The problem of accounting for expenses for profit tax purposes remains one of the cornerstones in disputes between taxpayers and tax authorities. Today we will talk about the validity of material expenses, which are discussed in Art. 254 of the Tax Code of the Russian Federation. Detailed recommendations for tax accounting of material and other expenses are given in the publication “Organization of tax accounting and tax planning at an enterprise” (magazine “Economic and Legal Bulletin”, No. 11, 2009).
In tax accounting, material expenses are recognized as expenses associated with production and sales. The list of material costs is given in paragraph 1 of Art. 254 Tax Code of the Russian Federation. This type of expense includes the cost of any material assets used by the taxpayer that have a tangible form, except for fixed assets. Objects costing less than 20,000 rubles, put into operation after January 1, 2008, are not recognized as depreciable property. Material costs reflect the costs of materials used for both production and general business needs.
In subparagraph 5 of paragraph 1 of Art. 254 of the Tax Code of the Russian Federation establishes that material costs include the costs of an enterprise for the purchase of fuel, water and energy of all types spent for technological purposes, production (including by the taxpayer himself for production needs) of all types of energy, heating of buildings, as well as expenses for transformation and transfer of energy. With the adoption of Federal Law No. 158-FZ of July 22, 2008, this list was supplemented with costs for production and (or) acquisition of capacity.
The following are considered material costs:
— costs for land reclamation and other environmental measures;
Losses from shortages and (or) damage to inventories (MPI) within the limits of natural loss;
Technological losses during production and (or) transportation;
Costs of mining and preparatory work in the extraction of minerals, operational stripping work in quarries and cutting work in underground mining within the mining allotment of mining enterprises.
Conditions for recognizing material expenses
Material costs must be economically justified and also supported by documents drawn up in accordance with Russian legislation. According to the general rule set out in paragraph 2 of Art. 272 of the Tax Code of the Russian Federation, the moment of recognition in tax accounting of material expenses in relation to inventories coincides with the date of transfer of these values into production. The cost of work and services of a production nature reduces the tax base at the time the taxpayer signs the acceptance certificate. More detailed information on the date of recognition of material expenses and documents supporting them is given in table. 1.
Limit cards are used to register the release of materials systematically used for the manufacture of products (performance of work and provision of services). The primary accounting documents for the release of material into production reflect the purpose of its use: the name of the order (item, product) or type of cost.
Sometimes, when transferring valuables to individual departments, the invoice does not indicate the specific purpose of the materials. As a rule, this is how the transfer of inventories for general business and administrative needs is formalized. In such a situation, the recipient department draws up a materials consumption report for the materials actually consumed. Based on the act, the cost of used material assets is taken into account when taxing profits.
Household expenses include, in particular, the costs of purchasing household goods and household chemicals (toilet paper, disposable paper towels, napkins, cleaning products, etc.). The cost of such material assets reduces taxable profit if these costs meet the criteria of Art. 252 of the Tax Code of the Russian Federation. A similar position is set out in the letter of the Ministry of Finance of Russia dated April 11, 2007 No. 03-03-06/1/229.
Material expenses are the costs of maintaining and operating environmental facilities, receiving, storing and destroying environmentally hazardous waste, wastewater treatment and other similar costs (subclause 7, clause 1, article 254 of the Tax Code of the Russian Federation). This group of material costs includes payments for maximum permissible emissions (discharges) of pollutants into the natural environment. At the same time, when taxing profits, the amounts of payments for excess emissions of pollutants into the environment are not taken into account (clause 4 of Article 270 of the Tax Code of the Russian Federation).
Losses from shortages and damage during storage and transportation of materials are written off within the limits of natural loss norms. The standards must be established in the manner prescribed by the Government of the Russian Federation. Until they appear, taxpayers can apply the rules previously approved by the relevant federal authorities (Article 7 of Federal Law No. 58-FZ dated 06.06.2005).
Taxpayers set the norms for technological losses during the production and transportation of material assets independently.
The cost of the remaining inventories transferred to production but not yet processed (clause 5 of Article 254 of the Tax Code of the Russian Federation) is excluded from the material expenses of the current month.
If material costs incurred during the month are classified as direct expenses in tax accounting, the taxpayer distributes them between work in progress and finished products in the manner prescribed in the tax accounting policy. Data on the balances of direct expenses are recorded in a special tax register. The amount of indirect material costs in full reduces the tax base of the current reporting (tax) period (clause 2 of Article 318 of the Tax Code of the Russian Federation).
Different dates for recognizing direct and indirect expenses are established in paragraph 2 of Art. 318 Tax Code of the Russian Federation. Direct expenses reduce the tax base of the reporting (tax) period as products, works, and services are sold in the cost of which they are taken into account. Indirect expenses are reflected in the reporting (tax) period in which they arose.
