The number is not commercial organizations(NGOs), from locally established to international, is growing steadily. However, the conditions for their existence are not favorable in all countries. In this article we will tell you about the taxation of non-profit organizations and provide answers to frequently asked questions.
General information about non-profit organizations
A non-profit organization is one whose profits from its activities are spent on achieving its statutory goals and are not distributed among the founders. Organizational forms provided for NPOs:
- Fund;
- Public organization;
- Religious association.
NPO resources can be:
- volunteer work for the organization;
- cash grants issued by foreign financiers;
- charities organized by commercial enterprises;
- membership fees (see →).
The state, in turn, supports only the main activities of NPOs specified in constituent documents by providing tax benefits. But non-profit organizations, like any other, exist in a market environment, which means it makes sense for them to invest part of their money in their own growth and make reserves.
Along with commercial enterprises, NPOs have the right to engage in business if such activity does not contradict the goals of the company.
In any case, NPOs are not exempt from paying taxes, and their accounting is carried out according to general rules. Any state is interested in receiving large sums from tax revenues, but when taxing NPOs, the benefits to society are taken into account. Many non-profit organizations work on social problems, which means they have a positive impact on people and reduce social tension, which benefits the country.
Policies of different countries regarding non-profit organizations
Taxation of non-profit organizations is based on two approaches:
- First approach. It is based on the fact that an NPO is an organizational and legal form, and focuses on the subjects of charity, endowing them with rights and assigning responsibility to them through the special status of the beneficiary company.
- Second approach. It is based on the scheme of interaction between the NPO and the donor and places emphasis on the purpose of the donation and the expenditure of monetary resources.
In any case, attention is paid to the types of activities non-profit enterprises and the public benefit they bring. In developed countries, there is comprehensive support for non-profit firms:
- various benefits for NPOs themselves and their donors,
- tax credits,
- financing,
- norms, supported by legislation, on the activities of NPOs.
Conditions for granting benefits, similar for all countries:
- the enterprise is officially registered as a non-profit;
- The NPO is engaged in work aimed at achieving officially stated goals;
- The organization reports according to established rules.
A problem for all countries is the establishment of restrictions on the amount of tax breaks for individuals and legal entities when donating funds to non-profit organizations.
There are two views on taxation of NPOs:
- NPOs do not have to pay taxes because the money they receive is not taxable income. Russia adhered to this opinion until 2002, not recognizing NPOs that abandoned entrepreneurship as taxpayers.
- NPOs are exempt from taxes, although revenues to their budget are recognized as income. This policy has been followed by the Russian Federation since 2002, with the amendment that NPOs are exempt from tax deductions only for a number of donations (Article 251 of the Tax Code of the Russian Federation). Read also the article: → “”.
Tax policy of Russia in relation to NPOs
In 2002, Russia managed to approve a relatively low tax rate by reducing the list of tax benefits, including concessions in the payment of taxes on corporate profits. In addition, tax credits were eliminated. Therefore, organizations that provide free goods and services or send money to non-profit foundations do not receive tax benefits.
Such relaxations would jeopardize the entire structure of the income tax. Since 2002, organizations have the right to send money to charitable foundations, but it is legal to do this only after paying all taxes and fees. Individuals can deduct certain types of donations to NPO funds from personal income taxes.
Problems related to taxation of NPOs:
- Taxation conditions are different for all types of non-profit organizations, in particular they differ for non-state and municipal enterprises.
- If funds were transferred to a non-profit organization, which were then invested in order to obtain passive income, they are subject to income tax and value added tax, and this activity is recognized as entrepreneurship, and the income is also subject to income tax.
- There is a dependence of the need to pay income tax and VAT on the features of the gratuitous transfer of property to an NPO for the implementation of its statutory purposes.
- According to the legislation of the Russian Federation, donations can be received in strictly established areas, and a donation is recognized as a gift of things or rights. The list of types of charity is limited by federal laws. Thus, all sorts of restrictions do not allow NPOs to engage in many types of activities that are traditional for them.
- Tax legislation limits the list of areas of activity of NPOs, the financing of which will be deducted from corporate income tax.
Financial support for NPOs is recognized by tax legislation as targeted financing and is limited to the issuance of grants and gratuitous contributions.
