Income tax budget formation. The role of income tax in the formation of the revenue side of the Russian budget
Why do you need to prepare a tax budget in an organization? We can name at least three good reasons: to further calculate the company’s financial indicators and determine the impact of the tax burden on them, to create a payment calendar, and to optimize taxes. Tax budget planning usually occurs at least a month before the start of the next year. The tax budget formation process includes the following stages.
Why do you need to prepare a tax budget in an organization? There are at least three good reasons for this:
- for further calculation of the company’s financial indicators and determining the impact of the tax burden on them;
- to generate a payment calendar;
- to optimize taxes.
The decision to form a separate tax budget, or to include estimated tax indicators in interim operating expense budgets, or to reflect them only in the final three budgets, is made taking into account the specifics of the company’s activities and size. Most often, large companies form one general tax budget.
Tax budget planning
Usually it occurs at least a month before the start of the next year. The tax budget is planned on the basis of the adopted tax policy, depreciation policy, data accounting and calculations of taxable bases within the following periods:- for annual planning - until December 1 of the year preceding the planned year;
- for quarterly planning - until the 1st day of the third month of the previous quarter;
- for monthly planning - until the 20th day of the previous month.
The tax budget formation process includes the following stages.
1st stage. Analysis of taxable objects
This analysis is in the nature of a detailed inventory of established and paid taxes, contributions and fees separately under federal and local legislation. During the analysis process, it is necessary to obtain answers to the following questions:- Is the organization included in the taxpayers for each of the established taxes?
- Are there taxable objects, and what are their characteristics? Do the characteristics of taxable objects in the law and in the specific activities of the organization completely coincide for each of the established taxes?
- Are there any deductions, what and in what amount?
- Are the organization's assets and operations subject to a specific tax?
- Are there tax benefits, and what are the conditions for applying the benefits, what needs to be done to ensure the benefits are applied?
2nd stage. Preparation of related budgets
To plan the tax budget, data is required on the following operating budgets (estimates):- sales budget;
- materials procurement budget;
- estimate of materials consumption;
- budget for procurement of works and services;
- budget for labor costs;
- budget of social payments and benefits;
- investment budget, etc.
3rd stage. Calculations by tax type
The procedure for forming a tax budget can be divided into several parts:- tax planning;
- tax payments;
- tax debt.
- planned indicators for calculating the tax base (area, number of employees, personnel costs, added value, taxable profit, etc.);
- tax legislation (procedure for payment of taxes and fees; tax rates, deadlines for accrual and payment of taxes, tax benefits);
- other data (restructuring agreements, repayment schedules for restructured debt, restructuring schedules, repayment schedules for penalties and fines, etc.)
2. Tax payments. Once tax charges have been determined, perform the calculation tax payments to draw up payment schedules with the budget and create a cash flow budget. Tax payments are calculated using the formula:
Nvypl. = Nacc. - Auplach. + Restruct. + Abud.period.
where Nvypl. — tax payments; Nacc. — taxes accrued; Auplach. — advances on taxes previously paid; Arrest. — payments in accordance with repayment schedules for restructured debt, penalties and fines; Abudperiod. — advances on taxes for future periods.
To calculate the frequency of payment of taxes and contributions, a calendar of tax payments is drawn up for the year, quarter, month. The monthly or quarterly calculation determines the deadline for paying the tax established by law. The amounts of tax payments, contributions and fees are distributed according to the deadlines for their payment, in accordance with the procedure established by law. Based on the results of planning the calendar of tax payments, a situation may arise that during the peak of payment of taxes and contributions, the amount of cash receipts will be the smallest. In this case, the financial department (department) will decide on the need to accumulate funds or borrow them and the order of payments, in accordance with the established payment deadlines.
3. Tax debt. At the final stage, it is necessary to determine the debt to the budget to draw up a forecast balance, which is calculated using the formula:
Law =Val. + Nacc. - Zrestr. - Nvypl.
where is Zkon. — balance of tax debt at the end of the period; Znach is the balance of tax debt at the beginning of the period; Zrestr - restructured debt
4th stage. Control and analysis of tax budget execution
Closing of the tax budget is carried out monthly until the 10-20th day of the next month. Monitoring the execution of the tax budget is carried out after the expiration of the planning period. Deviations in the tax budget directly depend on deviations in the tax base, that is, in the corresponding items of the operating, investment and financial budgets. The financial and economic service that compiles the tax budget can only be responsible for the correct calculation of tax amounts planned on the basis of information about the tax base provided by other departments. Since the financial and economic service cannot control the indicators on the basis of which the budget amounts of taxes are determined, it cannot be responsible for failure to fulfill the tax budget caused by deviations in these indicators.If there are deviations from the tax budget, it is advisable to identify their causes: an increase or decrease in income and expenses compared to forecasts, an unplanned acquisition of new property, changes in tax legislation, etc., i.e. an analysis of the tax budget execution is carried out. Accounting or department tax accounting(responsibility center) prepare a report in tabular form “plan - actual - deviations” by types of taxes and fees in comparison with the previous period.
In accordance with this algorithm, budgeting for each specific tax is carried out. Budgets for individual taxes can be combined into a single tax budget of the organization.
