TAXATION OF NATURAL PERSONS

Individuals owning commercial real estate to pay their property tax for individuals, and if these objects are sold or leases it, to pay such income tax on individual income

Often, commercial real estate owned by an individual. In this case, commercial property is the subject of taxation of personal property, the tax rate determines the act of a representative body of local self-government at the location of immovable property, depending on the total inventory cost, but in general on Russia tax rates are set by the Tax Code of Russia Federation (hereinafter - the Tax Code) limits (Table 1). Tax on personal property payable in respect of commercial real estate and in the case where a person is an individual entrepreneur, in this case, if the certificate of individual entrepreneurs such kind of activities, such as renting your own property, does not mean he is not entitled to conclude contracts for delivery of property belonging to him in rent on behalf of an individual entrepreneur. In terms of tax law, individuals involved in leasing activities, should not receive the status of an individual entrepreneur, as the revenue derived by individuals from the rental or lease of movable or immovable property, named in Art. 208 Tax Code as a separate type of income that are subject to taxation on income of individuals.

Table 1

The cost of the property tax rate
Up to 300 thousand rubles to 0.1 percent
From 300 thousand rubles to 500 rubles from 0,1 to 0,3 per cent
Over 500 thousand rubles from 0,3 to 2,0 per cent

If the tax on personal property concerns statics civilian traffic, the tax on personal income (PIT) refers to its dynamics. In our case it is charged with the proceeds from the sale of commercial real estate or on their rent.

According to Chap. 23 Tax Code, income received from citizens are obliged to pay tax personal income tax in the general case, the rate of 13 percent. It is important to note that Art. 207 Tax Code relates to the taxpayers of this tax individuals who are tax residents of Russia, as well as individuals receiving income from sources in Russia, but are not tax residents of Russia and in accordance with the provisions of Art. 224 Tax Code, the tax rate is set at 30 per cent on all income earned by individuals who are not tax residents of Russia.

Revenues from the sale of property, including commercial real estate, and to income from the rental of such facilities in the lease included in the tax base, personal income tax. So according to Art. 210. Tax Code, when determining the tax base takes into account all income tax received by him, either in cash or in kind, or the right to dispose of that, he arose, as well as income in the form of material benefit, determined in accordance with Article 212 of this Code. If the income of the taxpayer on his orders, court orders or other authorities to make any withholding, such deductions do not reduce the tax base. At the same time under the provisions of paragraph 1 of paragraph 18.1 of Article 217 of the Tax Code are exempt from taxation on income received as a donation from private individuals, except in the case of gift of immovable property, vehicles, stocks, shares and units. If the donor acts as a natural person, not a member of the family and (or) a close relative of the donee of a natural person in accordance with the Family Code, is subject to the provisions of paragraph 1 of Article 52 and paragraph 2 of Article 229 of the Code of the donee of an individual self-declared income received as a donation. In order to determine the tax base used by the taxpayer negotiated donate the cost of real estate. In this case the tax authorities are entitled to the provisions of paragraphs 2 - 11 Article 40 of the Code to verify the validity of the contract value of such property 1.

Individual entrepreneurs in the calculation of tax on personal income may reduce the amount of income from which tax is charged on the amount of documented expenses incurred in connection with business activities, including those related to and used commercial real estate

It should be borne in mind that in accordance with paragraphs. 1, No. 1, Art. 220 TC RF citizens, selling an apartment, house, cottage, garden house, land, are eligible for property tax deduction. If these properties were in their possession at least five years (during the sale after January 1, 2005 - less than three years), the property is granted a deduction for the amount received from the sale of a residence, but not to exceed one million rubles. If the housing was owned by at least five years (during the sale after January 1, 2005 - less than three years), the property is granted a deduction in the amount received from the sale without any restrictions. However, this provision of the property tax deduction applies only to residential premises and can not be applied to commercial real estate. But according to Art. 221 Tax Code, the amount of tax on personal property tax paid by taxpayers - individual entrepreneurs are taken to the deductible in the event that it is property that is subject to taxation in accordance with the articles of Chapter "A tax on personal property (except for houses, apartments, villas and garages), is directly used for business. It should be noted that sometimes the tax authorities are trying to recover the arrears in cases when employers apply these deductions, but experience shows that arbitration courts refused to meet the claims of tax authorities to collect back taxes on personal income, if entrepreneurs confirm incurred in the reporting tax period costs directly associated with the recovery of income 2.

Regardless of the possibility of obtaining a deduction, compulsory until 30 April of the year following the year in which income was received from the sale or rental of commercial real estate must be submitted to the declaration. If the deadline for submission of the declaration is omitted, will be made of a fine in accordance with Art. 119 Tax Code.

