The terms of the lease agreement determine the procedure for accounting for the security deposit in the expenses of the tenant and the income of the lessor, applying the simplified taxation system.
In practice, the situation is quite common when, according to the lease agreement, the lessor receives a security deposit from the tenant to ensure the fulfillment of obligations (clause 1, article 329, article 381.1 of the Civil Code of the Russian Federation). Consider the nuances of accounting and tax accounting security deposit from the tenant and the landlord when they apply the simplified tax system.
Accounting for a security deposit with a lessor
Tax accounting.
If the agreement stipulates the condition for the return of the security deposit after the expiration of the lease term, then the lessor does not receive income taken into account when calculating the base for the "simplified" tax. Such a conclusion can be drawn from the provisions of the Tax Code (subclause 2, clause 1, article 251, clause 1.1, article 346.15 of the Tax Code of the Russian Federation).
If the contract contains a condition on the offset of the security deposit against the rent, then the tenant and the landlord will have to draw up an act on its offset. In this case, the lessor should reflect the amount of the security deposit as income in the book of income and expenses as of the date of drawing up the act (letters of the Ministry of Finance of Russia dated 12/17/2015 No. /2/36071, dated 10/28/2013 No. 03-11-06/2/45451, dated 04/08/2013 No. 03-11-06/2/11372, Federal Tax Service of Russia dated 12/30/2014 No. GD-4-3/27235@ , Federal Tax Service of Russia for Moscow dated 02.09.2010 No. 20-14/2/092618@).
Accounting.
Order accounting Let's look at an example of a security deposit from a landlord.
Example
The company on the simplified tax system entered into lease agreements with tenant 1 and tenant 2. From the first, she received a security deposit in the amount of 10,000 rubles, from the second - 15,000 rubles. At the same time, the agreement with tenant 1 stipulates that at the end of its validity period the security deposit will be returned, and according to the agreement with tenant 2, the security deposit will later be offset against the rent.
Settlements with tenant 1:
- 10,000 rubles. - received a security deposit from lessee 1 to secure obligations under the lease agreement;
- 10,000 rubles. - the security deposit was returned at the end of the term of the lease agreement.Settlements with tenant 2:
DEBIT 51 CREDIT 76 sub-account "Security deposit"
- 15,000 rubles. - received a security deposit from lessee 2 to secure obligations under the lease agreement;DEBIT 76 subaccount "Security deposit" CREDIT 76 subaccount "Rent"
- 15,000 rubles. - in accordance with the act on the offset of the previously transferred security deposit, the security deposit was offset against the rent as of the date of the act;DEBIT 76 sub-account "Rent" CREDIT 91 sub-account "Other income"
- 15,000 rubles. - the received security deposit is reflected in the rent as income in accordance with the act as of the date of its preparation.
Security deposit in the tenant's account
Tax accounting.
The issue of tax accounting for a security deposit is relevant for a tenant who applies "income reduced by the amount of expenses."
The situation is almost the same as discussed above. If there is a condition for the return of the security deposit at the end of the contract, it cannot be taken into account by the tenant when calculating the base for the "simplified" tax due to the fact that it is not named in the list of expenses given in tax code(clause 1 of article 346.16 of the Tax Code of the Russian Federation).
At the same time, we note that the tenant should not take this amount into account as income at the time of return (letter of the Ministry of Finance of Russia dated 12.12.2008 No. 03-11-04 / 2/195).
If, according to the terms of the agreement between the lessee and the lessor, the security deposit is subsequently taken into account as part of the rent for any period, then it will be reflected in the book of expenses and income as an expense related to the rent for this period (subclause 4 paragraph 1 of article 346.16 of the Tax Code of the Russian Federation, letters of the Ministry of Finance of Russia dated 03.04.2015 No. 03-11-11/18801, dated 06.28.2011 No. 03-11-06/2/99).
Accounting a security deposit from the tenant will also be considered further with an example.
Example
According to the lease agreements, the company on the simplified tax system transfers security payments to lessor 1 in the amount of 10,000 rubles, to lessor 2 - 15,000 rubles.