Comparative characteristics of world countries and Russia in the field of support for NPOs
Characteristics of indicators and comparison are given in the table:
| Indicators | World countries | Russia |
| Charity in state NPOs | 1. Benefits for commercial and non-profit organizations 2. Benefits only for non-profit enterprises 3. Benefits for a narrow circle of NPOs (funds) | No benefits |
| Charity to non-state NPOs | Reducing taxable income by the amount of deductions. For the USA: individual – up to 50%, legal entity – up to 10% | Reducing taxable income for individuals only |
| Tax on income of NPOs | Exemption of NPOs from taxes | Taxation and accounting on par with commercial enterprises |
| VAT | 1. Exclusion of non-profit organizations from the VAT system. 2. Application of a zero rate. 3. Reducing the VAT rate. | NPO – VAT payer at general rates |
| NPO income from investments | NPOs are allowed to receive income from investments, while they are exempt from taxes. In some Central and Eastern European countries, only part of the “passive” income is taxed, or is taxed at a reduced rate, or there is no tax on certain types of investments. | There are no restrictions on receiving income from investment, while such activity is considered a business and is subject to income tax at the usual rate. |
| Free services for NPOs | Services provided and work performed free of charge are not subject to tax. | The cost of work performed for an NPO free of charge is considered income of the NPO, even when the services are provided to support statutory activities. |
Taxation of NPOs under the simplified tax system
Non-profit organizations, like commercial ones, can choose the “simplified tax system” immediately upon registering an enterprise, or switch to it from a new calendar year from another form of taxation by submitting the appropriate application before the end of the current calendar year.
Restrictions on the transition to the simplified tax system for non-profit organizations are similar to the conditions for organizations created for the purpose of making a profit:
- No more than one hundred employees in the company;
- Annual revenue no more than 45 million rubles;
- The property of the enterprise is estimated at no more than 100 million rubles.
The difference between an NPO and a commercial organization
It is prohibited for a commercial company to switch to a simplified system if the owner of the capital is another legal entity and part of its profit is more than 25%. This restriction does not apply to a non-profit enterprise.
Letter of the Ministry of Finance of Russia dated March 28, 2014 No. 03-11-06/2/13904 established that membership fees and money received in the form of voluntary donations will not be included in the tax base according to the simplified tax system if there is evidence of spending funds on the maintenance of NPOs or running its statutory work documents.
A practical example of tax calculation for NPOs using the simplified tax system
Let non-profit company N receive an income of 512 thousand rubles during the tax period. She spent 408 thousand rubles. to achieve its statutory goals.
- According to the simplified tax system “Income”, the tax amount will be:
512,000 * 6% = 30,720 rubles.
- According to the simplified tax system “Income minus Expenses,” the tax will be equal to:
(512,000 – 408,000) * 15% = 15,600 rub.
The choice of taxation system in favor of the simplified taxation system “Income – Expenses” is obvious.
Features of taxation of NPOs on OSNO
A comparison of the two taxes is given in the table:
| Payment | Income tax | VAT |
| Paid | When wages were paid to employees from income. Amounts are subject to social tax, which is calculated for each employee separately. | Regardless of whether the NPO is engaged in entrepreneurship or not |
| Not paid | If the income received was spent for the purposes specified when registering the organization | If the income received was spent on achieving the statutory purpose. For such cases, separate books of accounting for expenses and income are maintained; only if this requirement is met, it is possible to exclude taxation for such transactions |
Every year you need to fill out a special VAT return, paying attention to special attention 7 section, which is issued only when the following operations have taken place:
- activities in relation to which the legislation does not provide for the collection of VAT;
- transactions in relation to vows not subject to VAT;
- activities the results of which are implemented outside the territory of the Russian Federation;
- production or delivery of goods, the period of which would exceed six months.
Practical example of taxation
A non-profit company dedicated to protecting rare animals received income from educational services. These funds were used to purchase serum for vaccination of a rare breed of wild cats kept for breeding purposes in a protected area. natural area. Money paid for vaccines will not be taxed, since they were used to purchase means to achieve the statutory goals of the enterprise.
Typical errors in calculations
Mistake #1. When transferring excisable goods free of charge, NPOs do not pay value added tax.
Federal Law of August 11, 1995 No135-FZ allows you not to pay VAT when transferring goods free of charge or performing work during a charity event. But the exception is excisable goods, which are taxed according to general rules.
Mistake #2. The NPO did not deduct personal income tax on donations to individuals who were not its employees.
Article 217 of the Tax Code of the Russian Federation actually states that such payments are not subject to tax, but they must come from state authorities. This rule does not apply to non-profit organizations. In some cases, funds sent to help family members of a company employee are not taxed. Or it could be a tax-free one-time assistance (no more than 2 thousand rubles per year) to the family of an employee (or former employee) of the enterprise.
