Essential terms of the transaction for the purchase and sale of goods with postpayment
The contract is not concluded if the essential terms of the transaction are not agreed upon (clause 1 of Article 432 of the Civil Code of the Russian Federation). For the delivery of goods, such essential provisions are:
- Name of product. It should be clear from the contractual obligations of the parties what the supplier supplies to the buyer.
- Quantity of commercial products.
The provisions that stipulate the price, delivery and payment terms are not essential, but are very important in the performance of obligations by both parties.
Installment payment and postpayment for commercial products: differences
The procedure and terms of payment are agreed upon by the parties to the transaction when establishing contractual obligations. The parties have the right to establish that the delivered goods are paid for on a post-payment basis. The terms of the deferred payment agreement must clearly define how long after the delivery of the goods to the buyer payment for the delivery is made.
Unlike a one-time postpayment, installment plans provide for the repayment of debt through several periodic transfers of funds (Article 488 of the Civil Code of the Russian Federation). Installment terms: the cost of the goods, the procedure, terms and amounts of transfer amounts are essential provisions of the contract for delivery in installments.
One, two, three, four, five... How to buy in installments?
When purchasing property, an organization can use various forms of settlements with the seller. She can pay for it either before receiving it from the seller or immediately after receiving it. In addition to these forms of payment, the Civil Code also provides for such a form as payment for goods in installments. However, this form of payment can cause tax “troubles” for the organization.
Monthly magazine “New Accounting” No. 3, 2007 I. Chvykov Civil legislation establishes a general rule regarding the timing of payment for goods: the buyer is obliged to pay for the goods immediately before or after the seller transfers them to him, unless otherwise provided by the Civil Code of the Russian Federation, another law or the purchase agreement. sales (Article 486 of the Civil Code of the Russian Federation). Articles 488 and 489 of the Civil Code of the Russian Federation allow the parties to include other conditions for payment for goods in the sales contract. These other conditions indicate cases of payment for goods after a certain time after their transfer to the buyer (deferred payment) and payment for goods in installments. That's what we'll talk about purchasing goods in installments. Moreover, the reason for such a conversation was once again given by the Ministry of Finance of Russia in a letter dated November 16, 2006 N 03-03-04/2/247. Let's make a reservation right away. In civil legislation, the term “goods” is used in relation to sales contracts. Indeed, for the seller, any thing intended for sale will be a product. From the point of view of tax and accounting, an acquired item can act in different guises: as a product (if it is purchased for further resale), inventory (if it will be used as a raw material in production) or a fixed asset (if it meets the established criteria). In this article we will limit ourselves to considering the situation when an organization purchases a product from a seller, which, according to the conditions of further use and relevant criteria, will be recognized by it in accounting and tax accounting as a fixed asset. PAYMENT IN INSTALLMENTS AND TRANSFER OF OWNERSHIP Under a sales contract, the seller undertakes to transfer the goods (fixed asset) into the ownership of the buyer, and the buyer undertakes to accept it and pay a certain amount of money for it (Article 454 of the Civil Code of the Russian Federation).