The development of the tax budget is carried out in accordance with the data of those organization budgets that contain the indicators necessary to calculate the taxable base for the corresponding tax, and regulations in the field of taxation governing the procedure for calculating and paying taxes. In this regard, most of the problems of tax budgeting are associated with the complexity of the procedure for calculating taxes provided for by law.
For example, drawing up a budget for income tax and unified social tax is extremely labor-intensive, which is why enterprises prefer to make an approximate forecast of tax payments based, for example, on the dependences of the amount of taxes paid on the organization’s performance indicators that have developed over previous periods. However, this is a drawback of the entire tax system, and improvement in this matter is only possible by changing the legislation in the direction of simplifying the procedure for calculating and paying taxes.
In addition, additional difficulties in developing tax budgets are created by the instability characteristic of the tax legislation of the Russian Federation. Organizations do not have the opportunity to reliably plan their tax payments for the future, due to possible changes in the procedure for calculating taxes.
The dependence of its indicators on the parameters of operating budgets, characteristic of the tax budget, creates difficulties in ensuring the execution of the tax budget, as well as problems associated with the ambiguity of assessing the results achieved. It is necessary to show flexibility in developing a system for monitoring the execution of the tax budget, since often the excess of actual indicators over planned indicators indicates an improvement in the situation in the organization, in contrast to a similar situation with overspending of other budgets. It is necessary to integrate tax budgeting into common system tax planning for an organization, which will allow it to focus on achieving its financial goals, optimizing tax payments.
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Budget- this is specific detailed plan collection and use of resources by economic agents for a certain period.
- a document describing the income and expenses of a particular state, usually for the year (from January 1 to December 31).
Functions of the state budget:
- Regulates the cash flows of the state, strengthens ties between the center and the constituent entities of the federation
- Legally controls government actions
- Provides information about government intentions to economic participants
- Determines the parameters of economic policy and sets the framework for possible government actions
Due to the special importance of the state budget for all spheres of economic life, its preparation, approval and implementation occur at the level of laws. At the same time, the state budget itself is the law.
Almost everyone has a plan for collecting income and using expenses. economic institute(enterprise, firm, economic sector, bank, economic and financial funds, etc.). All socio-political institutions (government organizations, political parties and so on.).
The state budget serves as a prerequisite and financial base functioning of the state and its implementation of those functions that society has authorized it to perform. With the help of the budget, issues of financial regulation are resolved at the macro level and throughout the economy. Economic significance budget is that it forms a significant part of the final demand (at the expense of its funds, most of income from the population, large volumes of products are purchased, state reserves are created). Significant financial flows pass through the budget; it directly influences the formation of important economic indicators(Fig. 27):
State budget revenues are the final stage of cash flows coming from the real sector and other major areas of financial relations, and state budget expenditures are the starting point for the movement of state resources for the needs identified by the state and society (Fig. 28).
- Volume of production
- Investments
- Real income
The state budget is the country's basic financial plan, which has the force of law.
The budget is a way of redistributing monetary income of the population, enterprises and other legal entities in the interests of financing government and other public expenditures.
State budget revenues:
- Taxes on income of legal entities and individuals
- Revenues from the real sector (income tax)
- Receipt of indirect taxes and excise taxes
- Duties and non-tax charges
- Regional and local taxes
State budget expenditures:
- Industry
- Social politics
- Agriculture
- Public Administration
- International activity
- Defense
- Law enforcement
- The science
- Healthcare
Balanced Budget- a budget in which the ratio of income and expenses is equal.
If income and expenses in the budget differ, then there is a budget deficit or surplus.
State budget funds are spent in areas and in amounts determined by federal law, laws and other regulatory legal acts of government entities. State budget expenditures can be classified according to various signs, the most important of which is financing state of their functions: economic, social, defense etc.
The following expenses are financed from the federal budget:- maintenance of government bodies;
- national defense;
- science funding;
- financing of the real sector;
- formation of state reserves;
- servicing and repayment of public debt (internal and external);
- regulation of the financial potential of state entities (federal or unitary).
- state support for industries (construction, Agriculture, transport, communications);
- ensuring law enforcement activities;
- ensuring fire safety;
- science and socio-cultural events.
The basic principle of delimiting expenses between budgets is their adequacy to the powers assigned to the corresponding level of government.
Budget expenditures are also divided according to the principle of their participation in the process of expanded reproduction.
Based on the principle of participation in the process of expanded reproduction, budget expenditures are divided into current And capital expenditures.
Current expenses- This:
- maintenance of government, management and law enforcement agencies;
- current expenditures on defense, science, social sphere;
- separate compensation expenses by economic sectors.
Capital expenditures are divided into:
- New construction;
- reconstruction of important state and municipal property.
Among priority State budget expenditures are divided into:
- social expenses;
- military spending;
- maintenance of the judicial system;
- education and healthcare.
Tyupakova Nina Nikolaevna, Litovkina Alena V.