At the same time, the agreement with the lessor 1 states that at the end of its validity period, the security deposit will be returned to the company. And under the agreement with the landlord 2, the security deposit will later be set off against the rent.Settlements with lessor 1:
DEBIT 76 sub-account "Security deposit" CREDIT 51
- 10,000 rubles. - a security deposit was made to secure obligations under the lease agreement;DEBIT 51 CREDIT 76 sub-account "Security deposit"
- 10,000 rubles. - the security deposit was returned at the end of the lease agreement.Settlements with lessor 2:
DEBIT 76 sub-account "Security deposit" CREDIT 51
- 15,000 rubles. - a security deposit was made to secure obligations under the lease agreement;DEBIT 76 subaccount "Rent" CREDIT 76 subaccount "Security payment"
- 15,000 rubles. - in accordance with the act on the offset of the previously transferred security deposit, it was offset against the rent as of the date of the act;DEBIT 44 CREDIT 76 "Rent"
- 15,000 rubles. - accounting for the security deposit as part of the rent as an expense as of the date of drawing up the act of offsetting the previously transferred security deposit.
The current legislation does not provide for the possibility of transferring money as collateral - but there is an independent operation called a "security deposit". As a rule, when concluding a lease agreement, payment for the use of the property and a certain amount is stipulated, designed to protect the landlord from possible losses. In the agreement, such a payment may be called a "pledge", "security deposit", "guarantee fee". From a legal point of view, this is nothing more than financial security for the obligations of the party to the contract - the tenant. The official name of this payment is a security deposit. In this article, we talk about what its purpose is, how to use it, and whether the payment is taxed. We will also consider the security deposit of the posting in accounting using an example and find out what is the opinion of the Ministry of Finance of Russia on this issue.
Definition and purpose of the security deposit
Important! A security deposit is not a payment similar to a deposit or an advance payment.
Security deposit - a certain amount of money that is paid by one of the parties to the contract in favor of the other party as a penalty or a guarantee of the absence of probable losses in case of violation of the terms of the contract. This is not the same as a deposit and an advance. subject of pledge cash cannot act, if only because foreclosure on the pledged property involves its sale, and the money is not subject to sale.
The deposit is paid to the second party of the agreement on account of the payments due from the first party, which are mentioned in the contract between them. An advance, in turn, differs from a deposit in that:
- If the provision of the agreement is violated by the party to the agreement, which paid the other party a deposit, then this amount will not be returned to the payer.
- If the agreement is violated through the fault of one of the parties to the agreement, which received a deposit from the other party, the culprit will return the deposit and pay the same amount as a penalty from above.
The need to tax the amount of the security deposit
Important! If the text of the agreement between the parties states that the amount of the security deposit can be used by the recipient in the settlement of the main obligation upon termination of the agreement, the security deposit is considered as an advance payment. Accordingly, there is a need payment of personal income tax and VAT (and the company generates income on the simplified tax system).
If the agreement does not provide for the settlement of the main obligation upon termination of the agreement by means of a security deposit, then this payment cannot be regarded as the income of the recipient of the funds. The security deposit is not income until some event occurs, upon the occurrence of which the obligations will be secured by the amount of the security deposit. If nothing like this happened, the money is returned to the payer. It turns out that the party to the contract that received the payment is its temporary holder, having no commercial benefit.
Features of using a security deposit
When considering the use of such an instrument as a security deposit, it is necessary to remember the following points related to its payment:
- If the circumstances stipulated by the agreement between the parties have occurred, the previously transferred security deposit must be counted towards the fulfillment of the obligation of the party.
- If any circumstance stipulated and provided for in the agreement did not occur in due time (or the secured circumstance was terminated), the party that received the security payment in due time must return the funds to the payer (unless otherwise stipulated by the agreement).
- The contract between the parties may initially provide for the obligation of one of the participants to additionally transfer the security deposit to the partner in the event that a specified circumstance occurs. For example, such a move is appropriate if the security deposit was spent to compensate for losses or pay a penalty.
- In fact, the party to the contract to which the security deposit was transferred receives an interest-free loan. This happens because the amount of this payment does not accrue interest for the use of money (unless such a clause is specified in the agreement).
Security deposit of posting in accounting (for example)
Important! When a security deposit is transferred, the entries must be reflected in a separate sub-account, on which settlements are made for the main obligation stipulated by the contract.
