the Russian Federation.
According to paragraph 4 of Art. 809 of the Civil Code of the Russian Federation upon returnthe amount of the loan, which is provided at interest under paragraph 2 of Art. 810 of the Civil Code of the Russian Federation, the lender has the right to receive from the borrower ahead of schedule interest under the loan agreement, accrued inclusively until the day the amount of money is returned in full or in part.
By virtue of Art. 210 of the Tax Code in force on the territory of the Russian Federation, when identifying the tax base for personal income tax, income in the form of material benefits from personal income tax is also taken into account. It is worth noting that a citizen may receive material benefits in three cases. Among them:
- Material benefit from interest savings. It arises in the case of using credit borrowed money received from individual entrepreneurs or organizations. The exception in this case is transactions with credit cards during the interest-free period, which is established in the agreement regarding the provision of credit cards.
- Material benefit from savings on the purchase of commercial products (services, services) from citizens, individual entrepreneurs or organizations under a civil law agreement. A prerequisite here is their mutual dependence on an individual.
- Income in the form of material benefits from the acquisition of securities.
Benefit due to interest savings
Consider the material benefit of an interest-free loan. So, if the money was received in accordance with the agreement of such a loan, the borrower has the opportunity to save on interest payments. This means that he receives profit, from which, according to the rules provided for by tax legislation, personal income tax is withheld. It is worth noting that the material benefit from an interest-free loan also appears when the terms of the agreement or the loan agreement require the payment of interest, but their value is less than 9% (according to the foreign currency loan). This amount may also be 3/4 of the refinancing rate. Bank of Russia, which is set on the date of receipt of borrowed money (according to the ruble loan).
There are exceptions everywhere
An exception to this rule is the material benefit received from savings on interest directly for the use of borrowed money that the taxpayer actually spent on the acquisition or construction of a residential apartment, house, room or parts of them in the territory of the Russian Federation. From Art. 224 of the Tax Code of the Russian Federation follows: if the taxpayer has documented the use of borrowed funds for the purchase of housing, the tax on personal income. persons benefiting from interest savings are withheld at a rate of 13%. In other situations, in other words, if documents are missing, the rate will be 35%.
This procedure applies primarily to those incomes in the form of a material benefit that were received after 2005-01-01 (letter of the Ministry of Finance of the Russian Federation dated 2006-16-06). What kind of documentation the taxpayer undertakes to confirm the intended purpose of the borrowed money is not indicated in the Tax Code in force on the territory of the Russian Federation. In accordance with the opinion of specialists of the Ministry of Finance, the type of papers confirming the purpose of the loan for the acquisition of residential areas depends on the method and form of payment for the real estate objects that are acquired (letter from2007-02-04).
Taxation procedure
In accordance with the provisions of paragraph 1 of Art. 226 of the Tax Code of the Russian Federation, if a Russian company provided a loan to its own employee and at the same time he received a material benefit at the rate of interest, then the lending structure undertakes to calculate the amount of personal income tax, and then withhold it from the employee’s income and transfer it to the state budget. It should be noted that it is necessary to withhold the tax at the expense of any money that the company accrues to its employee. As a rule, this is done when they are paid after the fact. The tax may also be withheld from the taxpayer's money, which is paid according to his instructions to third parties. It must be remembered that the tax amount that the company can withhold, under no circumstances should be more than 50 percent of the amount of the payment. Employees of the financial department notice that the tax agent does not need a special power of attorney from the employee to perform his functions.
Sometimes it happens that the tax agent is unable to withhold the tax on personal income. persons from the borrower for one extremely simple reason: the employee does not receive income from the agent for taxes and fees at all. In this case, the latter undertakes to report in writing to the tax authority at the place of its own registration information regarding the inability to withhold the tax payment and transfer data on the amount of debt relevant to the taxpayer (according to paragraph 5 of article 226 of the Tax Code of the Russian Federation).