There is also the concept of a “gift”, again in an amount not exceeding 2 thousand rubles. per year, however, the tax office is critical of this type of payment and perceives payment of this kind as financial assistance. And finally, NPOs included in the official lists approved by the Government of the Russian Federation are exempt from tax, but the lists have not yet been made public.
Mistake #3. NPOs do not keep accounting records for a quarter, half a year, or nine months.
Frequently Asked Questions
Question No. 1. Are donations subject to personal income tax? individuals in favor of individuals?
No. A donation (the amount is not limited by law) is equivalent in this case to a gift. Exceptions: real estate, vehicle, shares (the restriction does not apply to a family member).
Question No. 2. How to close an NPO founded by several founders, one of whom quit this activity and did not disclose his location?
Only the highest governing body of the NPO - the meeting of members - can liquidate an enterprise. If the retired founder was a member, he must be legally expelled by a decision of the remaining members of the meeting, in this case for non-participation in the work of the company and non-payment of contributions. After this, the enterprise can be closed by the decision of the remaining members of the NPO meeting.
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Non-profit organizations, as their name suggests, are not created for profit. Here are their main activities: social, charitable, cultural, educational, scientific.
NPOs (except for associations, unions, SROs and trade unions), of course, have the right to engage in entrepreneurial activities. But only if it is aimed at achieving the main goals of the organization.
In this regard, there are many peculiarities in the taxation of non-profit organizations. Let's talk about taxes for a non-profit organization.
When does the obligation to remit income tax arise?
The most important thing when calculating income tax is to accurately classify the income that goes to the company. After all, according to the rules, non-profit organizations must pay tax only on profits received from business activities.
If the receipts are provided for by the charter, there is no obligation to remit tax on them. But even here, income must comply with Article 251 of the Tax Code of the Russian Federation.
For example, targeted funding (grants, investments) and targeted income (donations, admission and membership fees) will not be taxed if they meet the following requirements:
Received free of charge;
Used on time for the intended purpose;
Spent on conducting statutory activities or maintaining NPOs.
And lastly important condition: an organization that receives targeted funds is required to keep separate records of income and expenses from business activities (if any) and from the statutory ones. This is stated in subparagraph 14 of paragraph 1 of Article 251 of the Tax Code of the Russian Federation. After all, if funds are simultaneously used in a targeted and non-targeted manner, the company has the right to pay tax only on the part involved in business activities.
In which case the income of NPOs will be taxed, and in which not, can only be determined with a detailed analysis of each of the financing. After all, everything here depends not only on the specific type targeted revenues. But also on the organizational and legal form of the non-profit organization.
For example, associations and unions do not have the right to engage in business. All receipts must be related to their statutory activities. And not all non-profit organizations can receive donations. On voluntary contributions, say, consumer cooperatives will have to pay income tax.
In general, the income of non-profit organizations from the production and sale of goods or work should be determined in the same way as for commercial companies. But it also has its own characteristics. Let's look at the case when a company sells a fixed asset purchased with earmarked funds (or received as earmarked proceeds).
Example
What taxes does a non-profit organization need to pay when selling a fixed asset purchased with targeted funds?
The Vera Foundation received a donation from Stroymash JSC to purchase a computer worth 47,200 rubles. The accountant set a deadline beneficial use- 24 months. But a year after use, the fund decided to sell the computer for 35,400 rubles. (including VAT - 5400 rubles).
In this case, the income tax will be 15,440 rubles. ((RUB 35,400 - RUB 5,400 + RUB 47,200) × 20%).
The Vera Foundation will also pay VAT - 5,400 rubles.
As you can see, a non-profit organization needs to pay income tax on income from sales and the entire cost of the fixed asset. Because the funds received to purchase a computer were used inappropriately. After all, at the time of sale the useful life of the object had not expired. This means that the sold property as a whole did not serve its intended purpose. For the same reason, the accountant charged VAT. If you calculate income tax only on the sale and residual value of property, this may cause a dispute with the tax authorities.
Now let's turn to non-operating income that non-profit organizations often encounter. Here we will talk about property that was received free of charge, but has nothing to do with the target.
Recognize the cost of such objects in tax accounting based on market prices. They can be confirmed either by the recipient or by an independent appraiser.
Pay special attention to this moment. Throughout their activities, NPOs use office equipment or furniture free of charge. As a rule, they belong to the founders or employees of the organization. So, if the transfer of property is not formalized as a donation or the organization does not pay rent for use under the agreement, then the property is considered to be received free of charge. He will have to pay income tax. This is established by paragraph 8 of Article 250 of the Tax Code of the Russian Federation.
