Loan write-off due to statute of limitations

Nuances under the simplified tax system Under the simplified tax system, the exact timing of writing off accounts payable is not defined. Therefore, after drawing up an inventory act, write-off can be carried out:

• upon expiration of the statute of limitations;
• on the last day of the tax period.

In addition, under the simplified tax system, income does not include written-off advances for unfulfilled obligations, since these advances are taken into account in income at the time of their receipt. Important! A written-off “creditor” under the simplified tax system always refers to income, regardless of whether the “income” or “income minus expenses” mode is used. VAT restoration As a rule, an organization's accounts payable are formed due to the acquisition of goods (services, works) and receipt of advances.

The procedure for writing off a loan agreement (nuances)

Attention

It will not be possible to compensate the debt through losses upon write-off. All non-operating income must be included in the tax base.

Therefore, it is more expedient for an organization to extend the limitation period, if possible, which will allow the write-off to be completed during a period with a lower tax burden. Legal grounds According to Article 196 of the Civil Code of the Russian Federation, accounts payable are allowed to be written off after the expiration of the statute of limitations of three years. The countdown of the limitation period is determined by Article 200 of the Civil Code of the Russian Federation. Regardless of the reason for the appearance of accounts payable, the requirement to confirm it with primary documents is mandatory. This rule follows from Federal Law No. 402 of December 6, 2011 “On Accounting”. According to clause 18 of Article 250 of the Tax Code of the Russian Federation, in tax accounting, overdue accounts payable are included in non-operating income.

Collection of receivables

Overdue receivables arise due to a violation by the buyer of the terms of calculation for the provided assets.

Overdue accounts receivable are “accounts receivable” that are not paid within the time specified in the contract.

Any type of debt from an accounting point of view is the amount or volume of funds that did not arrive in the company's account from contractors for services provided or goods supplied, but who are ultimately available. Not only can financial assets be considered debt, but also property rights. In the control and management of debts, only those debts that correspond to many signs are borne in the category of overdue ones. The main sign is the expiration of payment terms in accordance with the contract. If the contract provided for the introduction of the amount of the debt in specific shares on a monthly basis, then allowing the next injection of funds also allows the debt to be considered late. In many ways, this understanding is due to the fact that a contract may provide penalties for violation of terms in a fixed amount or percentage ratio, in this case it is about penalties. Thus, overdue accounts receivable can bring additional income to the company. The same opportunities are also presented by accounts payable. The expiration of the conditions of the limitation period is the basis for the transfer of a belated creditor and receivables in the category of bad debts. The main sign of delay is the expiration of payment terms in accordance with the contract.

Basis of Bad Debt: Limitation Period Term and Elimination Basis for deeming a receivable as bad is that a bad debt is more difficult to collect and it is easier to copy it. For this purpose, the legislation provides the following grounds: When, according to the debt obligation, the limitation period has expired. According to the Civil Code, this is equal to three years. When the organizational debtor is liquidated or declared bankrupt. When, according to the debt manager of the obligation, proceedings have already been initiated. But after implementing all the actions provided by law, the police officer stops the proceedings, because such a debt cannot be recovered. The category of irrecoverable receivables is adapted to it. The sheriff's deputy may pass such a decision on the grounds of uncertainty about the debtor's location or whether he does not have property and money that are able to be used as a means of paying off the debt obligation.

Debt write-off. writing off loan debt

The write-off of accounts payable in accounting can be reflected in the following entries (Order of the Ministry of Finance dated October 31, 2000 No. 94n): Debit of accounts 60 “Settlements with suppliers and contractors”, 70 “Settlements with personnel for wages”, 76 “Settlements with various debtors and creditors", 67 "Settlements for long-term loans and borrowings", etc. - Credit to account 91 "Other income and expenses", subaccount "Other income" And the write-off of receivables upon expiration of the limitation period will be reflected as follows: Debit to account 91, subaccount " Other expenses" - Credit to accounts 62 "Settlements with buyers and customers", 71 "Settlements with accountable persons", 76, etc. If accounts receivable are written off from the funds of the previously created reserve, instead of account 91, account 63 "Provisions for doubtful debts" is debited .