A lease agreement was signed for the workshop. Behind untimely transfer the owner of the rent from the tenant is charged a penalty interest at a rate of 30% per annum. A landlord who has received a security deposit has the right to use it to pay interest on the late rent. VAT is not payable on the amount of the security deposit. The shop owner's accountant will make the following entries:
DEBIT | CREDIT | A comment |
| 51 | 60 s/s "Security payment" | A security deposit has been credited (excluding VAT) |
| 60 s/s "Rent" | The rent is credited (the terms stipulated in the agreement are violated). Including VAT. | |
| 91 | Interest accrued for untimely application rent (30% per annum). VAT is not charged. |
|
60 s/s "Security payment" | 76 s / sch. "Claim Settlements" | The security deposit was debited to repay the claim for late payment of the rent. |
Examples of using a security deposit
Example 1 - using a security deposit to improve payment discipline
A lease was concluded for a warehouse, according to which, for the late transfer of the lease payment, interest is charged on the amount of the payment at a rate of 30% per annum. It turns out that 2 monetary obligations a - payment for the use of the rented premises and interest for late payment of funds to the lessor's account (fine). That is, at the expense of the security deposit, the warehouse owner has the right to repay interest (by notification), without affecting the main debt. This clause of the lease agreement increases the payment discipline of the warehouse tenant.
Example 2 - using a security deposit for "loaning" at the expense of the tenant
The parties entered into a lease vehicle, the provisions of which provide for the transfer of a security deposit in the amount of 50% market value of this vehicle. The purpose of making the payment by the lessee is to insure the lessor against possible losses in the event of the lessee getting into an accident and damaging the car. The essence of this payment is interest-free lending to the owner of the vehicle, since the security deposit is not income, and, accordingly, is not subject to income tax individuals(personal income tax).
In practice, for a long time, participants in transactions have been using such a tool as a security deposit. The Civil Code of the Russian Federation, however, until 2015 did not contain rules regulating its application. There are now official regulations governing its use. At the same time, the norms define its specificity somewhat differently than it was understood earlier.
Security deposit: civil law
There are two rules in the Code relating to the use of this tool. The legislation provides its definition and indicates key features. A security deposit is a deposit by one of the participants in a relationship in favor of another of a certain amount. Due to it, the fulfillment by the party of the terms of the transaction is guaranteed. The payment provides, among other things, the obligation to compensate for losses or pay a penalty in case of violation of the contract. This provision is reinforced by Art. 381.1 (clause 1) of the Code.
Purpose
Security deposit as a method is used in a variety of cases. For example, the rules on its application apply to transactions in which transferable bonds, shares, other securities and objects that have generic characteristics. The security deposit is provided in the framework of conditional transactions. For example, upon the occurrence of specified circumstances, it is included in the repayment of debt.
Specificity
It is necessary to clearly understand the properties that a security deposit has. The Civil Code of the Russian Federation does not consider this instrument as a "fine", the amount of which is lost by the debtor in case of violation of the terms of the transaction. It is used to cover property losses, debts. This follows from the direct interpretation of Art. 381.1, paragraph 1. The norm indicates that the security deposit is a guarantor of the fulfillment of contractual conditions and is included in the debt repayment, but is not collected in excess of the established amount. If we consider this instrument as a measure of responsibility, then it should be taken into account that it will have a compensatory character. In other words, its application is aimed at restoring the position of the creditor that existed before the violation of his interests. Accordingly, the security deposit cannot act as a means of enrichment.
Formal requirements
What conditions must be met in order to apply the security deposit? The Civil Code does not establish specific requirements for an agreement on its use, including its form. However, for practical reasons and based on the norms of the Code, the document should contain the key conditions agreed by the parties. In particular, the agreement should indicate what kind of obligation is secured by payment, list the circumstances on the basis of which the creditor can satisfy the claims at his expense. If these conditions are not met, then the instrument in question cannot be used. In addition, the agreement must contain a specific payment amount. It should be borne in mind that its size may vary depending on certain circumstances. Therefore, it is advisable to indicate in the contract not a fixed amount, but a percentage value.
Nuance
In paragraph 2 of Art. 381.1 there is an indication of the time period for the occurrence of circumstances under which the security deposit may be included in the repayment of the debt. With a high degree of probability, the courts will consider the presence of this condition in the agreement as mandatory, since any such references in the norms are regarded as imperative. Meanwhile, the absence of an indication of the time period for the occurrence of certain circumstances cannot lead to the recognition of the transaction as not concluded. This is due to the fact that the security deposit, acting as an accessory (additional) obligation, is tied to the main one. Accordingly, there is an initial contract in which there is an indication of the time period for the occurrence of circumstances.