As a general rule, the buyer's ownership rights arise from the moment the seller transfers the fixed asset to him. Transfer is recognized as the delivery of this OS to the purchaser, as well as delivery to the carrier for shipment to the buyer. The fixed asset is considered delivered to the acquirer from the moment it actually comes into the possession of the acquirer (Articles 223 and 224 of the Civil Code of the Russian Federation) <*>. So, if the purchase and sale agreement for a fixed asset contains a condition that the seller provides the buyer with installment payment, then the relevant provisions of Art. 488 of the Civil Code of the Russian Federation on the buyer’s responsibility for non-payment of goods and on its pledge. What do the provisions of Articles 488 - 489 of the Civil Code of the Russian Federation say? They say that if the purchase and sale agreement does not specifically stipulate a condition on a special procedure for the transfer of ownership to the buyer (for example, only after full payment), then the fixed asset becomes the property of the buyer from the moment of actual receipt. That is, the presence in the contract of provisions on installment payment does not mean that ownership of the acquired fixed asset cannot pass to the buyer at the time of receipt of it from the seller. If the contract provides for a pledge of the transferred object, then this will be additional evidence that the ownership of it has transferred to the buyer. If the purchase and sale agreement does not contain a special condition on the special procedure for transferring ownership of the goods to the buyer (for example, only after full payment), then it becomes the property of the buyer from the moment of its actual receipt. HOW TO FORM THE INITIAL COST Let's assume that there are no special conditions in the contract and therefore ownership of the OS passes to the buyer at the time it is received from the seller. In this case, the purchasing organization must, guided by the relevant provisions of Chapter 25 of the Tax Code of the Russian Federation, recognize it as depreciable property, form the initial cost, determine the useful life and, from the next month after commissioning, charge depreciation on it. Moreover, if an organization uses the accrual method when calculating profits, then the terms of installment payment should not affect this in any way. After all, according to paragraph 1 of Art. 272 of the Tax Code of the Russian Federation, expenses accepted for profit tax purposes using the accrual method are recognized as such in the reporting (tax) period to which they relate, regardless of the time of actual payment. If an organization uses the accrual method of taxation of profits, then the terms of the purchase and sale agreement on installment payment do not affect the procedure for recognizing property as depreciable, the formation of its initial cost and the calculation of depreciation on it. For profit tax purposes, the initial cost of an acquired fixed asset is determined as the amount of expenses for its acquisition, construction, production, delivery and bringing it to a state in which it is suitable for use, with the exception of amounts of taxes that are deductible or taken into account as expenses in accordance with the Tax Code. RF (clause 1 of article 256, clause 1 of article 257 of the Tax Code of the Russian Federation). What does all of the above mean? And it means the following. The initial cost of a fixed asset consists of the cost of its acquisition, which is established by the parties in the purchase and sale agreement, delivery costs (this may be, for example, a separate agreement with a transport organization), installation or adjustment costs (they can also be carried out by specialized organizations for individual contracts) and other expenses associated with its acquisition. The amounts of all these expenses of the organization are known, since they are determined by contracts and, for example, acts of acceptance of work performed. In addition, without completing a certain set of work, an organization will often not be able to put the OS into operation. Thus, by the time the object begins operation, the organization will have already accurately determined the total amount of costs for the acquisition of the fixed asset, which will be its initial cost. But the fact of payment (in whole or in part) for the fixed asset itself and all this work is not important for the formation of the initial cost. By the time the operating system object begins operation, the organization already knows exactly the total amount of costs for its acquisition, which constitutes its initial cost. FIRST REVELATION OF THE MINISTRY OF FINANCE The organization asked the Russian Ministry of Finance: whether it can charge depreciation on an asset purchased in installments when determining the tax base for income tax, taking as the initial cost specified in the contract. The beginning of the letter from the Ministry of Finance dated November 16, 2006 N 03-03-04/2/247 with an answer to the question does not foreshadow anything unusual. It is quite rightly noted that the organization in its question did not indicate the moment of transfer of ownership of the fixed asset purchased in installments, since when taxing profits, depreciable property is recognized as property that belongs to the taxpayer by right of ownership. It is also rightly noted that if this is a real estate object, then in order to include it in the depreciation group it is necessary to document the fact of filing documents for state registration of rights to it. But then things get interesting. It turns out that installment payment is a form of payment in which the actual expenses incurred (incurred) associated with the acquisition of a fixed asset and determining its initial cost will be formed only upon final payment. But let me! How is the method of payment for the purchased OS related to the formation of its initial cost? After all, the buyer, in any form of payment, must pay the seller for the goods exactly the price that is established in the contract. Yes and Art. 489 of the Civil Code of the Russian Federation unambiguously states that an agreement for the sale of goods with the condition of payment by installments is considered concluded if, along with other essential terms of the purchase and sale agreement, the price of the goods, the procedure, terms and amounts of payments are indicated. That