1. Doctor of Economics, Professor of the Department of Finance
2, 2nd year master, areas of training 04/38/01 Economics
profile "Finance"
FSBEI HE "Kuban State Agrarian
University named after I.T. Trubilina
Krasnodar city
Tupakova Nina, LitovkinaAlyona
1. Doc.Ekon.Sciences, Professor of the Department of Finance
2, master 2 course, areas of training 04/38/01 Economy
profile of "Finance"
IN FGBOU "Kuban state agrarian
University named after I. T. Trubilin
Krasnodar
Annotation: The article displays the mechanism for implementing the fiscal function of taxes in the distribution of profits of business entities, using corporate income taxes, between the levels of the Russian budget system. An assessment is made of the dynamics of tax revenues in Russia as a whole and in the territory Krasnodar region. An assessment is made of the share of income tax in total tax revenues and the indicator tax burden on the economy through the system of taxation of corporate profits.
Abstract: The article shows the mechanism of implementation of the fiscal function of taxes in the profits of economic entities by means of the profit tax of the organizations, between levels of the budget system of Russia. Assessment of the dynamics of tax revenues in the whole of Russia and Krasnodar territory. The estimation of the share of profit tax in total tax revenue and total tax burden on the economy through taxation profit organizations.
Keywords: profit, taxes, budget, tax revenues, gross domestic product.
Keywords: income, taxes, budget, tax revenues, gross domestic product.
The corporate income tax occupies a special place in the tax system of Russia, therefore, the effectiveness of the measures of fiscal influence of the state on the financial and economic activities of business entities depends on the effectiveness of the mechanism for its collection. Therefore, the main task of the state is to create favorable conditions implementation economic activity with the possibility of expansion and development. In this case, mutual benefit is achieved - maximizing budget tax revenues and creating prerequisites for reducing the tax burden of business entities.
According to M.Yu. Malkin and R.V. Balakina: “The dynamics of the tax base reflects the influence of various factors:
1) changes in the scale of the legal economy, that is, the economy falling within the scope of taxation. At the same time, the growth of any economy includes both an inflationary component, caused by an increase in prices for manufactured products, and a real component, reflecting the growth of physical production volumes;
2) structural changes in the economy, in particular, changes in the share of profit in added value, as well as the dynamics of production profitability in various industries and regions;
3) the quality of tax policy and tax administration. One of the indicators of the quality of tax policy is a reasonable level of taxation. It is logical to argue that the higher the level of taxation, the less desire business entities have to pay taxes and the higher the shadow component of their activities. In addition, high levels of taxation suppress incentives for entrepreneurial activity and also reduce resources for future development, which negatively affects the growth of the tax base in the long term. At the same time, the quality of tax administration is measured by a number of indicators, which include the share of the shadow economy, which is outside the scope of taxation.”
L. Lykova, in turn, notes that: “ Russian model income tax (in the form in which it had developed by 2010) is something between a model of distribution (splitting) of tax revenues and a model of joint or parallel exploitation of the tax base. Both of these models are widely known in world practice.
Being federal (Article 13 of the Tax Code of the Russian Federation), it implies the possibility of establishing a rate according to which its amounts are subject to credit to the income of regional budgets. At the same time, the Tax Code limits the limits of rate reduction. From the point of view of establishing separate rates for the federal and regional (federal and regional components), this model can be classified as a model that involves parallel operation of the tax base. At the same time, the lack of a real opportunity to influence the process of forming this tax base brings the model used closer to the “tax revenue distribution” model.
Subject to the traditional criteria for the delimitation of tax powers in terms of income tax, the domestic model also creates certain difficulties in the implementation of the functions assigned to it, and the role of income tax in generating budget revenues of the constituent entities of the Federation differs quite significantly.
Let us assess the dynamics of corporate income tax receipts into the budget system in Russia as a whole and in the Krasnodar Territory (Figure 1 and 2).
Assessing the dynamics of tax revenues to the budget system of the Russian Federation as a whole in Russia, one can note a stable increase in revenues in 2016 by 1,779,719 thousand rubles. or 14.1% compared to 2014 and by 665,708 thousand rubles. or 4.9% compared to 2015
Figure 1, Dynamics of receipts of taxes and fees and corporate income tax in Russia as a whole, million rubles.
Figure 2. Dynamics of receipts of taxes and fees and corporate income tax in the Krasnodar Territory, million rubles.
The dynamics of income tax revenues amounted to 397,310 thousand rubles. or 16.7% compared to 2014 and by 171,304 thousand rubles. or 6.6% compared to 2015
Assessing the dynamics of tax revenues to the budget system of the Russian Federation as a whole in the Krasnodar Territory, one can note a stable increase in revenues in 2016 by 74,706 thousand rubles. or 34.2% compared to 2014 and by 35,219 thousand rubles. or 13.7% compared to 2015
The dynamics of income tax revenues amounted to 5,696 thousand rubles. or 10.1% compared to 2014 and by 8639 thousand rubles. or 19.46% compared to 2015
Regional tax revenues increased by 6,546 thousand rubles. or 26.% compared to 2014 and by 2,441 thousand rubles. or 8.4% compared to 2015
To assess the participation of income tax in budget revenues, it is necessary to assess the structure of tax revenues (Table 1).