But if someone provided some kind of service or performed work to a non-profit organization free of charge, then there is no need to pay tax on this. This is stated in subparagraph 1 of paragraph 2 of Article 251 of the Tax Code of the Russian Federation.
Let's say a few words about interest received on bank accounts. Typically, the bank charges interest on the amount that is stored in the current account. If so, then the non-profit organization must take into account the resulting increase as part of non-operating income. After all, this is required by paragraph 6 of Article 250 of the Tax Code of the Russian Federation.
Moreover, you will have to follow this rule regardless of whether the money is intended for intended use or commercial use.
Of course, NPOs retain the right to reduce taxable profits for expenses. In what cases this can be done and in what cases it cannot be done is described in detail in the table.
Table.
Which expenses are included in the profit base and which are not?
| The NPO conducts only statutory activities | The NPO conducts statutory and entrepreneurial activities | ||
|---|---|---|---|
| Negative exchange rate differences | - | Mandatory contributions or deposits paid by NPOs | - |
| Material costs | - | ||
| Labor costs | - | Labor costs incurred from business income | + |
| Penalties paid | - | ||
| Bank expenses | - | Financial assistance to employees | - |
| Utility payments | - | Depreciation charges for fixed assets acquired from business income and used in commercial activities | + |
| Rent | - | ||
| The amount of accrued depreciation on fixed assets purchased with target funds | - | Penalties transferred to the budget | - |
By the way, non-profit organizations, like other companies, have the right to create a reserve for upcoming expenses. It will allow you to evenly take into account income and expenses when determining the income tax base. This opportunity appeared for NPOs only last year, when legislators added Article 267.3 to the Tax Code of the Russian Federation.
Payment of VAT
As in the case of income tax, the obligation to pay value added tax arises only if the NPO is engaged in business activities. There is no need to calculate VAT on target revenues that are not related to payment for goods sold or works or services and are used for their intended purpose.
In addition, if a non-profit organization received non-operating income from these funds, VAT will not be required.
Is a non-profit organization entitled to deduct VAT? Yes, but only if the goods or works are acquired through commercial activity and are strictly used in business. VAT paid to suppliers when purchasing goods, property or work using earmarked funds is not deductible.
And the amount of NPO input tax is included in the cost of goods, property or work. This is indicated by subparagraph 1 of paragraph 2 of Article 170 of the Tax Code of the Russian Federation.
QUESTION - We rent premises. We conduct both primary and business activities there. It is unrealistic to account for rental expenses separately. Can input VAT be deducted?
No, you can't. The procedure for dividing the tax is not provided for by the Tax Code. But the organization has no right to calculate the proportion based on revenue. After all, NPOs do not have the concept of “shipped goods (work, services)” within the framework of their statutory activities.
Non-profit organizations are entitled to VAT benefits. All cases are listed in Article 149 of the Tax Code of the Russian Federation. For example, the gratuitous transfer of property rights within the framework of charitable activities is exempt from taxation. This is stated in subparagraph 12 of paragraph 3 of Article 149 of the Tax Code of the Russian Federation. Or the sale of services related to social protection of the population (subclause 14.1, clause 2, article 149 of the code).
And all the same, if NPOs apply benefits, they must issue invoices, but without the allocated tax amount. Otherwise, the organization should transfer the specified tax to the budget.
By the way, non-profit organizations with small sales turnover for business activities are completely exempt from VAT. The main thing is that the amount of revenue for the three previous months in a row does not exceed 2 million rubles. excluding VAT. This is directly stated in paragraph 1 of Article 145 of the Tax Code of the Russian Federation. Revenue includes all income in cash and in kind that is associated with payments for goods sold or work sold. With the exception of targeted receipts, they are not recognized as revenue.
But even if an NPO enjoys benefits or is completely exempt from paying VAT, it will still need to issue invoices to customers for the cost of goods and work sold. And submit a VAT return in the general manner.
Payment of property tax on objects that the NPO uses in commercial activities
No one exempted non-profit organizations from property tax. But still, legislators from time to time expand the list of objects that are not subject to this tax. For example, Federal Law No. 202-FZ of November 29, 2012 updated paragraph 4 of Article 374 of the Tax Code of the Russian Federation. Monuments of history, culture and ships registered in the Russian International Register of Ships were added to the preferential objects.
