ACCOUNTING AND TAX ACCOUNTING OF TRANSACTIONS UNDER CESSION AGREEMENTS

 AT THE ASSIGNOR

The seller charges VAT only on the amount of excess of the amount of income received during the assignment over the amount of the assigned monetary claim (clause 1 of article 155 of the Tax Code of the UK Federation). But this does not happen often, as receivables are usually sold at a price below the debt itself. When selling debt at a loss, the tax base is zero.

On the basis of paragraph 1 of Art. 155 of the Tax Code of the UK Federation, Small Business Accountants in Walsall it can be concluded that the seller's object of taxation arises only if he concedes the debt for goods (work, services) subject to VAT. Consequently, when it comes to non-taxable transactions, then the concession should not be the basis for calculating tax. But the Federal Tax Service does not agree with this statement. In a letter dated August 14, 2017, No. SD-4-3 / 15915 @, she explained that clause 1 of Art. 155 of the Tax Code of the Uk Federation, there are no exceptions, which means that when the initial creditor assigns a monetary claim under a service agreement that is not subject to VAT, the tax base is determined by the taxpayer in accordance with para. 2 p. 1 of Art. 155 of the Tax Code of the Uk Federation (for the difference between the amount of income received by the original creditor and the amount of the assigned claim).

AT THE ASSIGNEE

The assignee defines the tax base as the excess of the amount of income received by him during the subsequent assignment of the claim or termination of the corresponding obligation over the amount of expenses for the acquisition of the specified claim (clause 2 of article 155 of the Tax Code of the Russian Federation). The tax is calculated at the rate of 20/120 and is paid to the budget at the time of the conclusion of the assignment agreement or at the time of the termination of the corresponding obligation (clause 8 of article 167 of the Tax Code of the Russian Federation).

THE DEBTOR

The transfer of the right of claim from the seller to a third party is not reflected in the accounts of the debtor company. The tax base for VAT upon transfer of the right of claim from the seller to a third party does not arise for the debtor company.

ACCOUNTING

AT THE ASSIGNOR

Assignor company sold goods (works, services), but to wait for payment from the client did not and gave the right to demand of the other legal entity. The assignment of debt under the assignment agreement is reflected in the accounting of the assignor as follows.

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