Table 1
Structure of receipt of taxes and payments into the budget system of the Russian Federation, %
| Index | Russia | Krasnodar region | |||||
| 2014 | 2015 | 2016 | 2014 | 2015 | 2016 | ||
| Federal taxes and fees | 89,9 | 89,7 | 89,6 | 77,3 | 78,7 | 79,7 | |
| Value added tax | 18,3 | 18,9 | 19,5 | 4,5 | 16,3 | 19,6 | |
| Excise taxes | 8,0 | 7,4 | 9,0 | 13,9 | 13,4 | 12,9 | |
| Corporate income tax | 18,8 | 18,9 | 19,3 | 22,2 | 17,3 | 18,2 | |
| Personal income tax | 21,3 | 20,5 | 21,0 | 33,1 | 28,6 | 26,5 | |
| Resource payments | 23,3 | 23,7 | 20,5 | 3,3 | 2,7 | 2,2 | |
| Government duty | 0,2 | 0,3 | 0,2 | 0,5 | 0,4 | 0,4 | |
| Regional taxes | 6,0 | 6,3 | 6,4 | 11,5 | 11,3 | 10,8 | |
| Organizational property tax | 5,0 | 5,2 | 5,3 | 9,1 | 8,8 | 8,7 | |
| Transport tax | 0,9 | 1,0 | 1,1 | 2,3 | 2,3 | 2,0 | |
| Gambling tax | 0,004 | 0,004 | 0,006 | 0,1 | 0,1 | 0,1 | |
| Local taxes | 1,6 | 1,6 | 1,5 | 4,1 | 3,5 | 3,0 | |
| Land tax | 1,4 | 1,3 | 1,2 | 3,5 | 2,9 | 2,4 | |
| Property tax for individuals | 0,2 | 0,2 | 0,3 | 0,6 | 0,5 | 0,6 | |
| Special tax regimes | 2,5 | 2,5 | 2,6 | 7,1 | 6,5 | 6,6 | |
| Unified agricultural tax | 0,04 | 0,1 | 0,1 | 0,4 | 0,4 | 0,6 | |
| Simplified taxation system | 1,8 | 1,9 | 2,0 | 5,0 | 4,6 | 4,6 | |
| A single tax on imputed income | 0,6 | 0,6 | 0,5 | 1,7 | 1,5 | 1,3 | |
| Patent system | 0,0 | 0,0 | 0,1 | 0,02 | 0,0 | 0,0 | |
| Total taxes and fees | 100,0 | 100,0 | 100,0 | 100,0 | 100,0 | 100,0 | |
In the structure of tax revenues in Russia as a whole, the largest share falls on federal taxes and fees - 79.7%, of which income tax accounts for 18.2%.
The share of regional taxes is stable at 11%.
The share of local taxes is reduced from 4% in 2014 to 3% in 2016.
Specific gravity revenue from special tax regimes is 6.6%.
The largest share is occupied by revenues from personal income tax – 26.5%.
In the structure of tax revenues in the Krasnodar Territory, the largest share also falls on federal taxes and fees - 89.6%, including income tax accounting for 19.3%. The share of regional taxes is stable at 6%. The share of local taxes is within 1.5%. The share of revenues from special tax regimes is 2.5%.
The largest share is occupied by revenues from personal income tax - 21% and resource payments - 20.5%. To assess the role of income tax in the formation of the revenue side of budgets at various levels, it is necessary to assess the dynamics of the distribution of revenues of this tax by level of the budget system as a whole. Russia and the Krasnodar Territory (Table 2).
table 2
Dynamics of distribution of corporate income tax by levels of the budget system, million rubles.
| Index | 2012 | 2013 | 2014 | 2015 | 2016 |
| Russia | |||||
| Total received | 2355411 | 2071666 | 2372843 | 2598856 | 2770153 |
| incl. | 375817 | 352213 | 411316 | 491380 | 491023 |
| — regional budget | 1969541 | 1709264 | 1952469 | 2098454 | 2272500 |
| — municipal budget | 10052 | 10188 | 9058 | 9015 | 6629 |
| Krasnodar region | |||||
| Total received | 46761 | 42032 | 56322 | 44 580 | 53218 |
| incl. - federal budget | 3601 | 5746 | 5564 | 7 335 | 7 224 |
| — regional budget | 41002 | 34472 | 40 696 | 35 383 | 43 694 |
| — municipal budget | 2158 | 1814 | 2 142 | 1 862 | 2 300 |
The distribution of income tax occurs in accordance with the distribution fixed by the Tax Code of the Russian Federation: until 2017, the rate of 20% was distributed 2% of the tax base to the federal budget and 18% of the tax base to the regional budget, and since 2017, 3% of the tax base to the federal budget and 17% of the tax base to the regional budget.
Corporate income tax revenues in Russia as a whole have a stable growth rate of 7 to 10%. However, one can note a negative trend in revenues to local budgets, which is caused by the concentration of income in regional centers.
According to data from the Krasnodar Territory, an ambiguous trend is observed: in 2013 and 2015. a reduction in revenues in the aisles by 10%, and in 2014 and 2016 an increase in revenues in the aisles by 15%.
The next step is to assess the structure of the distribution of income tax by level of the budget system (Table 3).
