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How is the time of a taxable transaction determined for debt amounts?
How is the time of a taxable transaction determined for debt amounts?
In some cases, enterprises may also receive borrowed funds from taxpayers to whom they supply goods. We will try to clarify issues such as how this process should be formalized and when and how taxes should be calculated. The topic is commented on by tax expert Meyxanım Alakbarova.
When an enterprise simultaneously receives loans from companies to which it supplies goods (works, services), it must pay attention to complying with the requirements of Article 166.4 of the Tax Code when preparing the VAT return. According to this article, for loans granted after the supply of goods (works, services) (except for loans granted by credit institutions and persons carrying out banking operations), the time of the taxable transaction is the date on which the loan is granted.
Example 1: ln July, “AA” LLC supplied goods (works, services) worth 10,000 manats to “BB” LLC, resulting in a receivable (trade receivable) of 10,000 manats. In August, “AA” LLC received a loan of 20,000 manats from the same company. According to Article 166.4.1 of the Tax Code, if “AA” LLC has a receivable of 10,000 manats and, instead of requesting payment for the goods (works, services), receives a loan from the counterparty, this is considered a taxable transaction. In this case, an inflow of 10,000 manats must be reflected in the August VAT return, and VAT in the amount of 1,800 manats must be calculated. If the receivable of 10,000 manats is paid by “BB” LLC in September, this amount will not be declared a second time, as it has already been reported and declared in August. If a desk audit discrepancy notice regarding the inflow is received in September, an explanation should be submitted with reference to Article 166.4.1 of the Tax Code.
According to Article 166.4.2 of the Tax Code, for loans granted before the supply of goods (works, services) (except for loans granted by credit institutions and persons carrying out banking operations), the time of the taxable transaction is the date of supply of the goods (works, services).
Example 2: In July, “AA” LLC received a loan of 20,000 manats from “BB” LLC. At that time, “AA” LLC did not have any receivable from “BB” LLC. In August, “AA” LLC supplied goods (works, services) worth 10,000 manats to “BB” LLC. Despite the fact that the value of these goods (works, services) was not paid by “BB” LLC in August, pursuant to Article 166.4.2 of the Tax Code, 10,000 manats must be reflected as an inflow in the August VAT return and VAT in the amount of 1,800 manats must be calculated. If the receivable of 10,000 manats is paid by “BB” LLC in September, it will not be declared a second time, as it has already been reported in the August inflow. If a desk audit discrepancy notice regarding the inflow is received in September, a response should be provided with reference to Article 166.4.2 of the Tax Code.
In some cases, enterprises may also receive borrowed funds from taxpayers to whom they supply goods. We will try to clarify issues such as how this process should be formalized and when and how taxes should be calculated. The topic is commented on by tax expert Meyxanım Alakbarova.
When an enterprise simultaneously receives loans from companies to which it supplies goods (works, services), it must pay attention to complying with the requirements of Article 166.4 of the Tax Code when preparing the VAT return. According to this article, for loans granted after the supply of goods (works, services) (except for loans granted by credit institutions and persons carrying out banking operations), the time of the taxable transaction is the date on which the loan is granted.
Example 1: ln July, “AA” LLC supplied goods (works, services) worth 10,000 manats to “BB” LLC, resulting in a receivable (trade receivable) of 10,000 manats. In August, “AA” LLC received a loan of 20,000 manats from the same company. According to Article 166.4.1 of the Tax Code, if “AA” LLC has a receivable of 10,000 manats and, instead of requesting payment for the goods (works, services), receives a loan from the counterparty, this is considered a taxable transaction. In this case, an inflow of 10,000 manats must be reflected in the August VAT return, and VAT in the amount of 1,800 manats must be calculated. If the receivable of 10,000 manats is paid by “BB” LLC in September, this amount will not be declared a second time, as it has already been reported and declared in August. If a desk audit discrepancy notice regarding the inflow is received in September, an explanation should be submitted with reference to Article 166.4.1 of the Tax Code.
According to Article 166.4.2 of the Tax Code, for loans granted before the supply of goods (works, services) (except for loans granted by credit institutions and persons carrying out banking operations), the time of the taxable transaction is the date of supply of the goods (works, services).
Example 2: In July, “AA” LLC received a loan of 20,000 manats from “BB” LLC. At that time, “AA” LLC did not have any receivable from “BB” LLC. In August, “AA” LLC supplied goods (works, services) worth 10,000 manats to “BB” LLC. Despite the fact that the value of these goods (works, services) was not paid by “BB” LLC in August, pursuant to Article 166.4.2 of the Tax Code, 10,000 manats must be reflected as an inflow in the August VAT return and VAT in the amount of 1,800 manats must be calculated. If the receivable of 10,000 manats is paid by “BB” LLC in September, it will not be declared a second time, as it has already been reported in the August inflow. If a desk audit discrepancy notice regarding the inflow is received in September, a response should be provided with reference to Article 166.4.2 of the Tax Code.