In this publication the order of write-off of hopeless receivables and payables, reflection in accounting, tax accounting and in the declaration on the VAT is described.
WRITE-OFF of the HOPELESS
Each enterprise in the course of an economic deyayotelnost can have either debit, or kreyoditorsky debt. And sometimes such zayodolzhennost gets the status of a hopeless zadolyozhennost.
The debt becomes hopeless in two sluchayax:
• after term of limitation period;
• in case of confidence of its default debitoyory (for example, elimination, bankruptcy debitora, etc.).
When the debt becomes hopeless, it is subject to write-off.
In the real consultation we will consider an order of reflection of write-off of hopeless debt in accounting, and also taxation of such opeyoratsiya of the VAT by the enterprises being platelshhikami FSN.
Term of limitation period
More often the debt becomes hopeless in connection with the expiration of limitation period.
What is the limitation period?
Limitation period – is term, in limits kotorogo the person can appeal to court with the requirement about protection of the civil law or interest (Art. 256 of group of companies *).
The general term of limitation period makes three years.
Take into consideration: important correctly opredelit the moment began the expirations of a claim davyonost. In practice there was an erroneous opinion that term of limitation period starts to expire from the moment of debt emergence (shipment of the goods or receiving an advance payment). However it not so.
According to Art. 261 of group of companies the expiration of a claim davyonost begins with the moment when the person learned or could learn that its right is broken.
What does it mean?
For example, the enterprise shipped production to a pokuyopatel on August 11, 2006. According to the font sale contract the buyer should pay off for poyoluchenny production on September 8, 2006. Thus, if before this date the buyer not rasschitaetsya with the seller, term of limitation period starts to expire with September 9 as this day the seller learned that his right is broken, instead of from the moment of production shipment.
If in the contract an obligation date of performance (otgruzki the goods on account of the listed advance payment or transfer of means for the shipped goods) not ukazan, the creditor has the right to demand obligation execution at any time (Art. 530 of group of companies). The debtor is obliged to liquidate a debt within 7 days from the date of a predjyavyoleniye of the requirement of the creditor. In that case term of isyokovy prescription starts to expire upon termination of a seyomidnevny date of performance of the obligation.
Let’s notice that according to the arrangement of the parties term of iskoyovy prescription can be increased. About its uveliyocheniye it is necessary to make an additional soglayosheniye to the contract or the separate contract on a uveliyocheniye of term of limitation period.
Term of limitation period can’t be reduced according to the arrangement of the parties.
Receivables
Receivables – are the sum of a zadolzhenyonost of debtors (debtors). The hopeless debitoryosky debt – is the current debit zadolyozhennost concerning which there is a uverenyonost in its non-return the debtor or on which expired term of limitation period.
Let’s consider an order of write-off of hopeless debitoryosky debt which arose in the following cases:
• the enterprise shipped production (rendered services), and the buyer (customer) didn’t settle an invoice;
• the enterprise listed an advance payment for production (services), and the supplier didn’t ship production (didn’t render service).
Accounting
In accounting the hopeless debit zayodolzhennost belongs on expenses and is reflected on subaccount 944 debit Doubtful and bad debts.
Written-off receivables are considered on zabalansovy subaccount 071 Written-off receivables within not less than three years from the date of write-off with a view of supervision over possibility of its collecting in cases of change of a property soyostoyaniye of the debtor.
Order of write-off of hopeless receivables on the shipped goods
VAT
At shipment of production (services) the enterprise for a peryovy event added the tax obligations on the VAT. After term of limitation period nalogoyovy obligations aren’t corrected, as otyogruzhenny production (the rendered services) passes to the category gratuitously provided, and such opeyoratsiya is object of taxation of the VAT (subitem 3.1.1 of the Law on the VAT taking into account item 1.4).
Example 1
The enterprise shipped production of 21.08.03 Soyoglasno to the purchase and sale contract the buyer dolzhen to pay off 04.09.03. Before this date the pokupayotel didn’t pay off, therefore since 05.09.03 nachinaet to expire term of limitation period. Term of limitation period expired 05.09.06.