For some NPOs, property tax benefits are established by regional authorities. Several relaxations are provided for in Article 381 of the Tax Code of the Russian Federation. For example, for religious enterprises (clause 2 of Article 381 of the Tax Code of the Russian Federation) or organizations of disabled people (clause 3 of Article 381 of the Tax Code of the Russian Federation). But remember: the benefit is provided in relation to property that is used in statutory activities.
What if, along with the statutory organization, it conducts entrepreneurial activities? And at the same time he uses the privileged property for commercial purposes. Then the privilege can be applied only to that part of the property that is used in statutory activities. To do this, the cost of objects can be distributed:
Proportional to the area they occupy;
Based on specific gravity financing in total income.
We recommend using the first method, because it allows you to avoid recalculating the proportion for distributing the cost of the operating system several times. But whichever option you choose, fix it in your accounting policy.
QUESTION - In June we bought a fixed asset, which is exempt from property tax. We will register it only in July. How to determine its average annual cost?
To calculate the average annual value of such property, you need to add up the residual value of the property on the 1st day of each month of the tax period and on January 1 of the following year. Then divide the resulting amount by 13 - the number of months in a calendar year, increased by one. The Russian Ministry of Finance said this in a letter dated December 30, 2004 No. 03-06-01-02/26. Perhaps inspectors from your Federal Tax Service will point out that the cost of the object should have been divided by 7 (6 months + 1). However, their position is wrong. You can safely use the above method, since it is supported by the Ministry of Finance.
And one more thing. Do not forget that NPOs also do not pay tax on movable property registered as a fixed asset since January 1, 2013. This rule is spelled out in subparagraph 8 of paragraph 4 of Article 374 of the Tax Code of the Russian Federation.
PAGE 6
L. 5 INCOME TAX OF NON-PROFIT ORGANIZATIONS
2. Classification of income of NPOs
3. Determination of NPO expenses
1. NPO as a profit tax payer
A non-profit organization, being a payer of income tax, may not pay it. The Tax Code of the Russian Federation provides non-profit organizations with several opportunities for exemption from payment and reduction of tax payments.
Firstly, this may be income that is not taken into account when forming tax base on income tax. Secondly, there are benefits. Thirdly, there is the possibility of individual NPOs switching to special tax regimes.
Thus, an NPO has an obligation to pay income tax if it:
Registered as legal entity;
Has not switched to the special tax regimes permitted for it;
Has an object of taxation.
The object of taxation for income tax is the profit received by the taxpayer. The object of taxation of income tax arises in two cases:
1. upon receipt of income from sales, including:
Sales of goods, works, services in the course of business activities;
Sales of currency received as target proceeds;
Sale of fixed assets on a reimbursable basis;
One-time sale of goods, works, services, etc.
2. when receiving non-operating income.
2. Classification of income of NPOs
When determining taxable profit, income includes:
1. income from the sale of goods
2. non-operating income.
Revenue from the sale of goods is recognized as revenue from the sale of goods, as own production, and previously acquired, as well as proceeds from the sale of property rights.
Non-operating income is recognized as income that does not relate to income from sales, for example: from equity participation in other organizations, income from previous years, amounts of restored reserves, etc.
Income that is not taken into account when forming the tax base for income tax is divided as follows:
- Targeted revenues (except for excisable goods);
- Property received as part of targeted financing;
- Property received free of charge;
- Income from business activities of NPOs.
Particular attention should be paid to restrictions that may be associated with the organizational and legal form of an NPO, the lack of status of a charitable organization and other factors, as a result of which the specified income will not be withdrawn from the tax base for them.
Important for the activities of NPOs, there are articles that allow the withdrawal from the income tax base of funds received by the NPO both for the formation and use of endowment capital; this significantly expands the income sources of the NPO, necessary for the effective implementation of the goals of the statutory activities.
Income from business activities is allowed not to be included in the tax base for a very limited number of organizations. Of these, the largest group consists of religious organizations, the remaining deductions from the tax base indicate specific taxpayers: development bank state corporation, insurer of compulsory pension insurance, non-profit organizations providing services to the housing stock.
3. Determination of NPO expenses
Any expenses are recognized as expenses, provided that they are incurred to carry out activities aimed at generating income.
Expenses, depending on their nature, as well as the conditions for implementation and areas of activity of the taxpayer, are divided into expenses associated with production and sales, and non-operating expenses. If some costs can be assigned simultaneously to several groups with equal grounds, then the taxpayer has the right to independently determine which group they can be assigned to.