Scope of distribution
In practice, a security deposit is used when concluding preliminary, rental, distribution agreements. This tool may perform functions other than warranty. For example, its introduction can be used as a condition for starting the execution of the terms of the transaction. In other words, the supplier or contractor does not start repaying obligations until payment is received.
The specifics of the occurrence of circumstances
It is stipulated in paragraphs 2 and 3 of Art. 381.1 of the Code. In the second paragraph, in particular, it is said that if the stipulated circumstances do not occur within the prescribed period, the participant in the transaction may return the security deposit. A similar rule applies in the event of termination of the main agreement. The parties, however, may establish other conditions. For example, the parties to the transaction may agree that the security deposit will be counted towards payment for products for recent periods if the main volume of products is transferred or most of the work/services are completed. In this case, there is no reason to doubt that the terms of the transaction will be fulfilled. Similarly, you can apply the tool in question and in the lease agreement. In this case, the amount will cover the debt for last month. This will avoid multiple transfers of funds from account to account, since the creditor will already have a security deposit at his disposal. Problems with resolving the issue of sending money back to the debtor will also be excluded.
Stimulating function
In paragraph 3 of Art. 381.1 of the Code provides that the parties may agree on the condition under which an additional deposit or return of the security deposit is made in the event of specific circumstances. This provision makes it possible to stimulate the legal behavior of the counterparty. As a rule, it is used when concluding long-term contracts to guarantee the timely repayment of debts. For example, the lender may set a liability limit. If it is exceeded, the amount of deduction also increases. Also, the creditor, on the contrary, can reduce the amount of security if the debtor repays the obligation on time.
Difficulties in transactions
A security deposit cannot be used to secure a non-monetary obligation. For example, they may be a condition on the timely transfer of the leased asset to the owner, maintaining the object in good condition, and so on. Formally, there is no possibility to secure non-monetary obligations by payment. However, there is a way out of this situation. To use a security deposit, a non-monetary obligation must be converted into a monetary obligation. The creditor must provide in the agreement for violation of the terms of the transaction (forfeit). And the security deposit will guarantee its execution.
Compensatory function
The agreement between the parties may provide for the return of the security deposit in the absence of violations of its terms. This can happen for various reasons. However, in any case, the procedure must be voluntary on the part of both participants. The agreement may establish compensation in the event of a unilateral termination of the relationship. However, participants often agree that the security deposit is not returned, but is credited towards the repayment of this amount.
Differences from the deposit
As mentioned above, the main function of the security deposit is compensation for possible losses. It does not act as a tool for punishing a participant who has violated the terms of the transaction. This payment differs from the deposit. The latter, by agreement of the parties to the relationship, may be transferred in excess of the amount of losses with offset, unless the agreement establishes otherwise.
Important point
Unlike many other types of security other than a deposit, the payment in question enables the lender to receive the amount before the terms of the transaction are violated. Other means involve the transfer of compensation after the commission of certain actions by the debtor. There are no prohibitions in the Civil Code on the use of a security deposit by a creditor for their own purposes. The deposit is taken into account as part of the amounts under the agreement. This rule does not apply to the security deposit, unless it is established by the parties. Thus, it allows not only to receive amounts under the main agreement, but also to have additional financial guarantees.
Subject of the transaction
It is mainly cash. Until recently, civil circulation required financial support, but it was not expressly provided for in the Civil Code. Other funds did not allow guaranteed receipt of money in case of non-compliance by the counterparty with the conditions. The only exception was She was formally independent of the main debt and provided by a solvent organization. The widespread use of this option is hindered by its high cost. At the same time, the subject of security to a certain extent acts as a lack of payment. For example, if it's about large sum, the debtor is unlikely to seek to withdraw it from circulation. In addition, he does not receive any interest for this. However, the parties may agree on their accrual. Such a fee would be well justified. This is due to the fact that the debtor's funds are with the creditor, and the Code does not prohibit the latter from using them for commercial purposes.
Foreclosure
In addition to collateral, the payment can be used as some kind of "reserve fund". For example, the terms of the transaction may provide for the right of the participant in whose account the funds are kept to spend them to pay off the debt that has arisen. So, if the user under the lease agreement has not paid the next amount, the owner can count the security deposit as it. In these cases, the agreement should include rules for the owner of the facility to notify the tenant of the foreclosure. It is advisable to notify the subject in writing. The content of the notice may be included in a breach of business claim.