Table 3
Structure of distribution of corporate income tax by levels of the budget system, %
| Index | 2012 | 2013 | 2014 | 2015 | 2016 |
| Russia | |||||
| Total received | 100,0 | 100,0 | 100,0 | 100,0 | 100,0 |
| incl. - federal budget | 16,0 | 17,0 | 17,3 | 18,9 | 17,7 |
| — regional budget | 83,6 | 82,5 | 82,3 | 80,7 | 82,0 |
| — municipal budget | 0,4 | 0,5 | 0,4 | 0,3 | 0,2 |
| Krasnodar region | |||||
| Total received | 100,0 | 100,0 | 100,0 | 100,0 | 100,0 |
| incl. - federal budget | 7,7 | 13,7 | 11,3 | 16,5 | 13,6 |
| — regional budget | 87,7 | 82,0 | 84,2 | 79,4 | 82,1 |
| — municipal budget | 4,6 | 4,3 | 4,4 | 4,2 | 4,3 |
Assessing the structure of the distribution of income tax by level of the budget system, one can note the predominance of the share credited to the regional budget - 80-82%. In general, in Russia the share of income tax credited to the municipal budget is quite small - less than 0.5%, and in Krasnodar region 4.5% of revenues from corporate income tax remain in the local budget.
The next step is to estimate the share of corporate income tax in total tax payments (Table 4).
Assessing the share of corporate income tax in budget tax revenues, one can note a reduction in the participation of this tax from 22% to 18-19% in Russia as a whole, and in the Krasnodar Territory from 24% to 17-18%. What is associated with the provision of additional benefits (zero rate, increasing the list of expenses taken into account for tax purposes, income exempt from taxation, etc.) both by industry and area of activity.
Table 4
Dynamics of the share of corporate income tax in tax revenues
| Index | 2012 | 2013 | 2014 | 2015 | 2016 |
| Russia | |||||
| Tax revenues, million rubles. | 10954010 | 11321617 | 12606342 | 13720353 | 14386061 |
| 2355411 | 2071666 | 2372843 | 2598856 | 2770153 | |
| share in tax revenues, % | 21,5 | 18,3 | 18,8 | 18,9 | 19,3 |
| Krasnodar region | |||||
| Tax revenues, million rubles. | 197766 | 206129 | 218123 | 257610 | 292829 |
| Corporate income tax, million rubles. | 46761 | 42032 | 56322 | 44580 | 53218 |
| share in tax revenues, % | 23,6 | 20,4 | 22,2 | 17,3 | 18,2 |
To assess the impact of corporate income taxation, we will assess the level of tax burden from income tax on the economy of Russia and the Krasnodar Territory (Table 5).
Table 5
Dynamics of the level of tax burden from income tax on the economy
| Index | 2012 | 2013 | 2014 | 2015 | 2016 |
| Russia | |||||
| GDP, million rubles | 68163883 | 73133895 | 79199658 | 83232618 | 86043649 |
| Corporate income tax, million rubles. | 2355411 | 2071666 | 2372843 | 2598856 | 2770153 |
| Share of corporate income tax in GDP, % | 3,5 | 2,8 | 3,0 | 3,1 | 3,2 |
| Share of tax revenues in GDP, % | 16,1 | 15,5 | 15,9 | 16,5 | 16,7 |
| Krasnodar region | |||||
| GRP, million rubles | 1459491 | 1662969 | 1785633 | 1946760 | 2166744 |
| Corporate income tax, million rubles. | 46761 | 42032 | 56322 | 44580 | 53218 |
| Share of corporate income tax in GRP, % | 3,2 | 2,5 | 2,7 | 2,3 | 2,5 |
| Share of tax revenues in GRP, % | 13,6 | 12,4 | 12,2 | 13,2 | 13,5 |
Assessing the share of the withdrawal of part of GDP (GRP) into the budget using corporate income tax, it can be noted that in Russia as a whole the value varies from 2.8% to 3.5%, and in the Krasnodar Territory the value is lower and varies from 2.3% up to 3.2%, which is explained by the agrarian orientation of the region.
Thus, the corporate income tax can be classified as a budget-forming tax at the regional level, as well as an instrument of regulatory influence on the economy through changes in the level of tax withdrawal (tax burden) on the part of both federal and regional authorities through changes tax rate or providing tax benefits individual industries and areas of activity.
Bibliography
1. Malkina M. Yu. Modeling the relationship between the level of tax burden and income tax revenues for regions Russian Federation/ M. Yu. Malkina, R. V. Balakin // Finance and credit. – 2013. – No. 35 (563). – pp. 21-29.2. Lykova L. Regional problems of profit taxation / L. Lykova // Federalism. ˗ 2010. ˗ No. 2. ˗ P. 85-100.
3. Tyupakova N.N. Problems and prospects for forming the revenue base of municipal budgets (on the example of the Caucasus region of the Krasnodar Territory) / N.N. Tyupakova, A.V. Botvinko
Contemporary issues financial regulation and accounting in the agro-industrial complex: materials of the I All-Russian scientific and practical conference. ˗ 2017. ˗ P. 25-28.
4. Tyupakova N.N. Tax mechanism for ensuring the balance of regional and local budgets / N.N. Tyupakova, O.F. Bocharova //
Current problems in the theory and practice of taxation: Materials of the V International Scientific and Practical Conference. Executive editor N.V. Gorshkova. – 2016. – P. 235-239.