Costs associated with production and sales, are divided into the following elements:
Material costs;
Labor costs;
Amounts of accrued depreciation;
Other expenses.
Non-operating expenses include:
Expenses for the maintenance of property transferred under a lease agreement;
Negative exchange rate difference arising from the revaluation of property in the form of foreign currency values.
Negative difference when the foreign currency sales rate deviates from the official rate of the Central Bank of the Russian Federation;
Legal costs and arbitration fees;
Other expenses.
Costs associated with production and sales.
Material costsare the following taxpayer costs:
For the purchase of raw materials and (or) materials used in the production of goods;
For the purchase of tools, devices, equipment used for technological purposes;
For the purchase of works and services of a production nature;
Related to the maintenance and use of fixed assets.
Major labor costs include:
Amounts accrued at tariff rates official salaries, piece rates;
Accrual of incentive and compensatory nature;
Allowances, additional payments and payments;
Amounts of payments by employers under compulsory insurance contracts;
Other types of expenses.
Amounts of accrued depreciation.For income tax purposes, depreciable property is recognized as property, results of intellectual property and other objects of intellectual property that are owned by the taxpayer and are used to generate income, the cost of which is repaid by calculating depreciation. The useful life of such property is more than 12 months with an initial cost of 20,000 rubles.
4. Calculation and payment of income tax
The tax base is the monetary expression of profit subject to taxation. When determining the tax base, profit is determined by the cumulative total from the beginning of the tax period. If during a tax period the taxpayer incurred a loss in a given reporting period, the tax base is recognized as zero.
NPOs can pay income tax using the basic rate of 20% and rates for special tax bases.
In relation to the tax base determined by income received in the form of dividends, the following tax rates apply:
- 0% - for income received by Russian organizations in the form of dividends, provided that this organization owns by right of ownership at least 50% of the total amount of dividends paid and exceeds 500 million rubles;
- 9% - on income received in the form of dividends from Russian and foreign organizations by Russian organizations not listed above.
The following tax rates apply to the tax base determined for transactions with certain types of debt obligations:
1. 15% - on income in the form of interest on state and municipal securities, the condition of issue of which is to receive income in the form of interest;
2. 9% - on income in the form of interest on municipal securities issued for a period of at least three years before January 1, 2007, as well as on mortgage-backed bonds;
3. 0% - on income in the form of interest on state and municipal bonds issued before January 20, 1997 inclusive.
For NPOs carrying out educational and medical activities, a zero rate for income tax is provided, subject to the appropriate conditions. If such conditions are not met, a rate of 20% is applied. The zero rate can be applied until January 1, 2020. Those organizations that applied a preferential rate and abandoned it, or lost the right to use it, will be able to switch to it only after 5 years, from the year in which the tax is again calculated at a rate of 20%.
Tax payable at the end of the tax period is paid no later than the deadline established for filing tax returns for the corresponding tax period, that is, no later than 28 calendar days from the end of the corresponding reporting period. Tax returns are submitted no later than March 28 of the year following the expired tax period.
Non-profit organizations are those that do not have the goal of making a profit from their activities. Their work has a social orientation. They are created to perform any cultural, religious, scientific and other tasks. Let us consider in the article how accounting and tax accounting is carried out in a non-profit organization.
The activities of such associations are regulated by the chart of accounts, certain accounting regulations, as well as the following regulatory documents:
- Law on Accounting No. 402-FZ;
- Civil Code ( Civil Code of the Russian Federation);
- Law “On Non-Profit Organizations” No. 7-FZ of January 12, 1996;
- Law “On Public Associations” No. 82-FZ of May 19, 1995.
Features of accounting in non-profit organizations
Non-profit organizations (NPOs) maintain accounting and prepare reports in accordance with the legislation of the Russian Federation. To maintain it, management is obliged to introduce the position of an accountant or draw up an agreement for the relevant services with another company.
Operations related to the activities prescribed in the Charter and entrepreneurship are carried out separately. Income and cost accounts are presented in the table.
Unlike commercial companies, an NPO engaged in entrepreneurship does not have the right to distribute the income received during the period between participants. Profits must be used exclusively to fulfill the statutory goals of the association. The following entry occurs in the accounting:
Dt 90 Kt 99 - reflects the profit received at the end of the reporting period.
At the end of the year 99 close:
Dt 99 Kt 84 - taken into account net profit per year;
Dt 84 Kt 86 - financing of statutory work.
If the commercial activities of the NPO resulted in losses, make the following entries:
Dt 99 Kt 90 - loss for the period (month) is taken into account;
Dt 84 Kt 99 - annual loss is reflected.
