Loss in the income tax return

 According to the results of the tax or reporting period, the company, to put it mildly, can receive not only profit but also a loss. Indeed, it is not always the case that an organization's revenues exceed its expenses. At first glance, the situation is ordinary. But as in the declaration, you show the loss, the tax authorities will require an explanation for the declaration.

Attach an explanatory letter to the loss-making declaration outright, without waiting for a request. It should be emphasized that after all, a negative tax base can, in the end, undermine the reliability of the company in the eyes of controllers. Indeed, permanent losses may well bring, as everyone knows, an on-site inspection (clause 2 of the Public Criteria, approved by order of the Federal Tax Service of the Russian Federation of May 30, 2007, No. MM-3-06 / 333 @). Everyone has long known that a letter explaining the circumstances of the loss may look like this:

In response to the Communication (with the requirement to provide explanations) No. 11-03 / 2204 dated 03/11/2016 Vega LLC in connection with the acquired loss at the end of 2015 reports the following.

The loss we acquired in the amount of RUB 100,000. was formed in connection with a decrease in revenue by 25 percent, as well as in connection with an increase in selling costs associated with the role of Vega LLC in the international exhibition Gold of the World (organized by ZAO Expo-M).

The purpose of this event was to expand the client base and research market needs. Costs associated with a role in the exhibition amounted to RUB 500,000, including:

labor costs (bonuses) in the amount of RUB 100,000;
the cost of services for the exhibition in the amount of 400,000 rubles.
As a result of the exhibition, Vega LLC entered into several supply agreements, in connection with which it plans to significantly increase the volume of sales.

In addition, measures are being taken to optimize costs:

• termination of marketing campaigns in the media;
• measures to reduce accounts receivable. 

In the explanations, correctly name the prerequisites why it is so noticeable, in general, that the revenue has decreased or the amount of expenses has increased. Let's say your company is expanding its product range, and this asks for the purchase of the latest equipment and investments in marketing campaigns. It is also possible that either you have a seasonal nature of work at your enterprise. Imagine one fact that in any case, carefully and truthfully describe all the incidents.

It is more important to highlight in the letter that your company's losses are temporary. Undoubtedly, it is worth mentioning that and employees do everything possible to make a profit in the future. Please note that copies of supporting documents will completely dispel the inspector's doubts.

Characteristics in the income tax return creep with accounting.
Often, controllers compare the amounts of income and expenses according to accounting data with similar indicators of the income tax return for the year. And if they do not coincide, then they require an explanation of the income tax declaration

You will almost always be able, in the end, to respond confidently that such discrepancies are justified. After all, the rules by which, in the end, income and expenses are recognized when calculating income tax, often differ from those that work in accounting. This is the main reason you will give in the letter.

Let's take income first. Let's say your company finally received a fixed asset free of charge. Everyone has known for a long time that in tax accounting, the market value of such property for you will also have to be immediately reflected in income. As strange as it may seem, but in accounting, you will begin to demonstrate income in moderation, as depreciation is charged on this property.

Example

LLC "Raduga" in December 2015 received a fixed asset free of charge. The accountant put it on record at a market value of 50,000 rubles. This was reflected in the entries:

DEBIT 08 subaccount "Purchase of fixed assets" CREDIT 98 subaccount "Gratuitous receipts"
- 50,000 rubles. - reflects the market value of the fixed asset acquired free of charge, as we put it;

DEBIT 01 CREDIT 08 subaccount "Purchase of fixed assets"
- 50,000 rubles. - the object of fixed assets is taken into account.

As depreciation is calculated (useful life is 36 months), the accountant makes the following entries:

DEBIT 20 CREDIT 02
- 1388.89 rubles. - depreciation is charged on the fixed asset;

DEBIT 98 sub-account "Gratuitous receipts" CREDIT 91 sub
-accounts "Other income" - 1388.89 rubles. - a part of the cost of the fixed asset is included in other income.

And in tax accounting, the cost of a fixed asset acquired free of charge is non-operating income in accordance with Clause 8 of Article 250 of the Tax Code of the Russian Federation. I must say that because the accountant of LLC "Raduga" reflected income in the amount of 50,000 rubles. at a time. It was also reflected in the income tax return for 2014. Inspector, not as if counting the amount of 50,000 rubles. in the financial statements, may request an explanatory letter.

In response to the Message (with the requirement to provide explanations) No. 12-04 / 2305 dated 04/12/2016 LLC "Raduga" reports the following.

There were no errors in these reports. Everyone has long known that the discrepancies between the indicators in the income tax return and financial statements for 2015 are explained by the different procedures for recognizing income for the purposes of calculating income tax and accounting.

Namely, in December 2015, our organization received a fixed asset free of charge. On the basis of Clause 8 of Article 250 of the Tax Code of the Russian Federation, the market value of the property acquired free of charge is included in full in the composition of non-operating income.

While for accounting purposes, income from such a transaction is recognized as the depreciation of the item of fixed assets based on Clause 29 of the Methodological Guidelines approved by order of the Ministry of Finance of the Russian Federation dated October 13, 2003, No. 91n. Everyone has known for a long time that we began to depreciate this object from January 1, 2016.

In connection with this, the income tax declaration for 2015 on line 100 of Appendix No. 1 to sheet 02 reflects non-operating income in the amount of 50,000 rubles. Everyone has known for a long time that in the statement of monetary results for 2015 on line 2340, income from the same operation is not indicated.

Applications:

1. Of course, we all know very well that a copy of the consignment note dated 12/11/2015 No. 1122;

2. Of course, we all know very well that a copy of the invoice dated 11.12.2015 No. 1130;

3. And indeed, a copy of the OS commissioning act dated 11.12.2015 No. 15.

General Director
K.N. Komova
(signature)
(initials, surname)

Now about the costs. It should be emphasized that some of them in tax accounting, in contrast to accounting, you will not be able to recognize at all - the full list of such is named in article 270 of the code. Plus, you can take into account a whole range of expenses when calculating the tax only within the established standards. These are marketing, travel, and representation, and interest on loans. In accounting, there are no such restrictions. Everyone has known for a long time that you will remind the inspector of all these annoying differences in accounting in your own letter.

Are there special forms for explanatory notes to the tax office?
No, you can make up any explanations for the income tax return. It goes without saying, but do not forget to indicate the details of your company and seal the signature of the manager.

What will also happen if we submit an update, having found errors in the declaration submitted not so long ago?
Having received a clarification, the tax authorities will stop revising your primary declaration (if they have already started it). And they will conduct the latest cameral inspection.

What will the inspector do if we do not provide explanations for the declaration at the appropriate time?
Without waiting for explanations, the inspector, so to speak, can regard inconsistencies in the declaration as a violation of the rules of tax accounting and draw up an inspection report.

Can the tax authorities, together with the explanations to the declaration, claim any documents?
In general, no. As strange as it may seem, but if you declare a benefit, the auditors will ask you to confirm your right to implement it, so to speak (clause 6 of article 88 of the Tax Code of the Russian Federation).