5. Tyupakova N.N. Tax burden as an indicator of the effectiveness of the tax mechanism / N.N. Tyupakova // Proceedings of the Kuban State Agrarian University. – 2011. – No. 28. – P. 48-52.
6. Tyupakova N.N. Assessment of the tax mechanism for the distribution of added value as a direction for improving the Russian tax system / N.N. Tyupakova // Taxes and financial law. – 2013. – No. 7. – P. 141-149.
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Digest finance. – 2007. – No. 7. – P. 35-40.
Kobenko Alexander
GLAD
During the budgeting process, companies must forecast the amount of tax payments in the planned period. Without a tax budget, it is impossible to draw up a budget balance, a budget of income and expenses, or a cash flow budget. Forming a tax budget is a rather labor-intensive procedure and depends on many parameters of operating, investment and financial budgets, as well as the company’s accounting policies in the field of management and tax accounting. In this article, the author examines the principles and sequence of tax budgeting, and financial managers Russian companies share their practical experience.
The tax budget provides information on the planned assessment of taxes and tax payments, grouped by type of tax, indicating the tax base and the company's expected debt to the budget (including restructured debt).
A tax budget must be drawn up, firstly, to further calculate the company’s financial indicators and determine the impact of the tax burden on them, secondly, to form a payment calendar and, thirdly, to optimize taxes.
It is not necessary to draw up a tax budget separately from all other budgets and include forecast indicators for all taxes at once. In practice, enterprises often plan taxes attributed to costs in the corresponding expense budgets and only indirect taxes (VAT, excise taxes) are reflected in a separate budget. Sometimes companies do not create separate tax budgets at all. However, in any case, data on the accrual of taxes, planned tax payments and forecasts of debt to the budget are shown respectively in the budget of income and expenses, the cash flow budget and the forecast balance of the enterprise. The decision to form a separate tax budget, or to include estimated tax indicators in interim operating expense budgets, or to reflect them only in the final three budgets, is made taking into account the specifics of the company’s activities and size. As a rule, large companies form one general tax budget. An approximate form of such a budget is given in Table. 1.
Tax budget formation procedure
The procedure for forming a tax budget can be divided into several parts: planning the calculation of taxes, tax payments and tax debt.
Tax calculation
- planned indicators for calculating the tax base (area, number of employees, personnel costs, added value, taxable profit, etc.);
- tax legislation (procedure for paying taxes and fees - tax rates, deadlines for accrual and payment of taxes, tax benefits);
- other data (restructuring agreements, repayment schedules for restructured debt, restructuring schedules, repayment schedules for penalties and fines, etc.).
The sources for obtaining planned indicators for determining the tax base for taxes are the corresponding operating and financial budgets (see Table 2), as well as documents confirming the company’s rights to certain property (land, vehicles).
The remaining parameters for calculating taxes (tax rates, deadlines for accrual and payment of taxes, benefits) are contained in the Tax Code of the Russian Federation.
Calculation of accrued taxes in general view produced according to the following formula:
Accrued tax = (Taxable base calculated - Taxable base, non-taxable) x Tax rate - Tax benefits.
Tax payments
Once tax accruals have been determined, it is necessary to calculate tax payments in order to draw up payment schedules with the budget and create a cash flow budget.
Tax payments are calculated using the formula:
Tax payments = Accrued taxes - Tax advances previously paid + Payments in accordance with repayment schedules for restructured debt, penalties and fines + Tax advances for future periods.
Tax debt
At the final stage, it is necessary to determine the debt to the budget to draw up a forecast balance, which is calculated using the formula:
Balance of tax debt at the end of the period = Balance of tax debt at the beginning of the period + Accrued taxes - Restructured debt - Tax payments.
Features of planning individual taxes
Planning some taxes at enterprises traditionally causes certain difficulties. Let's take a closer look at the main ones.
VAT
When planning VAT, it is necessary to remember that, like other indirect taxes, this tax does not affect profit planning, since it is not “costly”, that is, it does not increase the costs of the enterprise, but is reflected only in the formation of the cash flow budget and forecast balance.
To calculate the planned value of VAT, the following indicators are determined.
VAT on acquired property (work, services) is calculated as the difference between the “input” VAT on all acquired property (work, services) and the amount of “input” VAT attributable to the paid property (work, services). This indicator is used in the balance sheet when calculating the balance sheet item “VAT on assets purchased but not paid for.”
VAT on settlements with buyers of goods and services is defined as the difference between the amount of VAT accrued on products sold on the domestic market (as well as in the Republic of Belarus) and the amount of VAT received on revenue from buyers of products. This indicator is used in the balance sheet when calculating the balance sheet item “VAT on shipped but not paid for products and other assets” if the enterprise uses the “on payment” accounting policy for calculating VAT.
VAT debt is determined using the following values:
- VAT amounts on revenue - if the company uses the “shipment” accounting policy, then all revenue for the planning period and the amount of advance payments from customers are taken; if the accounting policy is “on payment”, then VAT is calculated on the amounts that the company receives from customers either for products already shipped or in the form of advance payments;
- the amount of VAT on the proceeds from the sale of goods (work, services), payment for which was made in advance (if the “shipment” accounting policy is applied);
- the amount of VAT in payments to suppliers of goods and services - the operation of calculating the refundable amount of tax upon payment (without taking into account advance payments).