Table 1
Types of material expenses and the moment of their recognition in tax accounting
|
Type of consumption |
Moment of write-off as expenses |
Norm of the Tax Code of the Russian Federation |
Confirmation document |
|
4 |
|||
|
Raw materials (materials) - the basis or component necessary for the production of goods (performance of work, provision of services) |
Date of transfer to production |
Limit card (form No. M-8)*, demand invoice (form No. M-11)*, invoice for materials release No. M-15)*, materials consumption report |
|
|
Components, semi-finished products subject to installation or additional processing |
|||
|
Materials for packaging and other preparation of goods (including pre-sale preparation) |
|||
|
Materials for other production needs (testing, control, |
|||
|
Materials for general economic and administrative needs |
Date of drawing up the materials consumption report or date of drawing up the invoice |
P. 1 |
Request-invoice, invoice for the release of materials to the third party, act of consumption of materials |
|
Tools, devices, equipment, devices, laboratory equipment |
At the time of commissioning |
Subp. 3 p. 1 art. 254 |
Requirement - invoice, invoice for the release of materials to the side |
|
Overalls and other personal protective equipment |
At the time of commissioning |
Subp. 3 p. 1 art. 254 |
Record sheet for the issuance of workwear, safety footwear and safety equipment (form No. MB-7)*, personal record card for the issuance of personal protective equipment** |
|
Fuel, water, energy of all types, spent on technological purposes, costs for heating buildings, transformation and transmission of energy |
Certificate of services rendered |
||
|
Works and services of a production nature (individual operations for the production of products, performance of work, provision of services, processing of raw materials and materials, control over compliance with established technological processes, etc.) |
Certificate of acceptance and transfer of completed work (services) |
||
|
Works and services of a production nature (services for the transportation of goods within the organization) |
Date of signing by the taxpayer of the act of completed work (rendered services) |
Waybills (form No. 1-T)***, waybills (forms No. 4-C and 4-P)***, acceptance certificate |
|
|
Expenses for the maintenance and operation of environmental property |
Date of signing by the taxpayer of the certificate of services rendered |
Certificate of acceptance and transfer of completed work (services), accounting certificate-calculation |
|
|
Expenses for land reclamation and other environmental protection measures (excluding expenses for the development of natural resources) |
|||
|
Losses from shortages or damage during storage and transportation of inventories within the limits of natural loss norms |
Date of receipt of material assets in the organization, date of the inventory report |
P. 1 |
Act on the established discrepancy in quantity and quality upon acceptance of goods and materials (form No. TORG-2)****, comparison sheet of inventory results of goods and materials (form No. INV-19)***** |
|
Technological losses during production |
Date of receipt of material assets in the organization, date of release |
P. 1 |
Act on the established discrepancy in quantity and quality when accepting goods and materials, technological maps, process estimates, industry regulations, conclusions, calculations of technological services, etc. |
|
Expenses for mining preparation work during the extraction of mineral resources, for operational stripping work in quarries and cutting work during underground mining within the mining allotment of mining enterprises |
Date of signing by the taxpayer of the certificate of work performed and services rendered |
Certificate of acceptance and transfer of completed work |
* Approved by Resolution of the State Statistics Committee of Russia dated October 30, 1997 No. 71a.
** Approved by order of the Ministry of Health and Social Development of Russia dated June 1, 2009 No. 290n (valid from October 6, 2009).
*** Approved by Resolution of the State Statistics Committee of Russia dated November 28, 1997 No. 78.
**** Approved by Resolution of the State Statistics Committee of Russia dated December 25, 1998 No. 132.
***** Approved by Resolution of the State Statistics Committee of Russia dated August 18, 1998 No. 88.
How to justify expenses
The Constitutional Court of the Russian Federation periodically reviews the legality of the presence of concepts related to expenses in the Tax Code. This topic is addressed, for example, by the Decree of the Constitutional Court of the Russian Federation dated December 16, 2008 No. 1072-О-О. The applicant considered that the evaluative concepts of “justified costs”, “economically justified costs” and “direction of activity to generate income” allow tax authorities and courts to use a subjective approach when determining the validity of certain expenses incurred by the taxpayer and taken into account when calculating income tax.
In response to this, the highest court indicated, in particular, that the provisions of paragraph 1 of Art. 252 of the Tax Code of the Russian Federation do not allow their arbitrary application, since they require the establishment of an objective connection between the expenses incurred by the taxpayer, so that his activities are aimed at making a profit. The tax authorities are required to prove the unjustifiedness of the taxpayer's expenses.
The Russian Ministry of Finance indicates that tax legislation does not use the concept of economic feasibility and does not regulate the procedure and conditions for conducting financial and economic activities. This means that the validity of expenses cannot be assessed from the point of view of their expediency, rationality, efficiency or the result obtained (letters of the Ministry of Finance of Russia dated May 22, 2009 No. 03-03-06/1/339 and dated April 14, 2009 No. 03-03-06/2/ 81). At the same time, it must be assessed taking into account the circumstances indicating the taxpayer’s intentions to obtain economic benefits from the activity. And these intentions, according to the Ministry of Finance, should be obvious to tax inspectors.