Possible disputes
After the end of the rental period, the security deposit may be credited as the last month's fee or returned to the user. However, at this stage, the latter may have certain difficulties. If the owner fulfills his obligations in bad faith, getting the funds back will be extremely problematic. If the tenant regularly complies with the terms of the transaction, then in case of refusal, he can go to court. Practice in cases of this category is very ambiguous.
Most of the courts adhere to the position that the right to enforce the security deposit should be established by agreement between the parties. If it is not provided, the actions of the owner who repays the last installment will be declared illegal. In addition, the courts indicate that sending a notice to the user about the foreclosure of a payment is mandatory. Meanwhile, this rule is not established in the legislation. However, by notifying the counterparty, the participant in the transaction demonstrates his good faith. Accordingly, evidence of notice being sent may contribute to the resolution of the case.
Conclusion
In general, it can be said that the security deposit can be sufficient effective tool forcing the party to the transaction to properly fulfill its obligations. But when drawing up an agreement, it is necessary to clearly stipulate all the conditions. The parties must come to a solution that would not infringe on their interests. Otherwise, the security deposit will act as a discriminatory instrument. If the conditions for its application are transparent, then there will be no disputes and difficulties in resolving them.
A security deposit in accounting, as well as in tax accounting, can be reflected using different approaches depending on the powers of the taxpayer as a party to a commercial agreement, the applicable taxation system and other factors. We will study the basic principles of accounting for a security deposit in more detail.
What is a security deposit?
In a broad sense, a security deposit is an amount of money that the obligated party to the contract transfers to the authorized party in order to ensure the fulfillment of its obligations under the relevant contract or compensate for possible losses of the entitled party. In this context, a security payment can be put on a par with a pledge, a deposit and other security mechanisms (clause 1 of article 329 of the Civil Code of the Russian Federation, letter of the Ministry of Finance dated 03.24.2017 No. 03-03-07 / 17197).
In the narrow sense, in accordance with the provisions of paragraph 1 of Art. 381.1 of the Civil Code of the Russian Federation, a security payment should be understood as a sum of money that is transferred by the obligated party to the contract authorized in order to secure a monetary obligation.
At the same time, such an obligation may occur in the future, and its fulfillment (in whole or in part) at the expense of the security deposit is carried out when the circumstances established by the agreement arise. If such circumstances do not occur (or if the obligated party fulfills the terms of the agreement), then the amount of the security payment is returned to the obligated party, unless otherwise provided by the agreement (clause 2, article 381.1 of the Civil Code of the Russian Federation).
Separate agreements between the parties may regulate the replenishment or, conversely, partial refund of the amount of the security deposit under certain circumstances.
Let us study how accounting is carried out for transactions that reflect the transfer of funds on account of a security deposit from the obligated party to the contract to the authorized one. Accounting will be kept by both parties of legal relations.
At the same time, accounting for the simplified tax system and DOS will differ.
How to accrue a security deposit under the simplified tax system: postings in the accounting of the authorized party
First, let's consider how information about the security deposit in terms of receiving monetary compensation reflects in accounting entries an authorized party (for example, a seller of goods).
Example 1
Trading-Consulting LLC, as a supplier of vegetables, entered into an agreement with Leasing-Banking LLC. Under the contract, the buyer of the vegetables made a security deposit. LLC "Trading-Consulting" successfully delivered vegetables, and LLC "Leasing-Banking" paid for the delivery in a timely manner. The supplier of vegetables returned the security deposit to the buyer, since the latter fulfilled the obligations established by the contract.
In the specified legal relationship with the application of a security deposit accounting entries with USN will be as follows:
- Dt 51 Kt 62 / OP (now and in all cases further, unless otherwise indicated, sub-account for the counterparty, in this case Trading Consulting LLC) - receipt of payment;
- Dt 62 Kt 51 - return of payment to the counterparty.
Example 2
Trading-Consulting LLC, as a supplier of vegetables, entered into an agreement with Vending-Lending LLC. The buyer has made a security deposit. LLC "Trading-Consulting" supplied vegetables, but LLC "Vending-Lending" did not pay for the delivery due to financial difficulties. The security payment was not returned to the buyer and set off against his obligations to the supplier.
In this scenario, the following transactions would apply:
- Dt 51 Kt 62 / OP - receipt of payment;
- Dt 62 / OP Kt 62 - the security deposit is offset as a payment for deliveries;
- Dt 62 Kt 90.1 - credited OP is included in revenue ("on payment" for the simplified tax system).
Now - about the postings used by the obligated party.