The loss is covered from certain sources. For example, from the reserve fund, from last year’s profit, additional investments of participants, etc.
The following entries take place:
Dt 76 Kt 84 - the loss is repaid through membership fees;
Dt 86 Kt 84 - due to last year’s profit;
Dt 82 Kt 84 - from the reserve fund.
Example No. 1. Write-off of business results
NPO "Barrier" provides services for a fee. For 2016, income amounted to 614 thousand rubles, expenses - 389 thousand rubles.
Postings are made throughout the year:
Dt 62 Kt 90,614,000 - revenue from business is taken into account;
Dt 90 Kt 20,389,000 - the cost of services is written off;
Dt 90 Kt 99,225,000 - the result of the association’s work is taken into account.
At the end of the year, the accountant will write:
Dt 99 Kt 84,225,000 - profit written off;
Dt 84 Kt 86,225,000 - annual profit added to target amounts.
An NPO can take property into account as fixed assets if the following conditions are met:
- Application in the work established by the Charter, for the needs of management or entrepreneurship;
- Application for a period exceeding one year;
- Donation or transfer of ownership to other persons is not provided for.
The object is assessed by market value at the time of registration. The cost of fixed assets is reflected by the entry: Dt 08 Kt 86.
For the fixed assets of non-profit organizations, depreciation is charged instead of depreciation, as commercial companies. The data obtained is used in the calculation property tax with the annual average cost of fixed assets (Article 375 of the Tax Code of the Russian Federation).
The amount of depreciation is shown on the off-balance sheet account, and fixed assets are shown on the balance sheet at their original cost. Otherwise, the asset will not be equal to the liability. A feature of the accounting of fixed assets received from earmarked funds is the use of accounts. 83. In the balance sheet, its balances are reflected in the line “Real estate and movable property fund”.
Simplified taxation in non-profit organizations
NPOs have the right to apply simplified taxation. They can choose the simplified tax system upon creation by submitting a corresponding application to the tax office, or switch to the regime during the management process. Restrictions on the use of the simplified tax system are presented in the table.
Organizations on the simplified tax system submit a single simplified declaration to the inspectorate every year. They are exempt from paying income taxes, property taxes and VAT. NPOs use a simplified method to calculate the single tax. When taxed “by income”, it is equal to 6% of all income received. If the object is “income minus expenses” - 15% of the difference, and if there is no difference - 1%. (see → )
Revenues used for statutory purposes are not subject to a single tax. This applies to grants, membership fees, donations, and subsidies for targeted needs. Simplified NPOs are required to account for income and expenses of available target amounts separately.
Under this system, the manager has the right to perform the duties of the chief accountant and not resort to the services of other organizations for accounting. The transition to the simplified tax system is beneficial for non-profit organizations engaged in the sale of goods, work for a fee and having taxable property on their balance sheet.
Target income and its registration
The main component of accounting in non-profit organizations is the receipt and expenditure of target amounts. Their receipt is reflected in the account. 86 “Targeted financing”. Read also the article: → “”. Accounting is broken down by type of funds and sources of their receipt. According to Kt 86, the receipt of funds from funding sources is indicated in combination with accounts 76, 50, 51, 52. According to Dt 86 - the expenditure of money. To account 86 open sub-accounts by type of source of funds, funded programs, etc.
Members of the association can deposit money both into the cash register and into accounts. The procedure for receipt, size and timing of contributions must be prescribed in the Charter.
The income tax base does not include the following types of targeted income:
- Revenues for the needs stated in the Charter and for the maintenance of the association;
- Grants for scientific and sporting events, except professional ones;
- Participants' contributions;
- Free income from work and services under contracts;
- Rights to property passed by inheritance;
- Property rights to engage in charity;
- Funds received as a gift from departments for statutory work;
- Amounts allocated to departments. Target amounts are spent according to a pre-compiled estimate.
Reporting of non-profit organizations
The composition of the reporting forms differs depending on the types of activities of the NPO. The differences are shown in the table.
In addition to accounting, NPOs submit tax returns for the following:
Property tax is calculated based on its value according to the cadastre ( Art. 346.11 Tax Code of the Russian Federation). NPOs provide data on average number personnel and 2-NDFL certificates. NPOs submit Form 4-FSS quarterly to the social insurance fund, and RSV-1 calculations to the pension fund. Read also the article: → “”. Form 1-NKO is submitted to the statistical office. It contains data about the work of the organization. Short Form No. 11 is submitted annually and includes data on the availability and movement of fixed assets.