Determining the cost of inventories
In tax accounting, the value of material assets is formed at the moment they are received by the taxpayer in accordance with clauses 2-4 of Art. 254 Tax Code of the Russian Federation. It is determined based on the purchase price of goods, commissions of intermediary organizations, import customs duties and fees, transportation costs, non-returnable packaging and other costs directly related to the acquisition of valuables. The cost of raw materials and materials does not take into account the amount of value added tax presented by suppliers, except for the cases listed in clause 2 of Art. 170 Tax Code of the Russian Federation.
The amounts of customs duties and fees paid for the import of imported raw materials and supplies are included in other expenses associated with production and sales (subclause 1, clause 1, article 264 of the Tax Code of the Russian Federation). However, on the basis of paragraph 2 of Art. 254 of the Tax Code of the Russian Federation, customs payments and fees can be taken into account in the cost of acquiring material assets, if this is provided for by the accounting policy for tax purposes for the corresponding year.
All costs for the purchase of inventories must be confirmed by primary documents (invoices, commission agent reports, customs declarations, certificates of services rendered, etc.).
In order to summarize information about the movement of batches of raw materials and materials received by the enterprise, it is advisable to create a special tax register. It reflects the operations of receipt and release of inventories into production.
An important point: in tax accounting there are three types of expenses that can be directly related to the acquisition of inventories, but do not increase their cost. We are talking about interest on debt obligations raised for the purchase of material assets, as well as amount and exchange rate differences. These costs are taken into account when taxing profits as part of non-operating expenses (subclauses 2, 5 and 5.1, clause 1, article 265 of the Tax Code of the Russian Federation).
If the taxpayer independently produces inventories for his own consumption, their cost is determined similarly to the cost of finished products (clause 4 of Article 254 of the Tax Code of the Russian Federation).
Returnable waste
The amount of material costs is reduced by the cost of returnable waste (clause 6 of Article 254 of the Tax Code of the Russian Federation). These are the remains of raw materials, materials, semi-finished products, coolants and other material resources formed during the production of goods, performance of work or provision of services. Returnable waste includes valuables that have partially lost the consumer qualities of the original resources (chemical or physical properties) and, as a result, are used at increased costs (reduced output) or are not used for their intended purpose.
Returnable waste should not be confused with the remnants of inventories, which, in accordance with the technological process, are transferred to other departments as full-fledged raw materials (materials). Associated (associated) products obtained as a result of the technological process also do not apply to returnable waste.
The way in which returnable waste is assessed depends on its further use. If waste is transferred to the main or auxiliary production, its value is formed at the price of the original material resource (the price of possible use).
The cost of waste sold externally is determined by the taxpayer based on the sales price. The position of the Ministry of Finance of Russia (letter dated August 24, 2007 No. 03-03-06/1/591) is as follows: “The amount of material costs is reduced by the cost of sold returnable waste, which is determined in the manner provided for in Art. 40 of the Tax Code of the Russian Federation (at market value).” According to the author, when selling returnable waste externally, its cost should be assessed as part of expenses based on the actual selling price.
The amount of returnable waste reduces the amount of material costs during the period of their occurrence.
Often the costs of purchasing materials are associated with the receipt of various groups of material assets. For example, a transport organization delivers several types of raw materials to the taxpayer in one trip. Transportation costs are distributed among different types of inventories. The taxpayer chooses the distribution method independently and establishes it in the accounting policy for tax purposes. Costs can be divided in proportion to the purchase price of material assets or based on other economically feasible indicators.
In a special manner, surplus inventories identified as a result of inventory are assessed. Their cost, recognized as part of material expenses, is equal to the amount of income tax calculated on the amount of non-operating income corresponding to the market value of the identified surplus (clause 2 of Article 254 of the Tax Code of the Russian Federation). The value of property obtained during the dismantling or disassembly of decommissioned fixed assets is formed in a similar way.
The cost of inventories transferred to production but not processed is subtracted from the material expenses of the current month. The balances of inventories are valued in the same way as when they were written off for production.
Methods for assessing raw materials and materials for write-off
Raw materials written off during the production of goods (performance of work, provision of services) are assessed using one of four methods (clause 8 of Article 254 of the Tax Code of the Russian Federation):
By cost per unit of inventory;
At average cost;
At the cost of the first acquisitions (FIFO);
Based on the cost of recent acquisitions (LIFO).
The taxpayer establishes the chosen method in the accounting policy for profit tax purposes.
The inventory unit cost method is suitable for accounting for unique material assets that cannot be replaced by other inventories.
For other types of raw materials and supplies, it is advisable to use the average cost valuation method. There are two options for using this method.
The first option is a weighted average estimate. The average cost per unit of inventories written off for production is determined as the quotient of dividing the total cost of a given type of inventory by their quantity. The calculation takes into account the cost and the amount of remaining material assets at the beginning of the month, as well as the inventory received during the month. The resulting unit cost is multiplied by the amount of inventory of a given type written off per month.