Accounting for a security deposit by the obligated party under the simplified tax system: postings
Leasing-Banking LLC, within the framework of the agreement on the application of the security deposit, will select the following entries in the accounting registers:
- Dt 60 / OP (sub-account again for the counterparty) Kt 51 - payment is transferred to the counterparty;
- Dt 51 Kt 60 / OP - the counterparty returned the payment.
LLC "Vending-Lending" in its registers will register the postings:
- Dt 60 / OP Kt 51 - payment is transferred to the counterparty;
- Dt 41 Kt 60 - goods delivered by the counterparty are accepted on the balance sheet;
- Dt 60 Kt 60 / OP - payment is credited as a payment for deliveries.
IMPORTANT! As an alternative to accounts 60 (when accounting for transactions with a supplier) and 62 (when accounting for transactions with a buyer), account 76 can be used for the OP. At the same time, it also makes sense to open a subaccount for the counterparty.
Don't know your rights?
Postings are applied according to a different scheme if the parties work on DOS. This is mainly due to the fact that they become VAT payers.
DOS: transactions of the authorized party with a security deposit including VAT
Trading-Consulting LLC, if it is agreed that it works for DOS, can apply transactions with VAT allocation. This must be done if the payment is applied in practice, that is, it is set off as a payment for deliveries (letter from the Department of Tax and Customs Tariff Policy of the Ministry of Finance of Russia dated 11/03/2015).
When interacting with Leasing-Banking LLC, there will be no reason for calculating VAT. But in the course of cooperation with Vending-Lending LLC, the tax will be allocated. In this case, the vegetable seller will apply the postings:
- Dt 51 Kt 62 (76) / OP - payment accepted;
- Dt 62 (76) / OP Kt 62 - payment is credited as payment for the goods;
- Dt 62 Kt 90.1 - revenue for the goods is reflected (in the amount of the set-off security deposit);
- Dt 90.3 Kt 68 - VAT has been charged on the amount of revenue.
In turn, the buyer of goods on DOS will also apply separate postings.
Obliged party under DOS: security deposit entries
In this case, it does not matter in principle whether the security deposit is used to pay for the deliveries or not. The obligated party, both Leasing-Banking LLC, which returned its security deposit, and Vending-Lending LLC, forced to pay for vegetables through a security deposit, will only deal with input VAT on the goods.
For this purpose, both firms will apply the following postings:
- Dt 60 (76) / OP Kt 51 - the security deposit was issued to the counterparty;
- Dt 41 Kt 60 - goods are put on the balance sheet (amount without VAT);
- Dt 19 Kt 60 - the VAT presented by the counterparty is taken into account (according to fixed rate from the cost of goods);
- Dt 60 Kt 60 (76) / OP - the security deposit is offset as payment for the goods;
- Dt 68 Kt 19 - previously accounted for input VAT from the counterparty is accepted for deduction.
It is noteworthy that the considered transactions in the application of a security deposit by counterparties are very similar to those that characterize the use of another guarantee payment instrument - a deposit.
Deposit - the amount of money transferred by the buyer to the seller as a guarantee of the transaction. If the transaction fails due to the fault of the buyer, then the seller retains the deposit, and if he is to blame, he returns to the buyer the amount twice the deposit (clause 2, article 381 of the Tax Code of the Russian Federation). If this legal construction is not applied in the contract, then the deposit is considered an ordinary advance, that is, part of the prepayment for the supply (clause 3, article 380 of the Tax Code of the Russian Federation).
We will study which postings are used for the deposit and how they differ from those discussed above.
Postings for security deposit and deposit: comparison
The main practical differences between a deposit and a security deposit:
- The possibility of withholding the amount of the deposit by the supplier, who did not deliver anything after the fact.
If such a withholding occurs, then the supplier reflects this fact with postings (we agree that the supplier pays VAT):
- Dt 51 Kt 62 / Z - deposit received;
- Dt 62 / Z Kt 91 - the deposit is included in other income;
- Dt 91 Kt 68 - VAT has been charged on the amount of the deposit.
Thus, the postings do not contain the subject of payment (goods) and the fact of VAT accrual on it: the amount of the deposit is included in other income, and not in revenue (as with a security deposit). Otherwise, the postings are applied with the same synthetic accounts as when the application of the security deposit is reflected in accounting.
- Possibility for the buyer to receive a double amount of the deposit.