Reflection in accounting of such operations is presented in tab. 1
Table 1
(UAH.)
Order of write-off of hopeless receivables on the listed advance payments
VAT
The enterprise, having listed advance payment for the goods, at a naliyochiya of the tax consignment note on the first event uvelichivaet the tax credit.
After term of limitation period the tax credit should be modified, as pravo on the tax credit exists only at a priyoobreteniye of the goods (works, services). And as tovary (services) weren’t received by the enterprise, there are no bases for the tax credit.
If the enterprise uses a special mode of payment of the VAT according to item 11.29 of the Law on the VAT, a koryorektirovka of the tax credit it is necessary proizvesti in that declaration in which the tax credit was originally reflected at advance payment transfer.
Let’s show on a conditional numerical example reflection of operations on receivables write-off in accounting and in the declaration on the VAT.
Example 2
The enterprise listed money for the goods of 30.07.03. The seller should put the goods of 11.08.03. As for this date the seller didn’t put the goods, since 12.08.03 starts to expire term of limitation period. Term of limitation period expired 12.08.06, and debt podlezhit to write-off.
Reflection in accounting of these operations is given in tab. 2.
Table 2
(UAH.)
Accounts payable
The accounts payable – is debt a predyopriyatiya to other legal entities and individuals.
Let’s consider write-off of a hopeless creditor zayodolzhennost which arose in the following cases:
• the enterprise received the goods (services), but not rasschitalos for them;
• the enterprise received an advance payment, but didn’t ship production (didn’t render service).
In accounting the hopeless creditor zayodolzhennost is written off on the income and the income of write-off of creditorsyoky debt is reflected on subaccount 717 credit .
Order of write-off of accounts payable on the received goods
VAT
At an oprikhodovaniye of the goods from the supplier and a polucheyoniya of the tax consignment note the enterprise reflects pravo on the tax credit if these goods are intended for use in an economic deyayotelnost within taxable operations.
After term of limitation period tax kredit it is not necessary to correct, as conditions for reference of the sums of the VAT to structure of the tax credit are observed: the goods are used in a production activity in taxable operations.
Let’s consider on a conditional numerical example otrazheyony operations on write-off of a creditor zadolzhenyonost in accounting and in the declaration on the VAT.
Example 3
The enterprise received spare parts from a postavyoshchik of 06.08.03 According to the contract money for spare parts it was necessary perechislit 03.09.03. As money weren’t listed, since 04.09.03 starts to expire term of limitation period. Term of limitation period expired 04.09.06 therefore the accounts payable is subject to write-off.
Reflection in accounting and in the declaration on the VAT of such operations is presented in tab. 3.
Table 3
(UAH.)
Order of write-off of accounts payable on the received advance payments
VAT
The enterprise, having received money from a pokupayotel, should add on the first event the tax obligations on the VAT.
As after term of limitation period the proyoduktsiya wasn’t shipped (services weren’t okazany), it is possible to say that delivery not sostoyalas. And there is no delivery, means, there is no also an object for charge of the tax obligations as operations on delivery of the goods (services) are objekyoty VAT taxation.
Thus, the tax obligations on the VAT added at receiving an advance payment, should be modified.
If the enterprise uses a special mode of payment of the VAT according to item 11.29 of the Law on the VAT, a koryorektirovka of the tax obligations it is necessary proizvesti in that declaration in which naloyogovy obligations were reflected when receiving an advance payment.
Example 4
The enterprise received an advance payment of 22.07.03 from the buyer. As according to the contract it was necessary to put a produkyotsiya 20.08.03, starts to expire term claim davnosti 21.08.03. Term of limitation period expired 21.08.06, and the debt is subject to write-off.
Reflection in accounting and in the declaration on the VAT of these operations is presented in tab. 4.
Table 4
(UAH.)
(On Balans-Agro newspaper materials).