With a moving average estimate, the cost per unit of inventory released into production is determined in the same way as with a weighted average estimate. The difference is that the cost of a written-off batch of inventories is calculated at the time they are released into production, that is, only the cost and quantity of inventories previously received in the corresponding month are taken into account.
When using any of the average cost valuation options, the quantity and cost of material assets returned to suppliers during the month are excluded from the calculation.
The FIFO method involves valuing materials at the prices of the first purchases. The cost of inventories that enter production first corresponds to the cost of the first acquisition, taking into account the cost of material assets listed at the beginning of the month. Typically, this assessment method is used if the company expects a significant reduction in prices for the raw materials used.
If there is reason to believe that prices for inventories will increase significantly, it is advisable to use the LIFO method. This method allows you to evaluate raw materials and materials at the prices of recent purchases.
The enterprise applies a tax accounting system, which includes the method of assessing raw materials and supplies, sequentially from one tax period to another (Article 313 of the Tax Code of the Russian Federation). You can change the inventory valuation method used only from the beginning of a new tax period. If changes are made to the legislation on taxes and fees related to the accounting of inventories, then additions to the accounting policy can be made within a year after the amendments enter into force.
The taxpayer has the right to establish different methods of writing off the value of certain groups of material assets. This does not contradict the norms of current legislation. The cost of raw materials and materials written off during the reporting period is calculated in a special register.
Example 1
The type of activity of Zakat LLC is furniture manufacturing. The waste from the main production generated in January 2009 was sold in the same month for 50,000 rubles. (including VAT RUB 7,627).
In the tax accounting of Zakat LLC in January 2009, the total amount of material expenses is reduced by the cost of waste sold - 42,373 rubles. (RUB 50,000: 118 x 100).
Example 2
On January 21, 2009, Trek LLC, for production purposes, purchased 3 tons of M500 grade cement worth 18,000 rubles from Stroymaterialy JSC. (including VAT 2,746 rubles) and 2 tons of cement grade M400 for 11,400 rubles. (including VAT 1,739 rubles) according to consignment note No. 326. Delivery of goods to the warehouse is paid by the buyer, its cost according to consignment note No. 28 dated January 21, 2009 is 5,000 rubles. (NDS is not appearing).
According to the accounting policy of Trek LLC, for tax purposes, the costs of purchasing several types of materials are distributed in proportion to the purchase price of raw materials and materials excluding VAT.
Based on the primary documents received from the supplier and cargo carrier, Trek LLC made entries in the tax register of information about the movement of purchased materials (Table 2).
table 2
Register of information on the movement of purchased materials
|
Name |
Cement M-400 |
Cement M-500 |
|
Date of operation |
21.01.2009 |
21.01.2009 |
|
Basis of operation |
Consignment note No. 326, |
Consignment note No. 326, |
|
Arrival, t | ||
|
Purchase cost of the batch, rub. |
15,254 (18,000: 118 x 100) |
9661 (11,400: 118 x 100) |
|
Delivery costs, rub. |
3061 |
1939 (5000 - 3061) |
|
Total cost of the batch, rub. |
18 315 (15 254 + 3061) |
11 600 (9661 + 1939) |
Tax Code, N 117-FZ | Art. 254 Tax Code of the Russian Federation
1. Material expenses, in particular, include the following expenses of the taxpayer:
1) for the acquisition of raw materials and (or) materials used in the production of goods (performance of work, provision of services) and (or) forming their basis or being a necessary component in the production of goods (performance of work, provision of services);
2) for the purchase of materials used:
paragraph excluded. - Federal Law of May 29, 2002 N 57-FZ;
for packaging and other preparation of manufactured and (or) sold goods (including pre-sale preparation);
for other production and economic needs (testing, control, maintenance, operation of fixed assets and other similar purposes);
3) for the purchase of tools, fixtures, equipment, instruments, laboratory equipment, work clothes and other means of individual and collective protection provided for by the legislation of the Russian Federation, and other property that is not depreciable property. The cost of such property is included in material costs in full as it is put into operation. In order to write off the value of the property specified in this subparagraph for more than one reporting period, the taxpayer has the right to independently determine the procedure for recognizing material expenses in the form of the cost of such property, taking into account the period of its use or other economically feasible indicators;
4) for the purchase of components undergoing installation and (or) semi-finished products undergoing additional processing from the taxpayer;
5) for the purchase of fuel, water, energy of all types, spent on technological purposes, production (including by the taxpayer himself for production needs) of all types of energy, heating of buildings, as well as costs of production and (or) acquisition of power, costs of transformation and energy transfer;
6) for the acquisition of works and services of a production nature, performed by third-party organizations or individual entrepreneurs, as well as for the performance of these works (provision of services) by structural divisions of the taxpayer.