Emerging Benefits
The date of occurrence of material benefits is the date of payment of interest according to the loan agreement or loan agreement. For example, in accordance with the rules of the contract, the employee undertakes to pay interest every month no later than the fifteenth day. So, the material benefit on an interest-free loan will appear on the same dates every month. The agreement may provide for the payment of interest simultaneously with the return of the loan amount. In this case, the amount of benefit under the loan agreement is revealed only once, as a rule, at the end of the agreement period. If the loan is not returned in the current year, and the corresponding interest is not paid, then the calculation of the benefit of the material plan is carried out at the end of the year, in other words, on December 31. If the company has issued an interest-free loan, then the date the borrower receives income in the form of material benefit is the date the borrowed money is returned (according to the letter of the Ministry of Finance of Russia dated 2007-02-04.
Determining the tax base
It is worth noting that personal income tax on the material benefit from a loan can be defined as the excess of the percentage amount for the use of funds taken on credit, calculated as 3/4 of the current refinancing rate, over the percentage amount, which is calculated based on the terms of the agreement. The calculation uses the refinancing rate determined by the Bank of Russia immediately on the date of receipt of the borrowed money. At the same time, it does not matter at all whether it changed during the period of using this money or not.
Calculation based oncurrent refinancing rate
Next, it is advisable to calculate the amount of interest for the use of borrowed money, based on the current refinancing rate, and then - from the interest rate established by the loan agreement. The calculation is made in accordance with the formula: SUM=SUM x 3/4 of the refinancing rate. x K: 365 (366) days, % of days, where SUM is the loan amount; K - the number of days of using the loan.
It is worth noting that in the second situation, instead of the refinancing rate, nothing more than the amount of interest is taken in accordance with the contract. To get the final result, subtract the second amount from the first amount and multiply by 35%.
The tax base in terms of material benefits from savings on interest on credits (loans) in the currency of a foreign state should be determined as the excess of the interest amount for the use of borrowed money, calculated on the basis of a rate of 9 percent per annum, over the percentage amount, which is calculated on the basis of from the terms of the agreement. The calculation algorithm is the same as in the case of ruble loans.
In order to calculate the material benefit, you should determine the number of days the loan is used. The start date is the day the loan is issued, and the end date is the day that precedes the day the loan is repaid. If the funds are not returned in the current year, but interest is paid in accordance with the conditions, the end date is the last day of interest accrual. If the loan is issued in the current year and has already been made in the same calendar yearcalculation of the benefits of the material plan, then the starting date will be the day that follows the last day included in the previous calculation of the mat. benefits.
Let's consider an example
So, let's take an example. Suppose, on July 1, 2007, a company issued a loan to one of its employees with a repayment period of February 1, 2008. In accordance with the terms of the current contract, the borrower undertakes to pay interest in two stages: on October 1, 2007, and also on the loan repayment date. In this case, the calculation of material benefits is implemented once. The borrowed funds were in the use of the taxpayer for 122 days, that is, from the date of issue of the loan (July 1, 2007) until the day that was the last when interest was calculated (in other words, September 30, 2007).
In 2008, the benefit will also be calculated only once. The taxpayer will use the borrowed funds within 123 days: from the day following the last day included in the previous calculation of benefits (in other words, October 1, 2007), to the day preceding the day the loan is returned (January 31, 2008).
If an interest-free loan was issued in a given year, the beginning of its use coincides with the date of direct issuance. The end of the period in this case falls on the last day of the year in accordance with the calendar. Suppose that an interest-free loan was issued in previous years. Under such circumstances, the starting date is the same as the day following the last day included in the calculation of the benefit of the material plan in the previous time, andthe date of repayment of the loan is recognized as final.
Benefit from buying the Central Bank
Individuals (citizens) have the opportunity to obtain ownership of certain securities in various ways, however, material benefits take place only when they are received free of charge or purchased at prices that are below market prices. It is worth recalling that in accordance with the current provisions of the Federal Law, in force on April 22, 1996, en titled "On the securities market", issued securities are allowed to circulate on the organized securities market. Among them are stocks, corporate and government bonds, as well as savings and deposit certificates.
Final part
So, we have fully considered the category of material benefit, analyzed the concept, definition, causes, features and procedure for taxation. In addition, we made a calculation, showed everything on a specific example. In conclusion, it should be noted that payments in accordance with labor, copyright, and civil law agreements, the subject of which is the provision of services and the performance of work, are considered to be the object of taxation of a single tax of a social type. Material benefit does not apply to such payments, therefore, it cannot be recognized as an object that is subject to UST (according to the letter of the Ministry of Finance of Russia dated 2007-02-04).