TAXATION ORGANIZATIONS

Commercial real estate owned legal person is subject to taxation on property of organizations

In that case, if the property is acquired by a legal entity, it becomes subject to taxation on property of organizations, the rate of the tax law defines the appropriate representative body of the RF subject in which it has real estate, but in general, Russia rates can not exceed 2.2 per cent. Given the fact that most of the budgets of the Federation and municipal entities are scarce, their representative bodies, seeking to establish rates to the maximum extent. According to Art. 373 Tax Code, the taxpayers of this tax is recognized as Russia's organizations, and foreign organizations operating in Russia through permanent and (or) owning real estate in the territory of Russia, the RF continental shelf and exclusive economic zone of Russia.

When buying and selling commercial real estate transactions are charged with value added tax and profit tax

In that case, if there is a sale and purchase of commercial real estate there is the obligation to pay value added tax (VAT). Because art. 146 Tax Code provides as an object of taxation for the tax on transactions of goods (works, services) in the territory of Russia, and the sale of goods or services to an organization or individual entrepreneur in view of the provisions of Art. 39 Tax Code recognizes in particular the transfer on a reimbursable basis of ownership of the goods. Accordingly, the purchase and sale of commercial real estate is recognized and the implementation is subject to taxation.

The amount of tax when determining the tax base is calculated as the corresponding tax rate percentage of the tax base, and the separate account - the sum of the tax resulting from the addition of taxes, calculated separately as appropriate tax rates, the percentages of the respective tax bases. This tax amount is calculated as the total amount of tax, calculated in accordance with Art. 166 Tax Code reduced by the amount of tax deductions, they are subject to the tax amount filed by the taxpayer and paid by the acquisition of goods (works, services) under Art. 171 Tax Code).

Obligation to pay VAT as follows: the seller premises puts the amount of VAT to the buyer, the buyer pays it to the seller, and he enrolls her in the budget. The tax rate is 18 per cent (Section 3, Article. 164 Tax Code) and the sale of non-residential premises, the organization is obliged to expose the seller to the buyer an invoice, which added to the value of the premises indicates the amount of 18 per cent of the price of the premises as VAT. Seller reduces received from the buyer VAT on the amount of VAT, which he in turn paid as the buyer (the so-called. Tax deduction), and sends the difference in the budget.

In addition, the sale of commercial real estate legal person - the seller takes into account the income from the transaction in the calculation of income tax. According to Art. 247 Tax Code, subject to tax on corporate profit tax is the profit received by the taxpayer. In this case profits are recognized income, reduced by the amount of costs incurred. So according to claims 1, paragraph 1, Art. 268 Tax Code, the profits from the sale of the premises, the seller may reduce the residual value of the depreciable property, and in view of the provisions of paragraph 3 of Art. 268 Tax Code, if the residual value of non-residential premises, taking into account costs associated with its implementation, exceed the proceeds from its implementation, the difference between these values is recognized loss of the taxpayer. The resulting loss is included in other expenses of the taxpayer in equal installments during the period defined as the difference between the useful life of these assets and the actual period of its operation until the implementation. The tax rate on the sale of real estate is 24 percent. Should also be borne in mind that the amounts paid under a contract of sale and purchase of commercial real estate are recognized as expenses of the buyer (Section 1, Art. 253 Tax Code). The tax treatment of income from the sale of the building recognizes revenue from the sale (Section 1, Art. 249 Tax Code), which is excluded from tax (Section 1, Art. 248 Tax Code). Because the seller's tax records as part of the building there were depreciable property, the revenue earned from the sale reduced by the residual value of the building (podp. 1, No. 1, Art. 268 Tax Code), determined in accordance with Clause 1, Article. 257 Tax Code. In accordance with Clause 2, Article. Tax Code 259 depreciation on the facility is terminated from the 1 st of the month following the month when there was a complete write-off the cost of such an object, or when the object is eliminated from the depreciable property of the taxpayer for any reason. One of the essential features necessary for recognition of depreciable property, the taxpayer is to use it to extract income (Section 1, Art. 256 Tax Code). After the transfer of the building to the buyer on the act of acceptance-transmission of the possibility of using the building to generate revenue from the seller ceases, and, consequently, from that time the building ceases to meet the grounds of depreciable property from the seller. Therefore, the seller of real estate depreciation should cease from the 1 st of the month following the month when there was a transfer of immovable property to the buyer on the act of reception and transmission 3.

It should be mentioned, and on foreign organizations are not operating through a permanent establishment in Russia and receiving income from sources in Russia. In accordance with the provisions of paragraphs. 6 § 1 of Art. 309 Tax Code, income from sale of immovable property situated in the territory of Russia, which are not related to business activities of such organizations in Russia, belong to the income of foreign organizations from sources in Russia and are subject to tax withheld at the source of income (ie the buyer apartment, regardless of his nationality). However, according to paras. 1, No. 2, Art. tax rate on income of foreign organizations not associated with operating in Russia through a permanent establishment shall be fixed at 20 per cent.