Works (services) of a production nature include the performance of individual operations for the production (manufacturing) of products, performance of work, provision of services, processing of raw materials (materials), monitoring compliance with established technological processes, maintenance of fixed assets and other similar work.
Works (services) of a production nature also include transport services of third-party organizations (including individual entrepreneurs) and (or) structural divisions of the taxpayer itself for the transportation of goods within the organization, in particular the movement of raw materials, tools, parts, workpieces, and other types of goods with base (central) warehouse to workshops (departments) and delivery of finished products in accordance with the terms of agreements (contracts);
7) related to the maintenance and operation of fixed assets and other property for environmental purposes (including costs associated with the maintenance and operation of treatment facilities, ash collectors, filters and other environmental facilities, costs for the disposal of environmentally hazardous waste, costs for the purchase of services from third-party organizations reception, storage and destruction of environmentally hazardous waste, wastewater treatment, formation of sanitary protection zones in accordance with current state sanitary and epidemiological rules and regulations, payments for emissions of pollutants into the air, discharges of pollutants in wastewater into water bodies, carried out within the limits of permissible emissions standards, permissible discharge standards, for the disposal of production and consumption waste within the established limits for their disposal and other similar expenses).
2. The cost of inventories included in material expenses is determined based on their acquisition prices (excluding value added tax and excise taxes, except as provided for by this Code), including commissions paid to intermediary organizations, import customs duties and fees, transportation costs and other costs associated with the acquisition of inventories.
The cost of inventories, other property in the form of surpluses identified during the inventory, and (or) property received free of charge, and (or) property received during the dismantling or disassembly of decommissioned fixed assets, repair, modernization, reconstruction, technical rearmament or partial liquidation of fixed assets is defined as the amount of income recorded by the taxpayer in the manner prescribed by paragraphs 8, 13 and 20 of part two of Article 250 of this Code.
3. If the cost of returnable packaging accepted from a supplier with inventories is included in the price of these valuables, the cost of returnable packaging at the price of its possible use or sale is excluded from the total cost of their acquisition. The cost of non-returnable containers and packaging accepted from the supplier with inventories is included in the amount of expenses for their acquisition.
The classification of containers as returnable or non-returnable is determined by the terms of the agreement (contract) for the acquisition of inventories.
4. If the taxpayer uses products of its own production as raw materials, spare parts, components, semi-finished products and other material expenses, and also if the taxpayer includes the results of work or services of its own production as part of the material expenses, the assessment of these products, results works or services of own production are carried out based on the assessment of finished products (works, services) in accordance with Article 319 of this Code.
5. The amount of material expenses of the current month is reduced by the value of the remaining inventories transferred to production, but not used in production at the end of the month. The valuation of such inventories should correspond to their valuation upon write-off.
6. The amount of material costs is reduced by the cost of returnable waste. For the purposes of this chapter, returnable waste refers to the remains of raw materials (materials), semi-finished products, coolants and other types of material resources generated during the production of goods (performance of work, provision of services), which have partially lost the consumer qualities of the original resources (chemical or physical properties) and in Because of this, they are used at increased costs (reduced product yield) or are not used for their intended purpose.
Remains of inventories, which, in accordance with the technological process, are transferred to other departments as full-fledged raw materials (materials) for the production of other types of goods (works, services), as well as by-products obtained as a result of implementation of the technological process.
Returnable waste is assessed in the following order:
1) at a reduced price of the initial material resource (at the price of possible use), if this waste can be used for main or auxiliary production, but with increased costs (reduced yield of finished products);
2) at the selling price, if this waste is sold externally.
7. The following are considered material expenses for tax purposes:
1) expenses for land reclamation and other environmental measures, unless otherwise established by Article 261 of this Code;
2) losses from shortages and (or) damage during storage and transportation of inventories within the limits of natural loss norms approved in the manner established by the Government of the Russian Federation;
3) technological losses during production and (or) transportation. Technological losses are losses during the production and (or) transportation of goods (work, services), caused by the technological features of the production cycle and (or) the transportation process, as well as the physical and chemical characteristics of the raw materials used;
4) expenses for mining and preparatory work during the extraction of mineral resources, for operational stripping work in quarries and cutting work during underground mining within the mining allotment of mining enterprises.
8. When determining the amount of material expenses when writing off raw materials and materials used in the production (manufacturing) of goods (performing work, providing services), in accordance with the accounting policy adopted by the organization for tax purposes, one of the following methods for assessing the specified raw materials and materials is used:
valuation method based on the cost of a unit of inventory;
average cost valuation method;
valuation method based on the cost of first acquisitions (FIFO);
the paragraph is no longer valid. - Federal Law of April 20, 2014 N 81-FZ.
