Explanatory note on income tax
Every quarter, organizations and enterprises that operate in our country submit a report to the tax service. In it, they reflect the amount of profit that the company received during the period under review. This document also contains information on losses.
In firms, the accountant is the accountant to the employees and the tax service. It is he who monitors the timely transfer of wages to employees and withholding income tax from them. His responsibilities include compiling reports on the work and functioning of the company.
Legal entities must submit income tax returns within the established time limits. After that, the supervisory authority begins to check the reporting documentation. In the event that the auditing organization has questions to the reporting person on the submitted declaration, then it has the right to request clarifications on this or that discrepancy.
This tax must be paid by Russian organizations and foreign firms that operate on the territory of our country and have permanent representative offices in different parts of it. Payers who are on special tax regimes are exempted from the obligation to pay this fee.
Rate and base
The rate is 20%, of which 3% goes to the federal budget, and the remaining amount is paid to the regional budget. This is the amount of the main tax that all legal entities pay. In other cases, the amount of the accrued amount can be either higher or lower than this value. A complete list of the taxable base is presented on the official website of the tax service.
Timing
Reporting period for this fee:
- 3 months;
- six months;
- 9 months;
- one year.
Payers are required to pay tax no later than March 28 of the year following the reporting year. In case of incomplete or late payment, the reporting person will face large fines and penalties, which are calculated from the unpaid amount and can reach tens of thousands. Therefore, it is necessary to transfer funds to the budget within the time limits established by law. This will avoid problems with the supervisory authority.
More information on the structure and application of income tax can be found at. Detailed information on the calculation of income tax is available at.
Full information on the preparation of explanatory notes to the tax office on demand is contained at.
Below we will consider in detail the preparation of explanations for the income tax return with examples.
Explanation of the declaration (examples)
The tax service will obligatorily require you to send an explanation to the declaration if the organization has losses for the past period, the data does not correspond to the submitted VAT report or the company's accountant's reporting. Let us consider in order how explanatory notes are compiled in these cases.
The loss has been declared
According to the results of the reporting period, the company may have not only profit, but also a loss. This occurs when the amount of expenses by a certain amount exceeds the amount of income. After the moment the company shows losses in the reporting document, the tax office will immediately become interested in this and will require explanations on this fact.
If, at the end of the reporting period, the accountant of the organization received a negative amount, then it is worth sending an explanatory note to the supervisory authority along with the declaration. This must be done in order to prevent the actions of the verifier and not wait for a request for clarification and an on-site audit. Systematic losses may cause the inspection service to doubt the reliability and stability of the company. After that, constant checks by tax inspectors will begin.
For greater clarity, consider the option of compiling an explanatory note on losses using a specific example.
Explanatory noteon existing losses for the reporting period
In response to the request for explanations No. 22-04 / 2201 dated April 22, 2016, Techno-Lux LLC, due to existing losses for 2015, explains:
The resulting loss in the amount of 80,000 rubles is associated with a decrease in profits by 20% and the participation of the company in the all-Russian exhibition on innovative computer technologies "Look into the Future", which was held on April 14, 2015.
The company participated in this exhibition to find new customers and to study the needs of customers. During the exhibition, the company made expenses in the amount of 250,000 rubles, of which:
120,000 rubles were spent on wages and bonuses for employees who took part in the exhibition;
130,000 rubles were spent on the preparation of the exhibition pavilion with the products of our organization.
Based on the results of the last exhibition, Techno-Lux LLC concluded six contracts for the wholesale supply of computers and copiers. Due to this, a significant increase in revenue is planned for the next quarter.
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When compiling an explanation, it is necessary to truthfully and clearly describe the reasons for the increase in expenses or decrease in profit. For example, an organization may be expanding its assortment and, as a result, the amount of expenses has increased. Also, the company can purchase new equipment for further expansion of production.
These facts inevitably lead to an increase in costs. This is exactly what should be indicated in the explanatory note. In addition, be sure to mention that the loss is temporary and the company will soon increase the amount of cash receipts and net profit.
Different amount of revenue in income tax and VAT declarations
There are cases when the amount of income in the income tax reporting document does not match the given value in the VAT report. This fact will undoubtedly arouse the interest of the verifier. This is because many tax inspectors believe that the amount of profit in all documents should be the same.
Such a statement is fundamentally wrong, since not all incomes that participate in the formation of the income tax base participate in the formation of the amount from which VAT is calculated. There are also opposite cases when the value of the tax base for VAT is formed by the same amounts that do not participate in determining the amount of duty on profits. Let's consider a similar situation with a specific example:
In February 2016, Tsvet-torg LLC transferred products to its partner free of charge, the cost of which, without VAT, amounted to 45,000 rubles. The company's profit for the first quarter of 2016 amounted to 480,000 rubles. This value was reflected in the income tax report as income for the quarter under review.
In the reporting document for VAT, the company's accountant in the third section in the corresponding column indicated a profit in the amount of 525,000 rubles (45,000 + 480,000). This procedure is regulated by the Tax Code. It states that VAT is charged on donated goods on a general basis, as well as on principal amounts. When compiling the reporting document, the accountant of Tsvet-torg LLC prepared written explanations on this fact:
Explanatory noteon the discrepancy between the amount of income in income tax and VAT declarations
Due to the fact that there were discrepancies in the amount of profit for the first quarter of 2016 of the company Tsvet-torg LLC, I explain the following.
The submitted reporting documents do not contain errors. The data on the amounts received differ because the procedure for calculating income tax differs from the specifics of calculating VAT.
Our company handed over the goods to the counterparty free of charge. The amount of transferred goods is subject to VAT and is equated to income. That is why this amount in the reporting document for VAT was increased by 45,000 rubles.
When calculating the amount received for the income tax report, the transferred goods are not subject to taxation and do not participate in the process of calculating the amount of profit. For this reason, there were discrepancies in this value for two declarations.
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The values in the declaration do not match the values in the accounting documentation
When checking a reporting document, tax inspectors compare the values in the declaration with similar values in accounting documents. Very often, these indicators do not coincide, and there is a reasonable explanation for this. 
In the process of compiling an explanatory note, it is necessary to emphasize that the rules for calculating the amount of profit when calculating tax differ from those that apply when calculating such an amount in accounting. These arguments should be used when compiling an explanation.
For example, consider the option when the company received the ownership of a fixed asset. In the tax calculation, its value will need to be taken into account immediately, and in the financial statements this fact will be reflected in stages using a variety of postings.
For example, Style LLC received a car for free use, which the company's accountant registered at a market value of 300,000 rubles. After a series of postings in the accounting documentation, the income line does not reflect the full cost of the fixed asset, but only the accrued depreciation.
This amount is reflected in the tax accounting at a time, since it is non-operating income. In the reporting document, which is transferred to the tax office, this amount was reflected along with the rest of the profit. During the audit, the tax inspector will not find a shortage of 300,000 rubles in the financial statements and will require written explanations.
Explanatory noteon the fact of discrepancies in the amount of income in the tax and accounting reports
No errors were made in the reports in question. The discrepancy between the amount of profit in the tax return and financial statements is due to the fact that the procedure for calculating it in these reports is different.
Our company received a fixed asset for free use. In accordance with tax legislation, its market value is fully taken into account in non-operating income.
In accounting, income from a fixed asset is taken into account as it is used and depreciated. This is the reason for the discrepancies in the amount of the amounts received by our company during the reporting period.
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It will be necessary to attach to the explanatory note all available documents that reflect the fact of receipt of the fixed asset. This can be an invoice, a waybill for goods or an act of commissioning a fixed asset.