VAT debt to the budget is defined as the sum of the opening balance and VAT on revenue in point 1 minus the VAT amounts in points 2 and 3. The total amount is reflected in the balance sheet under the item “Settlements with the budget” or “VAT recoverable”.
- Personal experience
Vadim Shtrakin
In order to be able to draw up a budget for VAT (at rates of 10 and 18%), the supply department provides monthly information on planned purchases of basic raw materials, basic and auxiliary materials, replacement equipment and the timing of their payment to the financial and economic service. In addition, such a large enterprise as ours constantly has a need to purchase various outsourcing works and services - consulting, repairs and others. Departments that need these works and services plan them independently and submit applications to the financial and economic service of the plant indicating their contractual cost. Next, the financial department plans payment for these works for a certain ten-day period of the month, after which data on the work and their payment goes to the tax department specialists responsible for calculating the VAT planned for payment.
For VAT purposes, we use a “on payment” accounting policy. Data on sales and timing of receipt of revenue to the enterprise is provided by the sales department, if we are talking about domestic sales, and the department of foreign economic activity, in terms of export sales. Calculation of the plan for export VAT ( zero rate) has a slightly different algorithm, but is carried out within the framework of a single budget calculation for this tax.
It is worth noting that enterprises will experience difficulties in planning this tax after the introduction of the practice of special VAT accounts in banks.
Svetlana Zhigulina
Our company determines the VAT accrual date in accordance with the “on payment” accounting policy. However, we plan VAT amounts using two methods.
To prepare a cash flow budget, VAT is calculated in the usual manner in accordance with the Tax Code of the Russian Federation. In other words, the tax is accrued at the time of receipt of money from buyers, and the “input” VAT is accepted for offset at the time of payment for purchased goods (work, services).
At the same time, for management purposes, we also determine the amount of VAT “on accrual basis”. In other words, the amount of VAT is calculated based on the sale of goods in the planning period and is reduced by the amount of “input” VAT on those expenses incurred in the planning period. Moreover, revenue and expenses are taken into account in full, and not just their paid part. The result is the VAT amount calculated based on the added value that the company created in the planning period. This tax amount may not be the same as the VAT reflected in the cash flow budget. However, this amount shows the actual VAT that relates to the planning period and which the company will have to pay at some point, although it may have a deferment in its payment during the planning period. For example, in the planning period, a company may not receive payment for shipped goods, then there will be no obligation to pay VAT, but we are already taking into account that payment may be received in another period and that VAT will still have to be paid.
Income tax
To calculate income tax, the “taxable profit” indicator is calculated. Most enterprises form budgets based on accounting policies for the purposes of management accounting and determine the so-called management profit. In order to calculate taxable profit, it is necessary to make adjustments, which are calculated based on the differences between the accounting policies of management and tax accounting, for example, differences in the procedure for calculating depreciation, accounting for standard expenses, etc. Of course, it is impossible to accurately determine the amount of tax in advance, so we take only those adjustments that are most significant. The adjusted profit is the planned value of taxable profit, which is then used to determine the forecast amount of income tax due for payment to the budget.
- Personal experience
Nikolay Frolov
To obtain the predicted value of taxable profit, we adjust the profit received in the budget of expenses and income for significant items of expenses that are not taken into account for tax purposes, for example, for amounts of material assistance, expenses for medical service personnel, travel expenses beyond the norm and others. The resulting value reflects the approximate tax base for income tax, which determines the planned tax amount. This calculation is not very accurate, since profits may not be adjusted for some minor expenses, but for management purposes it is quite acceptable.
When planning income taxes, it is also advisable to determine deferred taxes 1. Reflection of deferred taxes in the budget of income and expenses allows us to identify those amounts of income tax that the company will have to pay in the future on income and expenses already received and recognized in management accounting. When planning deferred taxes in the forecast balance, the items “Deferred payments for income tax” in the “Liabilities” section and “Deferred tax claims for income tax” in the “Assets” section are budgeted.
- Personal experience
Larisa Shapovalova
The main activities of our company are the provision of services for asset management of mutual funds investment funds, trust management of assets of legal entities and individuals, as well as the purchase and sale of securities.
When drawing up budgets, we accrue deferred taxes only for the most significant difference - for the additional valuation of quoted securities to market value. The fact is that in the budget of income and expenses this revaluation is shown monthly and is determined on the basis of a forecast of the state of the securities market provided by the asset management department. However, in tax accounting, the revaluation amount will appear as income or expense only at the time of sale of securities. Therefore, based on the plan for the availability of securities at the end of the planned year, an increase in their value to market value is predicted and the amount of deferred tax for the year is determined. Deferred tax shows the amount of tax that we will have to pay upon sale securities. We also have other temporary differences, but most of them come and go within one year, so it is not practical to plan for them.
UST
To calculate the unified social tax, personnel costs, including wages, bonuses and other payments, are used as the taxable base. Enterprises that use a regressive scale of UST rates need to plan taxes for each employee, which is quite labor-intensive. Therefore, it is recommended to calculate the amount of UST based on the average monthly salary and accumulated average monthly salary, broken down by personnel category. This calculation is not absolutely reliable, but is quite close to the real one due to the application of regressive rates to various categories of personnel.
