In this article the general bases providing a food in field table employees of agricultural enterprises, and also a reflection order in the accounting account of taxes and contributions social funds are stated.
CONSULTATIONS
ACCOUNT AND TAXATION
Let’s consider the following situation. The agricultural enterprise will organize a food of the workers in so-called field dining rooms. Products for preparation of dinners are used as own (potatoes, vegetables, a flour), and purchased (bread, salt, grain). Some workers eat free of charge, and some pay at a discount. Us the question of taxation of cost of a food by various taxes and social contributions in this case interests.
The general bases for providing a food
First of all we will note that for our situation "free of charge" doesn’t mean for nothing. Clear business, workers instead carry out labor function, and cost of a food is one of components of cost of work which has character of a social privilege.
According to Instruction No. 5 subitem 2.3.4 payment or grants for a food of workers belong to payments of social character and join in compensation fund as a part of other incentive and compensatory payments. That is providing a food free or at a discount – is salary payment by nature.
Such food should be documentary obosnoyovano in the collective agreement where makes a reservation:
• granting order;
• categories of workers to which it is provided;
• food cost, etc.
By the way, cost of a food is applied to charge of taxes and social contributions. Usually for our situation – it is cost of a food. However, as the salary is charged till determination of actual cost, it is expedient to take planned prime cost which should be reconsidered monthly with a view of the greatest approach to the actual. Then from a position of tax accounting planned prime cost will be the usual price of providing a food.
Taxation
PERSONAL INCOME TAX
As it was specified above, cost of a free food is one of salary elements therefore to it it is necessary to apply the relevant standards of the Law No. 889 concerning the salary taxation, in particular;
• for personal income tax charge cost of a food is multiplied by the "natural" factor provided by item 3.4 (since 01.01.07 – 1,176470588). If the enterprise is the payer of the VAT, in addition cost of a food increases by the VAT sum;
• the salary sum including food cost, for inclusion in the taxable income of the worker decreases by the sum of contributions of the Social Insurance Fund and PF (p, 3.5);
• the tax social concession is applied to a salary, including cost of a food (subitem 6.5.1).
The taxable income of workers which partially pay for a food, joins the difference increased by "natural" factor between an overall cost of a food (planned prime cost) together with the VAT and the paid part of cost (actually – a discount).
Contributions to the Social Insurance Fund and PF
All contributions to the Social Insurance Fund and PF are charged and keep from cost of a free food (I will repeat again – as from a salary element) in a generally established order. Base for charge of these contributions is the food plus VAT cost increased by "natural" factor (Law No. 889 item 3.4).
This situation proves to be true:
• rather pension contributions – the Letter No. 7132;
• concerning contributions to the Social Insurance Fund on VPT – Instruction No. 16 item 4.2;
• concerning contributions to the Social Insurance Fund on an unemployment case – Instruction No. 339 item 5.12.
Concerning contributions to insurance upon occupational accidents, unfortunately, no explanations of the relevant Fund are present.
No. 12 (144), on JUNE 25 2007g.
Profits tax
For reflection in the accounting of providing a free food it is necessary to consider as three independent operations:
1) sale to the worker of services in a food (finished product);
2) charge to the worker of a salary of food costs (the grant for a food);
3) offset between the provided services and the added salary.
In the accounting of the profits tax the first two operations are reflected.
The first treats sale because when providing a food ready dishes actually carry over workers. Thus cost of a food joins in a gross revenue (subitem 4.1.1 of the Law on profit).
As sale is carried out to individuals, the income is determined by the usual prices (we will tell, according to the collective agreement at planned prime cost) (subitem 7.4.3 of the Law on profit). Certainly, actual cost of a food on this operation belongs to gross expenses.
As to the second operation, according to subitem 5.6.1 of the Law on profit the structure of the gross joins expenses on compensation of workers, both in monetary, and in a natural form. Therefore added at a rate of food cost the salary (according to Law No. 889 item 3.4 increased by the VAT and increased by "natural" factor) belongs to VR as a part of expenses on compensation.
VAT
In tax accounting of the VAT it is reflected as the first operation (see the previous section) – sale to the worker of services in a food (to subitem 3.1.1 of the Law on the VAT).
The taxation basis thus is defined at level of the usual prices (item 4.2 of the called Law). Such price for our situation is planned cost of a free food specified in the collective agreement. (An order of reflection of the tax obligations in the declaration on the VAT see in this number.
At this VAT from goods purchased (works, services), the dishes used for preparation, treats the tax credit * as they are acquired with a view of their further use in taxable operations within economic activity of agricultural enterprise (subitem 7.4.1 of the Law on the VAT).
Accounting
The greatest problem of accounting in field dining rooms is formation of cost of their activity (preparation of dishes). I will remind that in practice for this purpose apply one of two essentially different methods of the account which conditionally call "production" and "trading". Let’s consider them in more detail.
The "production" method is that all expenses on production { preparation of dishes) are reflected in account 23 "Production" with distribution by types of productions, items of expenditure and types or groups of made production.
Made production on actual cost from account 23 is written off into account 26 "Finished product", and then in realization.
On a "trading" method all expenses suffered on preparation of dishes, except material, are considered as period expenses (address expenses) which don’t join in production product cost and written off into account 93 "Distribution costs". Prime cost of dishes doesn’t pay off at all.
In accounting cost of dishes is reflected in account 28 "Goods" at cost of products, raw materials of which they are made, that is, as a rule, at sale prices, is more rare – at the acquisition prices.
As we see, for the field dining rooms providing a free food to workers, the "production" method more approaches. If the "trading" method is chosen, it will be necessary differently, than we specified above, to formulate in the collective agreement determination of cost on which a food is provided to workers.
For example, it is necessary to write down that a food is provided at cost of dishes with the minimum planned margin which pays expenses of the address. And the margin will need to be reconsidered with a view of the greatest approach to the actual size of expenses of the address.
Accounting and tax accounting we will show on a conditional numerical example.
Example
The agricultural enterprise – the payer of the VAT and the profits tax provided a koldogovor in the section "Compensation" providing a food:
• to combine operators – it is free,
• to the tractor operators occupied on works in field conditions – from 60 % – ache payment from planned prime cost.
Planned cost of a food for a month of one worker makes 200 UAH.
Due to the providing a free food to the combine operator compensatory payment in the sum of 282,35 UAH is added., that is (200 + 200 x 20 %) x 1,176470588.
To the tractor operator occupied on works in field usloyoviya, compensatory payment at a rate of 40 % is added – ache discounts from planned cost of the provided food plus the VAT (200 + 200 x 20 %) x 40 % = 96 UAH., including the VAT – 16 UAH. This payment is considered in the added salary in the sum of 112,94 UAH. (96 x 1,176470588).
The enterprise applies a "production" method, expenses of a dining room considers on subaccount 232, and the main production – on subaccount 231.
(UAH.)
* Is defined proceeding from contractual (contract) cost of the goods (services), but not above level of the usual prices in case contractual price of such goods (services) differs more than for 20 % from the usual.
* Cost of material making finished product of a dining room in the sum of 200 UAH. it is carried on gross expenses by a recalculation way according to item 5.9 of the Law on profit at the moment of its actual realization (providing a food to workers).
(On newspaper materials Balance Agro).