In such a situation, the buyer will apply the postings:
- Dt 60 (76) Kt 51 - the deposit was transferred to the supplier;
- Dt 51 Kt 60 (76) - the deposit was received back with a "penalty" amount;
- Dt 60 (76) Kt 91.1 - "penalty" excess over the original deposit is included in other income.
Here again we are talking about the appearance of the amount included in other income - separated from the one that corresponds to the original amount of the deposit, which is returned. It is noteworthy that, as in the case of the unused security deposit, VAT is not reflected in the transactions, since additional income the buyer in this case is represented by a penalty that is not related to payment for goods (Decree of the Presidium of the Supreme Arbitration Court of the Russian Federation dated February 5, 2008 No. 11144/07 in case No. A55-3867 / 2006-22).
Another noteworthy nuance is the use of supporting documents as part of the accounting of the payment in question.
Security deposit in accounting: we use supporting documents
When reflecting the offset as payment for the goods of the security deposit in accounting, a special justifying document is used - an act on the consent of the parties to make an appropriate offset. The act may include:
- information about the contract under which the security deposit is applied;
- information about the reasons for applying the security deposit (for example, about the occurrence of financial difficulties for the obligated party when making a regular payment);
- the fact that the document is drawn up on the basis of the provisions of Art. 381.1 of the Civil Code of the Russian Federation;
- the fact that the document is used as an instrument that guarantees payment (and therefore does not imply the calculation of VAT on the security deposit by default, but only when it is subsequently credited as payment for goods).
The procedure for drawing up the act in question may be provided for by the provisions of the treaty itself.
Otherwise, in terms of the application of supporting documents, everything is quite standard: in necessary cases, the contract itself is used as such, accounting references, invoices, invoices (it must be remembered that VAT payers do not issue them to counterparties who do not pay this tax themselves).
It will also be useful to familiarize yourself with the nuances of tax accounting for the payment in question.
Tax accounting of security deposit: nuances
When maintaining a tax record of a security deposit, it must be borne in mind that:
- The payment received by the supplier is included in his income (and the buyer's expenses) only upon the fact of offset as a payment for the goods (letter of the Ministry of Finance of Russia dated 03.24.2017 No. 03-03-07 / 17197).
The supporting document here is the act we mentioned above.
- The contract may provide that the security deposit is not returned to the buyer until the end of the entire contract. For example, if there are several deliveries over several periods. The payment made before the first delivery performs a guaranteeing function for subsequent deliveries. At the same time, it remains a security deposit until it is used in settlements (in tax base not included in VAT and income).
In practice, such a function can be performed:
- according to the situation - when the buyer, due to circumstances, may not have the funds to pay for all deliveries in a timely manner;
- in the event of circumstances stipulated by the contract (for example, when the contract stipulates that deliveries for an amount exceeding the established amount must be accompanied by a mandatory set-off of a security deposit).
Accordingly, the payment is included in the income (expenses) of the party in reporting period in which the act of offsetting the payment was drawn up (according to the situation or in a contractual manner).
***
How to accrue a security deposit with accounting entries and how to keep tax records of transactions on the payment in question depends on the status of the party under the agreement (it may be authorized or obligated), the taxation regime, and the results of the transaction. If the security deposit is used in practice to pay for supplies, then the recipient of the payment, who is a VAT payer, must accrue and pay VAT and reflect it in the accounting.
Security deposit - with or without VAT: arguments for taxation
Security deposit - with or without VAT? In cases where the parties (one or both) of the agreement establishing the security deposit work for the OSN, the charge of VAT on the security deposit can be considered as the obligation of the taxpayer (the party to the agreement working for the OSN), because:
- The supplier (an authorized party in terms of financial obligations) must calculate VAT on the amounts received on account of future deliveries of goods (clause 1, article 168 of the Tax Code of the Russian Federation). If VAT has been accrued, then it can then be deducted by analogy with VAT on advances received.
- The buyer (the obligated party in terms of monetary obligations) has the right to deduct VAT on the amount of the security deposit based on the invoice from the supplier.
When the payment is returned by the supplier, the VAT is recoverable. This is allowed to speak the norms of sub. 3 p. 3 art. 170 of the Tax Code of the Russian Federation, which again refers to the upcoming deliveries of goods. - The security deposit can be considered an amount otherwise related to payment for goods sold (in the context of the provisions of subparagraph 2, paragraph 1, article 162 of the Tax Code of the Russian Federation), and, accordingly, subject to VAT.