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1. The commented article is devoted to only one of the types of expenses associated with production and (or) sales (see the commentary on this to Article 253 of the Tax Code), namely material expenses. The latter include:
1) costs of purchasing raw materials (for example, cotton, flour, meat) and (or) materials (including parts, semi-finished products, components) used in the manufacture of goods, performance of work, provision of services. This refers to acquisitions under purchase and sale agreements (including retail, supply, contracting, energy supply), barter, and other paid civil transactions;
2) expenses for the purchase of materials that are used in the specified subparagraphs. 2 p. 1 art. 254 purposes. In practice, the question arose: do the rules of subsection apply? 2 p. 1 art. 254 for cases of purchasing software products (including on floppy disks and CDs)? No, they do not apply (see the commentary on this to Article 264 of the Tax Code);
3) costs of purchasing (under any paid transaction) spare parts, materials necessary for repairing the property mentioned in subparagraph. 3 p. 1 art. 254. In practice, the question arose: are subsections covered? 3 p. 1 art. 254 costs for the purchase of plumbing equipment necessary to replace failed similar equipment in the organization’s production building? No, they do not: in this case you need to follow the rules of Art. 260 NK (see commentary to it);
4) costs for the purchase of components and (or) semi-finished products that undergo installation and (or) additional processing in the organization. In practice, the question arose: is it possible to be guided by sub. 4 paragraphs 1 art. 254, if the organization purchased semi-finished products, which, although subjected to additional processing by the taxpayer, were used not for sale (after processing), but for decorative decoration of the building where the organization’s administration is located? No, you can’t, see the comment about this. to Art. 264 NK;
5) costs for the purchase (under contracts for energy, gas, water supply, etc., as well as under an exchange agreement) of water, energy, etc., specified in subparagraph. 5 p. 1 art. 254. In practice, a question has arisen: if an enterprise purchases compressed air, does it have the right to attribute the costs incurred to those specified in subparagraph. 5 p. 1 art. 254? Systematic interpretation of Art. 254 Tax Code and Art. 548 of the Civil Code allows us to answer this question positively;
6) costs for the acquisition of works and services specified in subparagraph. 6 clause 1 art. 254. In this case, you need to pay attention to the following:
a) works and services of a production nature are set out in subparagraph. 6 clause 1 art. 254 in a non-exhaustive manner. These (taking into account specific circumstances) may include other works and services;
b) costs associated with the acquisition of works and services of a production nature from another structural unit of this organization (for example, a workshop, a farm, a building) are subject to subclause. 6 clause 1 art. 254.
It does not matter whether the mentioned structural unit belongs to territorially separate (for example, a branch, other separate division, taking into account the rules of Article 11 of the Tax Code) or internal (for example, a laboratory, site, workshop) divisions of the organization;
7) costs associated with the maintenance and operation of environmental funds. At the same time, it is necessary to take into account that:
a) in sub. 7 clause 1 art. 254 contains only an approximate (i.e. non-exhaustive) list of such costs;
b) the expenses mentioned in subparagraph. 7 clause 1 art. 254 should be distinguished from expenses associated with the development of natural resources (see the commentary on this to Article 261 of the Tax Code).
2. Rules clause 2 art. 254 are important for the correct determination of the tax base for corporate income tax, because they establish the rules for determining the cost of material costs (expenses). In doing so, let us pay attention to the following:
a) in paragraph 2 of Art. 254 we are talking specifically about the cost of commodity-material assets (and not work, services). In this regard, the question arose in practice: is it possible to apply the rules for determining prices (set out in paragraph 2 of Article 254) in relation to prices for work (services) of a production nature. No you can not. Unfortunately, in paragraph 2 of Art. 254 there is a gap, and the legislator needs to fill it. Until then, taxpayers and tax authorities must be guided by the general provisions of Art. 40 of the Tax Code (see commentary to it in the book: Guev A.N. Article-by-article commentary to part one of the Tax Code of the Russian Federation. 2nd edition. M.: CONTRACT, 2001);
b) the provisions of paragraph 2 of Art. 254 imperatively prescribe (when determining the cost of material costs) to proceed from the purchase prices of inventories specified in the contract (invoice, invoice, etc. documents);
c) included in the mentioned cost:
The amounts of taxes (for example, VAT, sales tax) taken into account as expenses (in accordance with Article 264 of the Tax Code, see commentary thereto) are not included;
Includes the amount of commission (brokerage, agent, etc.) remuneration paid to intermediary organizations. In practice, the question arose: if the services of a commission agent or agent were provided by an individual entrepreneur, is the cost of these services included in the price? Alas, there is an obvious gap: from now on, until it is filled, it is necessary to be guided by the literal text of paragraph 2 of Art. 254, which means that the cost of the intermediary service - individual entrepreneur - is not included in the price;
d) import customs duties and fees are also included in the cost of goods and materials. To the latter, in accordance with Art. 110 TC, include:
Customs duty;
VAT and excise taxes;
Fees for issuing licenses by customs authorities;
Fees for issuing a qualification certificate of a customs clearance specialist and renewal of the certificate;
Customs fees for customs clearance and storage of goods;
Customs fees for customs escort of goods;
Information and consultation fees;
Fee for making a preliminary decision;
Having assessed the evidence presented in the case materials according to the rules of Article 71 of the Arbitration Procedural Code of the Russian Federation, the courts of first and appellate instances, guided by the provisions of Articles 164, 165, 167, 169, 171, 172, 252, 254, 318, 319 of the Tax Code, Articles 72, 73 Forest Code of the Russian Federation, taking into account GOST 17461-84 “Interstate standard. Logging industry technology...