Three forms are submitted to the Ministry of Justice:
- OH0001 - data on the management and nature of the activities of the NPO;
- OH0002 - expenditure of target funds and use of assets;
- OH0003 - filled out on the website of the Ministry of Justice.
These forms are submitted only by those organizations whose annual receipts exceed 3 million rubles, there are receipts from foreign individuals and companies, or if there are foreigners among the NPO participants.
Accounting for funds in accounts
To record, store, and use cash, NPOs must use cash register. The cash balance limit is mandatory and is pre-agreed with the credit institution providing services to the entity.
Cash transactions are carried out using cash registers if the organization is engaged in trade or provides services. To accept contributions, donations, and other receipts from individuals, cash register equipment is not needed. Cash transactions are processed using unified forms documents.
NPO participants deposit money into the cash register or into the organization’s account. This procedure must be determined by the head or the Charter of the association.
Example No. 2. Cash inventory in non-profit organizations: postings
In an NPO, a surplus was identified during the inventory of the cash register. The accountant attributed it to the increase in income and made the following entries:
Dt 50 Kt 91. 1- surplus detected;
Dt 91.1 Kt 91.9 - profit for the reporting period is taken into account;
Dt 91.9 Kt 99 - financial result is taken into account;
Dt 99 Kt 68 - income tax accrued;
DT 99 Kt 86 - profit from surplus added to target amounts.
Accounting for intangible assets
Intangible assets (IMA) are accounted for in non-profit organizations on the basis of PBU 14/2007. When accepting them for accounting, the period of planned use for solving the statutory tasks of the organization is established. This period is subject to annual review and clarification. If there are adjustments, they are reflected in accounting and reporting forms at the beginning of the year as changes in estimates.
Depreciation on intangible assets is not accrued in non-profit organizations, even when they are used in commercial activities ( clause 24 PBU 14/2007). If intangible assets are acquired using business income, then depreciation is allowed.
For example, when creating your own computer program the wiring will be as follows:
Dt 08.5 KT 10, 70, 69 - the costs of creating the product are taken into account;
Dt 04 Kt 08.5 - the program is registered as an intangible asset;
Dt 86 Kt 83 - target amounts were used to create intangible assets.
Postings and decoding of operations
Account 86 is used in the following main business transactions.
| Debit | Credit | Explanation of the operation |
| 86 | 20, 26 | Target amounts spent |
| 83 | Amounts spent are included in additional capital | |
| 98 | Target amounts added to future expenses | |
| 07 | 86 | Equipment for statutory events taken into account |
| 08 | Contribution to non-current assets reflected | |
| 10, 11 | Materials (animals) were capitalized as a target receipt | |
| 15 | Inventory taken into account for events according to the Charter | |
| 20 | The main production facility was received | |
| 41 | Goods transferred for targeted programs are taken into account | |
| 76 | Financing accrued |
Answers to common questions
Question No. 1. In what cases should an NPO pay VAT?
If the NPO is engaged in business with transactions subject to VAT. For example, sells goods subject to this tax. In this case, the tax is paid regardless of the purpose of using the income from the sale.
Question No. 2. Does an NPO have the right to deduct VAT on products purchased for commercial activities?
Yes. But, if an NPO has both taxable and non-taxable transactions, then in order to accept tax as a deduction, it must keep separate records of them ( Art. 149, 170 Tax Code of the Russian Federation). If this requirement is not met, then accepting the tax as a deduction may result in tax penalties for underestimating the tax.
Question No. 3. The NGO transferred funds to military widows. Should she withhold personal income tax on these amounts?
If the persons who received assistance are not on the company’s staff, then personal income tax must be withheld ( clause 3 art. 217 Tax Code of the Russian Federation). If this is not possible, for example, goods were issued as assistance, you must notify the tax office within a month.
Question No. 4. Is the sale of assets previously accepted as a gift subject to income tax?
Yes. Valuables received as a gift from other persons (organizations) for targeted events are not subject to income tax. When they are sold, income is generated, and the cost of the sold property cannot be included in the expenses for reducing the tax base ( Art. 247 Tax Code of the Russian Federation).
Question No. 5. What is limit value cash payments between organizations?
Within the framework of one agreement, the limit for cash payments is 100 thousand rubles. For settlements with individuals given limit does not apply.
So, accounting in non-profit associations has its own characteristics. It should be conducted separately for target and commercial activities. This will help you calculate taxes correctly and avoid problems with the tax office.