When renting a commercial real estate in order to calculate a single tax on imputed activities of the entrepreneur should be allocated in the contract that area, which is used directly for trade

Talking about the lease of commercial real estate, it should be noted that in determining a single tax on imputed activities (UTII) should be taken into account only the area of sales area. The law clearly listed facilities, the area which shall not be accepted: household, administrative buildings, as well as facilities for receiving, storing goods and preparing them for sale.

However, in practice the tax authorities agree UTII rely on such rules only for those companies that have sales area specified in the lease agreement separately from the total area of the premises.

The entrepreneur is obliged to specify in the lease the entire area of the leased premises, but it will highlight that area, which is used directly for trade.

In case of transfer of ownership of commercial real estate as a result of introduction of non-residential premises as a contribution to a partnership agreement or as a contribution to the Company and the subsequent realignment of property upon dissolution of the contract or the liquidation of a company not nuplachivaetsya any value added tax or income tax

In addition to transfer ownership of commercial real estate can also occur as a result of introduction of non-residential premises as a contribution to a partnership agreement or as a contribution to the LLC.

If individuals enter into a contract of simple partnership, under which one person makes a simple partnership of commercial real estate and other - funds, then the contract of simple partnership is dissolved, the property can remain in this other person who made the money initially, but the person who originally originator object will receive the compensation in the amount of his initial assessment in mind that according to Clause 1, Article. 1043 Civil Code, made by fellow property which they possessed the right of ownership, recognizing their common property.

It is important to note that in accordance with Clause 3, Article. 39 Tax Code, contributions under a contract of simple partnership (contract on joint activity), shares in mutual funds of cooperatives and the transfer of property within the initial deposit party contract of simple partnership (contract on joint activity) or his successor in the event of partition of his share of the property being common ownership parties to the treaty, or partition of such property are not recognized by the sale of goods or services. Therefore, in accordance with Clause 3.3.4. Guidance on the application of Chapter 21 "Tax on Value Added Tax Code approved by Order of the MNF from Russia on Dec. 20, 2000 BG-3-03/447, is not subject to VAT return value of the property members of society, previously made by them as a contribution to charter capital . When sending a party to this society other property, it is not owned, value the difference is taxed at the generally established procedure. Since the cash equivalent equal to the price made by the property, there is no difference between valued and, therefore, the obligation to pay VAT. Thus, VAT is payable when making the property as a contribution to a simple partnership and the subsequent withdrawal from it.

On the other hand, in accordance with paragraphs. 5 para 1 of Art. 251 Tax Code, when determining the tax base does not include income received from assets that have been obtained within the initial contribution of a party to the contract of simple partnership (contract on joint activity), or its successor in the event the allocation of its share of the property in joint ownership agreement participants or section of the property. This expenditure is not recognized as expenses in the form of contribution to the charter (share) capital contribution to a simple partnership (paragraph 3 of Art. 270 Tax Code). That is, the total profit organizations can not reduce the amount of contributions to a simple partnership. And that means the property obtained at the output of a general partnership is not recognized as income and profit tax exempt.

The situation is similar with the introduction of non-residential premises as a contribution to the LLC when individuals establish limited liability company with distribution to each participant 50% of the shares of authorized capital. One is making a contribution of non-residential premises, and the other - money. In consequence of the person originator as a contribution to commercial real estate, sells it to another person a share in the authorized capital created LLC. The buyer becomes the sole member LLC created, which is taken into account the balance of this property.

Again in accordance with Clause 3, Article. 39 Tax Code, the transfer of property, if such transfer is investment (in particular, contributions to the charter (share) capital of business companies and partnerships) as well as transmission equipment within the initial contribution of party economic entity or partnership (its successor or heir) on exit (disposal) of a business entity or partnership, as well as the distribution of assets of a liquidated business entity or partnership between the participants do not recognize the sale of goods or services. This means that when a property as a contribution to the LLC created and then exit, the payment is not subject to VAT.

Furthermore, in accordance with paragraphs. 3, No. 1 Art. 251 Tax Code, in the income does not include property which is received in the form of contributions (deposits) in charter (reserve) capital (fund) of the organization, including revenue from the excess of the cost of placement of shares (shares) on their nominal value (original size) and according to paragraphs. 5 para 1 of Art. 251 Tax Code, income is not recognized and the property, which is received within the initial contribution of a party to a business entity or partnership (or its successor successor) on exit (disposal) of a business entity or partnership or in the distribution of assets of a liquidated business entity or partnership between the participants . We created Ltd. does not arise obligation to pay income taxes due to the fact that the object of commercial real estate does not recognize income, as well as received as a contribution to charter capital. The original owner of the object does not receive income and, therefore, should not be paid from the transaction tax on profits.