Thus, the costs of purchasing materials used for the production of these products are classified as direct costs named in subparagraph 1 of paragraph 1 of Article 254 of the Tax Code. According to paragraph 2 of Article 318 of the Code, direct expenses relate to the expenses of the current reporting (tax) period as products are sold, in the cost of which they are taken into account...
The applicant also indicated that, in violation of paragraph 7 of Article 254 of the Tax Code of the Russian Federation, the courts did not take into account the taxpayer’s right to reduce taxable profit not only by the amount of losses from shortages within the limits of natural loss, but also by the amount of technological losses during production and (or) transportation. ..
Accounting for material costs is an important part of the work of an accountant in an organization. Let's figure out what is included in material costs, how to calculate them correctly, and what wiring to use.
An accountant is a universal profession; specialization in it is only temporary, when the accounting department and the company are large and each specialist is engaged in his own area. However, to ensure that employees do not lose versatility and useful skills, experienced chief accountants try to regularly change their positions. And then the specialist who dealt with wages has to remember how to correctly calculate material costs, and what they actually are. Let's try to refresh our memory of basic knowledge together and start with the concept itself.
The concept of material costs (MC) is found in both accounting and tax accounting. According to the norms of Article 254 of the Tax Code of the Russian Federation, material costs include:
This list in tax accounting is closed. In accounting, the concept of MH is defined in paragraph 8 of PBU 10/99 “Expenses of the organization,” but without a list. Therefore, each organization can independently determine the definition of this concept in accounting and be sure to prescribe the corresponding list in its accounting policies. In fact, these will be the same expenses that are prescribed in the Tax Code of the Russian Federation, taking into account the specifics of the company’s activities.
It would seem that everything is simple: there is an established list, and we focus on it. But in practice, there is also a division of MH into:
This gradation is also provided for in tax accounting. In particular, Article 318 of the Tax Code of the Russian Federation. True, taxpayers are given the right to independently establish a list of direct MH, but in compliance with the established requirements for them. According to the norms of the Tax Code of the Russian Federation, direct material costs are:
In order to display material costs in the balance sheet (line 1210), the accountant must summarize the balances of several accounts at once:
Therefore, the Ministry of Finance in accounting is reflected precisely in these accounts, as determined by Order of the Ministry of Finance dated July 2, 2010 No. 66n. Turnovers during the month also pass through accounts 25 “General production expenses” and 26 “General expenses”, but these accounts do not have a balance at the end of the month.
Since MH directly affects the cost of production, and therefore the profitability of the organization, it is necessary to carry out analysis for them, as well as calculate coefficients. As a rule, this is done not by accountants, but by economists. They usually calculate how much profit can be made per ruble of material costs. The formula they use for this includes the following data:
The formula looks like this:
The obtained result makes it possible to calculate the profitability of production, that is, find out how much you can earn from each ruble spent or, conversely, lose (which is extremely undesirable).
In addition, it is possible to determine the so-called total material intensity, which is calculated as the ratio of the labor cost to the total amount of expenses incurred for the production of goods. This value can show the share of MH in the total cost of production. However, it should be remembered that other costs, such as the maintenance of the administrative apparatus, transport, etc., also influence the cost, and therefore the profitability.
Determining all possible direct costs is called a direct material cost budget. It is necessary for the organization to plan its work. Not only economists, but also an accountant take part in budgeting, since in order to determine accurate results it is necessary to know not only the balances of materials and other supplies, but also the amount of accounts payable for them, as well as the repayment schedule. In this way, you can not only draw up a current budget, but also calculate it for a certain period of time, which allows you to determine the company’s need for finance for the purchase of materials. Timely financing in the required amount is insurance against production stoppages due to a lack of raw materials.
Material costs in most organizations are one of the main cost items, along with labor costs and contributions, and depreciation of fixed assets. In this case, the terms “costs” and “expenses” are usually considered synonymous. We will look at what material costs are in accounting and tax accounting.
Material costs are named as one of the types of expenses for ordinary activities in PBU 10/99 (clause 8 of PBU 10/99). At the same time, the list of material costs from an accounting point of view is not disclosed.
If we turn to tax legislation, then in Art. 254 of the Tax Code of the Russian Federation provides a list of costs that can be classified as material expenses in tax accounting. This list is open.
What are material costs?
Material costs include:
We can say that material costs in accounting are the same costs mentioned above, taking into account the specifics of a particular activity.