is, all the costs that will make up the initial cost are known. With any form of payment for the acquired fixed asset, all expenses that will make up the initial cost are known in advance. Indeed, an agreement with a provision for installment payment may provide for the buyer’s obligation to pay interest on the provided installment plan (Clause 4 of Article 488 of the Civil Code of the Russian Federation). But only in tax accounting, interest is always a non-operating expense (subclause 2, clause 1, article 265 of the Tax Code of the Russian Federation). As we see, this cannot interfere with the formation of the initial cost. So everything really depends on the moment of transfer of ownership of the OS object to the buyer. We showed above that the Civil Code of the Russian Federation establishes a general rule: ownership of the OS passes at the moment of its transfer to the buyer. But to ensure that ownership does not pass to the buyer, for example, until full payment is made, this must be specifically stated in the contract. In order for the seller to retain ownership, for example, until the buyer pays in full for the asset, a special provision must be included in the contract. The conclusion made by the Ministry of Finance is valid only for organizations that use the cash method of determining income and expenses. It is in sub. 2 p. 3 art. 273 of the Tax Code of the Russian Federation states that depreciation is allowed only for paid depreciable property. But, as a rule, expensive fixed assets or real estate are purchased in installments, and not every organization can use the cash method. By the way, the question was asked to the Ministry of Finance by the bank, which, according to Art. 273 of the Tax Code of the Russian Federation a priori does not have the right to apply the cash method! If the ownership of an asset has been transferred to an organization, then it has every right and opportunity to recognize it as depreciable property, form the initial cost, put it into operation and begin to charge depreciation on it according to the rules of Art. 259 of the Tax Code of the Russian Federation. The form of payment and the term of payment for the fixed asset do not affect this. SECOND REVELATION OF THE MINISTRY OF FINANCE The organization asked the Ministry of Finance whether it could write off up to 10% of the amount of capital investments made (the so-called depreciation bonus) at a time as expenses according to the rules of clause 1.1 of Art. 259 and paragraph 3 of Art. 272 of the Tax Code of the Russian Federation. By the time the facility is put into operation, the organization will make the first payment under the contract. Should she apply bonus depreciation to the payment amount? What do you think the Ministry of Finance responded? Well, of course, he replied that it is impossible to apply the depreciation premium to the first payment for the purchased fixed asset. From a formal point of view, this answer is correct. After all, the depreciation bonus really does not apply to the payment amount. Clause 1.1 art. 259 of the Tax Code of the Russian Federation establishes that an organization can include in expenses up to 10% of the original cost of fixed assets. And in accordance with paragraph 3 of Art. 272 of the Tax Code of the Russian Federation, the depreciation bonus is written off as expenses for the period to which the start date of depreciation of these fixed assets refers. But if it is impossible to apply the depreciation bonus to the amount of the first payment under the contract, then who forbids the organization to apply it to the initial cost of the fixed asset. We showed above that if ownership of an object has been transferred to the purchasing organization, it has rightly formed its initial cost and put it into operation, then nothing prevents it from starting to charge depreciation on it. Accordingly, depreciation amounts can be included in expenses when calculating income tax. And since the organization has every right to do all this, then it can include in expenses the depreciation bonus under clause 3 of Art. 272 of the Tax Code of the Russian Federation. If an organization, in accordance with the provisions of the Tax Code of the Russian Federation, has formed the initial cost of an asset, put it into operation, and began to charge depreciation on it, then it has the right to include a depreciation premium in expenses.
In this letter, the Ministry of Finance is thought-provoking and uses the accounting rules for fixed assets as arguments to answer the question on profit taxation. Thus, the Ministry of Finance says that in order to reflect the initial cost of an acquired fixed asset in tax accounting details, it is necessary that the fixed asset be accepted for accounting and put into operation. Well, you can't argue with that. But the next paragraph says that “according to clause 8 of PBU 6/01 “Accounting for fixed assets”, the initial cost of fixed assets acquired for a fee is recognized as the amount of actual costs of acquisition, construction and production, excluding VAT and other refundable taxes ( except in cases provided for by the legislation of the Russian Federation). And it is right. But what does this have to do with the rules established by Chapter 25 of the Tax Code of the Russian Federation? For further argument, what is the actual cost the organization must incur? It seems that the Ministry of Finance forgot the accounting rules it approved. After all, accounting is always conducted on an accrual basis. And in paragraph 6.2 of the no less important PBU 10/99 “Expenses of the organization” it is stated that when paying for purchased inventories and other valuables, works, services on the terms of a commercial loan provided in the form of deferred and installment payment, expenses are taken into account in the full amount of accounts payable. This once again suggests that the arguments given by the Ministry of Finance in letter dated November 16, 2006 N 03-03-04/2/247 are incorrect. If ownership of an asset has passed to the organization, but it has not yet been paid for, then the object is still taken into account according to the rules of PBU 6/01, and the full amount of accounts payable is reflected in settlements with the seller. When calculating the tax base for income tax using the accrual method, the same principles apply. As our famous satirist said, “You need to be more protective, guys, be more protective!..”.