It would seem that the provisions of the Tax Code of the Russian Federation testify to the need to carry out these transactions with VAT and reflect them in accounting. But there is also an alternative point of view on this matter.
The payment is not subject to VAT in 2018: arguments in favor of the position
The point of view according to which the security deposit is not subject to VAT - in 2018 businessmen may well adhere to it - is based on the following arguments:
- VAT is a tax levied on income received under common system taxation. Such income does not include those that are represented by a pledge or deposit, which are used as security for obligations (subclause 2, clause 1, article 251 of the Tax Code of the Russian Federation).
In turn, the Ministry of Finance actually considers a security deposit as a type of pledge (letter of the Ministry of Finance dated 03/24/2017 No. 03-03-07 / 17197). - The security deposit should not be legally considered as a method of payment (and, accordingly, a source of income for the taxpayer) if its amount is subject to return if the parties to the agreement properly fulfill the stipulated obligations (Decree of the Federal Antimonopoly Service of the Moscow District dated October 22, 2013 in case No. A40-136345 / 12).
- It is legitimate to say that the security deposit is endowed with a specific function, a guarantee, and its application is not carried out in order to ensure the settlements of the parties (Resolution of the Federal Antimonopoly Service of the Moscow District dated April 27, 2011 No. KA-A40 / 3679-11).
Summarizing the approaches outlined above, we can conclude that the taxation of the security payment of VAT should be carried out if this payment performs the function of not only providing, but also paying. Or there are quite serious reasons to believe that the payment will be credited as payment.
In turn, if the function of the security deposit is clearly defined only as a guarantee or pledge, such a payment may not be subject to VAT at the time of receipt.
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Example
LLC "Vasilek" rents an office in the business center of LLC "Kolokolchik". According to the standard agreement of Kolokolchik LLC, the tenant at the conclusion long-term contract makes the following security payments:
- payment for the last month of rent (determined based on the terms of the contract);
- a security deposit for possible repairs to the premises after the tenant moves out.
Vasilek LLC paid both payments on 02/01/2018.
The accountant of Kolokolchik LLC, when reflecting payments on accounting accounts, argues as follows:
- The payment for the last month of rent is, in fact, an advance. The probability that Vasilek LLC will use the office during the entire lease period is quite high. Thus, although in the contract this payment is called a security payment, it should be considered as an advance payment and subject to VAT.
- With regard to the security deposit for possible repairs, there is no certainty that it will be used. The business practice of Kolokolchik LLC itself shows that in the vast majority of cases this payment is returned in full to the tenant upon expiration of the lease agreement. In addition, this payment is not part of the rent under the agreement, but acts as a guarantee, so VAT may not be charged on this payment.
Taxation of the VAT security deposit: postings
Let's agree that the buyer transferred the security deposit to the seller, which will later be offset against payment for the delivered goods (services). In this case, the postings will be generated:
- On the seller's side:
- Dt 51 Kt 76 (“Security payments”) - payment received from the buyer;
- Dt 76AB Kt 68 - VAT has been charged on the amount of payment;
- Dt 62 Kt 90 - revenue for the entire batch of delivered goods is reflected;
- Dt 76 (“Security payments”) Kt 62 - the security deposit is set off as a payment for goods;
- Dt 90 Kt 68 - VAT is charged on revenue;
- Dt 68 Kt 76AB - accepted for the deduction of VAT, which was previously charged on the amount of the security deposit.
- On the buyer's side:
- Dt 76 (“Security payments”) Kt 51 - when transferring a payment;
- Dt 41 Kt 60 (“Supplies”) - goods received from the supplier (amount without VAT);
- Dt 19 or Kt 60 (“Supplies”) - VAT on goods received is taken into account;
- Dt 68 Kt 19 - VAT on goods received is deductible;
- Dt 60 (“Supplies”) Kt 76 (“Security payments”) - the security deposit is set off as payment.
Whether a security deposit is subject to VAT is determined by what happens next with the payment. If, under the terms of the transaction, the payment is credited against payment, it should be subject to VAT in the same way as prepayments received. If the security deposit is returned to the buyer after the performance of the guarantee function, then it may not be subject to VAT.
An exception would be when a payment is credited against payment as a result of changed conditions (for example, financial problems from the buyer). In this case, a separate document is drawn up for the credited amount (for example, an act of offset), and the amount of the security deposit becomes subject to VAT on the date of registration of the offset.