How to pay corporate property tax

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

What is charged with contributions and at what rate, who is exempt from paying them and what are the benefits.

What is corporate property tax

Corporate property tax is a payment for the right to own and use real estate. This is a regional fee, the main parameters for it are determined by the authorities of the subject within the framework set by federal law.

What property is taxed

Now we are talking exclusively about real estate. Previously, movable property was also taxed, since 2019 this norm has been canceled.

You will have to pay not only for objects that are used independently. If the organization transferred the property into temporary possession, trust management, received it under a concession agreement or contributed to joint activities under an agreement with other enterprises, the tax is also paid. In accounting, such real estate is reflected as "Fixed assets" or "Income investments in tangible assets" if the property is intended for rent.

Residential property is also taxed if it is not reflected in property, plant and equipment. From 2020, this applies to all objects that are otherwise subject to real estate tax of individuals. For example, you will also have to pay money for a garage or parking space.

No need to pay for:

• land, water and other natural resources;
• monuments of history and culture;
• nuclear installations;
• icebreakers, nuclear powered ships and nuclear service ships;
• space objects;
• ships registered in the Russian International Register of Ships.

Who pays corporate property tax

If the organization owns property, it pays this tax. It does not matter whether it is a Russian or a foreign enterprise. The main thing is that their real estate is located on the territory of the Russian Federation.

Organizations operating under special taxation systems are exempted from payment:

• On UTII, if the property is used for imputed activities and is taxed at the average annual cost. If the cadastral value is considered the tax base for real estate, then property tax is payable. We will tell you about which objects belong here below.
• On the simplified tax system, it is similar: you do not need to pay tax for property taxed at the average annual cost, and you need to pay it according to the cadastral value.
• Unified agricultural tax - the tax is not paid for real estate, which is used for the production, processing and sale of agricultural products and for the provision of services to agricultural producers. The rest is paid.

What is the rate for corporate property tax?

It is established by the regional authorities. At the same time, they are limited by the Tax Code of the Russian Federation Article 380. Tax rate by the Tax Code: when calculating the tax at the average annual value, the rate cannot exceed 2.2%, according to the cadastral rate -2%.

For the rest, the subjects are free to establish their own rules: to reduce rates for all or some categories of payers, and to exempt some of them altogether. You can find out the indicators valid in your region on the tax website.

What are the benefits for corporate property tax

Benefits are federal, that is, they are valid throughout Russia, and local - exclusively for the subject.

Federal benefits

The following are exempt from paying property tax:

• religious organizations;
• all-Russian public organizations of disabled people, if disabled among their members are at least 80%;
• pharmaceutical manufacturers - in relation to property that is used for the production of veterinary immunobiological drugs to combat epidemics and epizootics;
• prosthetic and orthopedic enterprises;
• collegia of lawyers, law offices and legal advice;
• organizations that have been assigned the status of state scientific centers.

A complete list is presented in 381 of the Tax Code of the Russian Federation, Article 381. Tax incentives article of the Tax Code.

Regional benefits

Set by the authorities of the subject. They can expand the federal list, but not narrow it down. You can find out the benefits for each region in the same place as the tax rate - at the Federal Tax Service.

How the tax base is calculated

Calculated at the average annual cost

For most properties, the tax base is their average annual cost. The calculations are made by the organization itself. To do this, you need to sum up the residual value of the property on the first day of each month with the same indicator for December 31, and then divide everything by 13. The formula will look like this (OS is the residual value, it is equal to the original cost minus depreciation):

Average annual cost = (OS January 1 + OS February 1 + OS March 1 + OS April 1 + OS May 1 + OS June 1 + OS July 1 + OS August 1 + OS September 1 + OS October 1 + OS November 1 + OS 1 December + OS December 31) / 13

To calculate the average value of real estate for a certain period, for example, for a quarter, its price is summed up on the 1st day of each month from this period of time with the same indicator for the last day of the last month. The resulting amount is divided by the number of months in the reporting period to which the unit is added. For the first quarter, the formula will look like this:

average cost _­= (OS January 1 + OS February 1 + OS March 1 + OS March 31) / 4

When calculating the cadastral value

There are objects for which the tax is compulsorily considered according to the cadastral, and not the average annual value. Their list is approved annually by regional authorities. Such a list may be Article 378.2. Features of determining the tax base, calculating and paying tax in relation to certain objects of immovable property get:

• administrative, business and shopping centers;
• non-residential premises in which offices, shops, catering and consumer services are located;
• real estate of foreign organizations that do not have permanent missions in Russia;
• residential property unaccounted for in fixed assets.

Accordingly, you can find this list on the website of the regional authority or by contacting officials directly.

To calculate the tax, the cadastral value of the object is taken as of January 1 of the year for which you are going to pay.

How to calculate corporate property tax

In general, the formula for calculating the tax for the year is extremely simple: the tax base is multiplied by the tax rate. But once a quarter it is necessary to make advance payments. So the final formula will look like this:

Tax amount = Tax rate × Tax base - Advance payments amount

The advance payment, when calculated at the cadastral value, is equal to a quarter of the annual tax amount. When calculating at the average annual cost, calculations are made according to the formula:

Down payment = Average cost for the period / 4 × Tax rate

When to pay corporate property tax

Terms are set by regional authorities, you can find them in local law.

When and how to submit reports on corporate property tax

From January 1, 2020, the declaration must be submitted once a year - until April 30 of the year following the reporting one. If the organization's real estate is located in the same region, you can select one inspection and submit a declaration to it, but only if the following conditions are met:

• the tax base is calculated according to the average annual value of the property;
• in the region there are no standards according to which the tax is distributed to local budgets.

Property reporting, for which the tax is calculated based on the cadastral value, is submitted to the inspection at the location of the property.