<*> If a real estate property is purchased under a purchase and sale agreement, then the buyer’s ownership rights arise from the moment of state registration of this right.
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Features of compilation
When drawing up delivery conditions, the deferred payment clause of the agreement is included immediately if the parties agree on postpayment at the time of concluding the agreement.
This is the easiest situation to document. But the question arises: how to include a deferred payment in the contract after its conclusion? In this case, an additional agreement will be required. It is drawn up in writing and signed by both parties. If the transaction was initially certified by a notary, then the additional agreement should also be notarized.
Postpayment and commercial loan
When establishing postpayment in the contract, the supplier has the right to provide interest for deferred payment under the supply agreement. This type of contractual relationship is called a commercial loan (Article 489 of the Civil Code of the Russian Federation). Interest is accrued from the date of transfer of marketable products in the amount agreed upon by the parties to the transaction.
The terms of a commercial loan are specified in the contract for the supply of commercial products. If there is no provision for the accrual of interest, then the deferred payment of marketable products is not automatically recognized as a commercial loan (see, for example, Resolution of the Arbitration Court of the Central Federal District No. F10-322/2018 dated 04/09/2018).
Example: how to specify a deferment in an agreement on the terms of a commercial loan
Buying an apartment in installments: definition and features
The features of the purchase and sale of an apartment with installments are as follows:
- The seller acts as a lender.
- The buyer pays for the apartment not at once, but in installments.
For the buyer, this option of purchasing an apartment has many advantages: he does not need to take out a mortgage for the apartment and bear the costs associated with this procedure.
In particular, collect documents to confirm solvency, look for guarantors and additional security, and most importantly, overpay interest for the use of borrowed funds.
Not all buyers are able to obtain a mortgage loan even at higher rates.
Buyers may be attracted to an installment plan deal if they expect a large amount to arrive in the near future: for example, an annual bonus, proceeds from the sale of a car or a country house, etc. As part of such a deal, they do not have to wait until the entire amount is accumulated; they can deposit funds for real estate in stages, without fear that the apartment you like will be sold to someone else.
It is also becoming increasingly difficult for sellers to sell apartments due to declining demand. Therefore, offering a flexible payment scheme can attract buyers and sell real estate faster.
Sometimes sellers agree to pay in installments out of fear that the apartment may become cheaper in the near future.
Is installment beneficial?
We can say that such an installment deal is very beneficial for the buyer, while for the seller it has many risks. Therefore, the seller is primarily interested in the competent conduct of the transaction and the proper execution of the installment contract. Indeed, if the buyer fails to fulfill his obligations to make payments for the apartment, such an agreement will become an evidence base in court.
After concluding a deal with installments, the buyer has the right to live in the apartment he purchased.
At the same time, certain restrictions are established on the disposal of real estate: he will not be able to resell it until he has made all payments.
The apartment will be pledged to the seller until the debt is fully repaid, which creates certain guarantees for the former owner. In accordance with Russian law, such a transaction is called a mortgage transaction, although there will be no bank involved.
An apartment can be sold in installments on both the secondary and primary real estate markets. In the first case, the subjects of contractual relations are an individual, in the second - the developer and the buyer. But usually the installment plan is provided by the developer until the object is put into operation (for the construction period).
Therefore, in this case, an agreement for the purchase of an apartment in installments is not concluded (since the apartment itself does not legally exist yet), but an agreement for shared construction.