The accountant should enshrine the list of material expenses in the organization’s accounting policies for accounting and tax accounting purposes. Ours will help you draw up an accounting policy.
Despite the fact that the list of expenses taken into account under the simplified tax system is closed, material expenses during the simplification are similar to the costs that are taken into account by income tax payers and which are named in Art. 254 of the Tax Code of the Russian Federation (clause 5, clause 1, clause 2, article 346.16 of the Tax Code of the Russian Federation).
The concept of direct material costs can be found in the Tax Code (clause 1 of Article 318 of the Tax Code of the Russian Federation). Thus, direct material costs include:
At the same time, the organization has the right to independently establish (paragraph 10, paragraph 1, article 318 of the Tax Code of the Russian Federation).
Since direct material costs are expenses that are directly related to the production of goods (performance of work, provision of services) and can be directly attributed to their cost, direct cost management is the key to reducing costs and increasing profitability. By analyzing direct material costs, determining their share in the cost and price of the final product, as well as the share of material costs for individual divisions and types of activities, it is possible to study indicators over time and identify reserves for increasing profitability.
The topic “Material expenses” is probably one of the most interesting in the field of finance. It closely resonates with the laws of taxation, which attracts even more attention, since they should not only be studied, but also simply useful to know. When talking about expenses, we immediately imagine a large enterprise, the production process of which we want to quickly understand. Which is what we'll get to now.
Any enterprise, and primarily a manufacturing one, uses in its activities a huge amount of different materials, raw materials, fuel, etc. Correct, competent reflection in accounting of the costs of their acquisition allows you to minimize the tax base when making calculations with the budget.
The composition is very clearly regulated by the Tax Code of the Russian Federation, in particular, Article 254, Part 2. It states that material expenses include the following expenses of the taxpayer:
Expenses spent on the purchase of raw materials and materials that are used directly in production when performing a certain type of work or when providing various types of services.
Funds for materials for packaging or other types of preparation of manufactured or sold goods, including pre-sale. Also costs for other needs related to the economic part: testing, quality and maintenance control, operation of fixed assets and other purposes.
Expenses for tools, fixtures, equipment, devices, laboratory equipment, special clothing, all kinds of individual and collective protective equipment, as well as other types of property provided for by the legislation of the Russian Federation.
In addition to the above, the consumption of material resources includes: the purchase of components for installation work, semi-finished products for additional processing, funds for fuel, water and energy of all types, its production, transformation and transfer, which provide for the entire technological production process. As well as the costs of work performed by specialists from the taxpayer’s own organization.
All material resources supplied to the enterprise are taken into account in price terms. This includes all costs except for the cost of returnable packaging. If it is separately specified in the contract, it is taken into account at the price of possible use and without VAT, which is taken into account in a separate invoice. In addition, the amount of material costs does not imply the price of returnable waste, which, according to technology, is generated during the production process and can be used in the future for commercial purposes.
To more quickly launch materials into production, limit intake cards are used, which belong to the category In order to include the cost of materials used in the costs of main production, their actual consumption is determined at specified intervals based on these documents. It is important to know that at this stage it is necessary to make a reconciliation, to find out whether real and standard material costs correspond to each other.
At large enterprises that use a wide range of materials in the production of several types of products, it is advisable to use standard or coefficient methods to write them off. This will make it possible not only to more accurately determine the cost of different types of products, but also to determine discrepancies (overspend) of certain ones. One of the recommendations is periodic inventory taking. Also, in the case of a long production cycle (for example, when purchased semi-finished products are used in several stages of the production process), it is necessary to maintain an operational balance of the movement of parts in production, based on the principle “the more detailed, the better.”
Identifying discrepancies between standard and actual consumption of materials, as well as analyzing the reasons for this situation, will help minimize costs, which will ultimately have a positive impact on the overall financial condition of the enterprise. And in the future, it will provide the opportunity to competently structure the entire production process, conduct a correct pricing policy, and, therefore, competently take into account material costs, based on the experience gained.
It is also worth paying attention to Art. 261 part 2 of the Tax Code of the Russian Federation, according to which material expenses should include the funds used for restoration and environmental measures taken. In addition, contribute to the account for losses from damage and shortages during storage or transportation of materials and equipment, if they exceed the permissible rate of natural losses established by the Government of the Russian Federation. The Code also includes technological losses that occurred during the production process or transportation. Moreover, such losses mean losses of goods, works, and services that are caused by the peculiarities of the production cycle, issues of movement, as well as the physical and chemical composition of the raw materials used in the work. When extracting minerals, working in quarries, and during underground mining within mining enterprises, mining and preparatory activities are included in the fixed costs plus everything.
Taking into account the recommendations of the Ministry of Taxes and Duties, material expenses can be taken into account for tax purposes only after they have been paid. At the same time, the cost of materials and components should be written off as expenses immediately at the time of their transfer. There are no direct instructions in the Law for this, but, as practice shows, the recommendations of the Ministry must be listened to most carefully.