Write-off of debts with expired statute of limitations

This is discussed in our article. In what cases can a loan agreement be written off by a company What is important to remember regarding taxation when writing off loan debt Results In what cases can a loan agreement be written off by a company As a general rule, a company can write off the funds due to it under a loan agreement if the existing debt has become belong to the category of hopeless. When can a debt be considered bad? As follows from paragraph.

2 tbsp. 266 of the Tax Code of the Russian Federation, this is possible when any of the following circumstances occur:

• The statute of limitations on the contract has expired.

Results

A company can write off a loan agreement in cases where either the statute of limitations under the agreement has expired, or the borrower company has been liquidated, or enforcement proceedings have ceased.

The company may include such debt as income tax expense. But you should be aware that there are nuances in tax legislation that may lead to the fact that the right to include an overdue loan in expenses will have to be proven in court.

It is important not to forget to follow the procedure: prepare a supporting document, conduct an inventory, draw up a debt inventory report, and then complete the write-off by drawing up an order from the manager.
You can find more complete information on the topic in ConsultantPlus. Full and free access to the system for 2 days.

What is the deadline for writing off a loan based on the statute of limitations?

Important

Written off debts are included in the financial results of the organization as part of other income (when writing off a creditor) and other expenses (when writing off accounts receivable). If a reserve was created for doubtful accounts receivable, such debt is written off against the reserve.

Info

Expenses will include only that part of the debt for which the reserve was not enough. Write-off of receivables and payables is possible even before the statute of limitations, if such debts are considered unrealistic for collection (repayment).

This is possible, for example, when the debtor is excluded from the Unified State Register of Legal Entities in the event of liquidation.

What is the statute of limitations for housing and communal services debts in Russia?

There is no special law or clearly established deadline for filing a lawsuit against a debtor. The management company (MC) or homeowners association (TSN) act at their own discretion. In principle, they can file a claim as early as the second month after the debt is incurred. But such cases are rare. Some organizations still file a claim in court when the statute of limitations for housing and communal services debts has long expired, hoping for the debtor’s legal illiteracy.

1. If a court order is received. A court order is issued by a judge, often a magistrate, in absentia, without the presence of the parties and third parties, when all the facts and evidence are present and the debt is confirmed. First, it is necessary to cancel the court order within ten days after it is issued. This is not difficult to do. In this case, the case will most likely be transferred to the district court. After the judge accepts the claim for consideration and sets a hearing date, the defendant files a petition to apply the statute of limitations. If the application is accepted, the trial is terminated.
2. If a court decision has already been made to collect utility debt from the defendant, this will be much more difficult. It is not easy to challenge a claim. There must be compelling reasons and reasons for this. When the fact of the debt is confirmed, but the defendant has not submitted a petition, the entire amount and a penalty are collected.

Statute of limitations on a loan: when will you not have to pay?

For example, the company did not pay its counterparties - did not pay for the goods supplied, did not repay the bank loan, did not return the loan to the founder. Another possible option is to receive an advance payment and then default.

For example, the company received payment, but did not ship the goods to the buyer or did not complete the agreed amount of work. The expiration of the statute of limitations does not allow the creditor to forcibly collect debts. Accordingly, unpaid loan debts for the organization become non-operating income. And if you simply write off such debt from accounting, it turns out that the organization has hidden part of the profit. And this is already a tax violation. What are the rules for writing off loan debts in 2020? What is it? Accounts payable are debts to suppliers, customers, budgets, funds, and other persons. Home → Accounting consultations → Accounting Current as of: February 20, 2020 We talked about what the statute of limitations is, how it is calculated, when it is suspended or interrupted, in our consultation. In this article we will talk about writing off debt for which the statute of limitations has expired. Why do you need to write off debt? Let us recall that one of the main tasks of accounting is the formation of complete and reliable information about the activities of the organization and its property status.

The presence in an organization of receivables or payables for which the statute of limitations has expired distorts the real picture of the organization’s property and obligations. After all, a debtor with an expired statute of limitations is a debt that the organization will no longer be able to collect in court.

Most often, debt forgiveness occurs when there is a debt to the founder. For example, one of the company's participants provided a loan to the company.