- Personal experience
Irina Gridneva, financial director of Louis Dreyfus Vostok (Moscow)
To take into account the impact of regression on the amount of unified social tax when drawing up budgets, we calculate the tax based on average rate UST for the previous period.
Nikolay Frolov
When planning the unified social tax, we take into account the savings obtained through the use of regression at the end of the year. We calculate these savings on a monthly basis, since wage growth, which allows us to use regression, occurs mainly in the second half of the year. To calculate savings, the corresponding data for the previous year is taken. If, for example, this year it is planned to increase the wage fund by 30% compared to last year, then we believe that savings on UST will increase by approximately 30% compared to last year. We do not make personal calculations for each employee due to the high labor intensity.
Larisa Shapovalova
Since we budget labor costs on an accrual basis, the UST amounts are also planned on an accrual basis and may not coincide with the UST, which must be transferred to the budget at the end of a particular month. For example, in our company, at the end of the year, all employees are paid bonuses. However, these bonuses are awarded monthly in the amount of 1/12 of the total amount in order to take into account these expenses evenly and not show a sharp increase in the wage fund at the end of the year. We draw up budgets broken down by month, and the budgeted amount of labor costs for each month is formed taking into account part of the annual bonus and the amount of UST attributable to it, which is calculated at rates that take into account regression at the end of the year. At the same time, you will need to pay UST on annual bonuses only at the end of the current year - after bonuses are paid to employees. However, this circumstance is taken into account when drawing up a cash flow budget.
Place of the tax budget in the budget model of company 2
In complex holding structures, the tax budget is formed both for the company as a whole and for responsibility centers. The full tax budget can be formed in profit centers and investment centers, which are independent structural units of the company. For divisions that are cost centers, the following types of taxes can be calculated: unified social tax, property tax, transport tax and some others (depending on the specifics of the enterprise and the specific division). Most taxes can only be calculated for the company as a whole: VAT, land tax, dividend tax, etc.
Responsible for the formation of the tax budget is the financial and economic service (department budget planning, economic planning department, tax payment planning department), and for the calculation of individual parameters (for example, the tax base) - the corresponding divisions of the enterprise, depending on the distribution of responsibility for budget indicators.
Tax planning is possible when operating budgets (except for expenses and income) and an investment budget have been drawn up. After determining “costly” taxes and income taxes, a budget of income and expenses is formed and determined net profit. Then, after drawing up a schedule of settlements with suppliers and buyers and forming a cash flow budget based on it, VAT payments are calculated. However, it cannot be stated unequivocally that the final version of the cash flow budget is prepared before the VAT budget is drawn up. Information on VAT payments that should be transferred to the budget may require a revision of the cash flow budget due to the need for additional lending. Company management may also decide to use available cash remaining at the end of the period to pay suppliers in order to increase the amount of VAT deductions. Thus, after VAT is calculated, the cash flow budget may be adjusted, and therefore the original VAT calculation may also change (see figure). After tax budgets are drawn up, a forecast balance is formed.
The tax budget is drawn up with the same frequency and within the same time frame as the company’s main budgets: budget of income and expenses, cash flow budget, forecast balance. Typically, annual or quarterly budgets have a monthly breakdown and all data for each month is shown separately. Since many taxes are reported or tax period is a month, then monthly calculation of planned tax payments will be the best option.
Control of tax budget execution
Monitoring the execution of the tax budget is carried out after the expiration of the planning period. Deviations in the tax budget directly depend on deviations in the tax base, that is, in the corresponding items of the operating, investment and financial budgets. The financial and economic service that compiles the tax budget can only be responsible for the correct calculation of tax amounts planned on the basis of information about the tax base provided by other departments. Since the FES cannot control the indicators on the basis of which the budget amounts of taxes are determined, it cannot be responsible for the failure to fulfill the tax budget caused by deviations in these indicators. If there are deviations from the tax budget, it is advisable to identify their causes: an increase or decrease in income and expenses compared to forecasts, an unplanned acquisition of new property, changes in tax legislation, etc.
- Personal experience
Larisa Shapovalova
An increase in tax payments compared to the planned ones does not at all mean that the company’s financial situation has worsened and it is necessary to punish those responsible. It is important to analyze the reasons for increasing the amounts of a particular tax. With property and advertising taxes, everything is simple - their values directly depend on changes in the composition of the enterprise’s property and advertising costs. Accordingly, if marketing service did not meet the budget, exceeding advertising costs, the amount of advertising tax will change. However, the increase in these costs may be quite justified. For example, sometimes a budget drawn up at the end of the previous year is adjusted during the year if there is a sharp change in the work of the company as a whole and additional costs are required for a new project.
An excess of the actual amount of income tax over the planned amount may indicate an increase in profits and an increase in the well-being of the company. In order to identify the reason for the deviation of income tax, the entire budget of income and expenses and all deviations from them are analyzed. As a rule, an objective reason for such deviations is identified.
In conclusion, we note that the preparation of a tax budget for a specific enterprise should be carried out taking into account its capabilities and the objective need for relevant information. Otherwise, the costs of tax budgeting will exceed the benefits obtained from it.