But in principle, any creditor has the right to forgive a debt. For example, if the debtor is in dire financial condition, the parties may agree on partial reimbursement of the debt. If the creditor believes that he will not be able to repay the full amount of the debt, then he can agree to partial repayment by forgiving the remainder of the debt.

Reflection by postings When debts are written off, income is generated. To display it, the account for writing off accounts payable in the debt adjustment is used - account 91 “Other income”. In this case, the company must remember that if, after 3 years (clause 1 of Article 196 of the Civil Code of the Russian Federation) from the moment the debt was formed, the loan has not been repaid, the company has the right to write it off. But only if the company has not filed a lawsuit against the debtor over the past 3 years. ATTENTION! If the debtor company acknowledges by its actions that it must pay the amount of the debt under the contract, the statute of limitations will be interrupted and will have to be counted again. For more information on writing off overdue debt, see the article “How to write off bad debt with an expired statute of limitations.”

• The company that borrowed the money was liquidated. At the same time, the company should understand that the legality of writing off the loan agreement is best confirmed by an extract from the Unified State Register of Legal Entities on the liquidation of the debtor.

The organization's overdue debts are subject to write-off. But it is necessary to comply with the deadlines and the correctness of registration from an accounting perspective.

Filing a claim does not interrupt the limitation period

Previously, the limitation period was also interrupted in cases where the creditor organization applied to it. Now, recognition of the debt remains the only basis for a break. Let us recall that recognition of debt can be confirmed, in particular, by the following actions:

Attention

Going to court no longer interrupts, but rather suspends, the period for writing off overdue debts

• written acknowledgment of the claim;
• partial payment by the debtor or with his consent by another person of the principal debt of the amounts of sanctions;
• payment of interest on the principal debt;
• amendment of the contract, from which it follows that the debtor acknowledges the existence of a debt;
• a written request from the debtor for a deferment or installment payment;
• acceptance of collection order.

Therefore, if your organization goes to court, this will only suspend the running of the period for the entire time from the date of application until the day the court decision enters into force.

Other grounds for suspending the limitation period (in particular, force majeure, recourse to a mediator) remained unchanged in the Civil Code.

The procedure for writing off the loan according to the statute of limitations

How to properly write off accounts payable in 2020? Incorrect write-off of overdue accounts payable becomes a reason for claims from the tax inspectorate.

To avoid possible additional charges, it is necessary to register the transaction correctly. How to write off overdue loan debt in 2020? Key Points One of the main tasks of accounting is to form a reliable picture of the financial condition of the organization. The presence of accounts payable for which the limitation period has expired distorts the real picture of the legal entity’s obligations. Accounts payable are the company's debts to third parties. According to the Tax Code of the Russian Federation, the legislator established that a company can include in tax expenses bad debts that could not be covered using the previously created reserve for doubtful debts. At the same time, as stated in paragraph 1 of Art. 266 of the Tax Code of the Russian Federation, such a reserve can be formed in relation to overdue payments under contracts for the sale of goods, works, and services. And the issuance of a loan by a company (not a bank) is neither the sale of goods nor the provision of services (letter of the Ministry of Finance of Russia dated May 10, 2011 No. 03-01-15/3-51). Consequently, regulatory authorities may consider that the right to write off overdue debts under sub. 2 p. 2 art. 265 of the Tax Code of the Russian Federation applies only to late payments for goods and services and does not apply to the issuance of loans. That is

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Writing off bad debt due to statute of limitations: what's new? (Moshkovich M.G.)

As you know, after the statute of limitations expires, a debt is considered bad. On this basis, accounts receivable are included in non-operating “profitable” expenses <1>, and accounts payable are included in non-operating income <2>. Last fall, the procedure for calculating the limitation period changed. Let's consider how amendments made to civil legislation can affect tax accounting. ——————————— <1> Subclause 2, clause 2, art. 265, paragraph 2 of Art. 266 Tax Code of the Russian Federation. <2> Article 18 250 Tax Code of the Russian Federation. The statute of limitations now has an upper limit. The general statute of limitations is still 3 years from the day the right was violated (for example, you were not paid for the delivery). True, provided that the violator is known to you <3> (previously there was no such requirement <4>). However, for organizations this amendment does not change anything, because you always know your counterparties. Note Sometimes the statute of limitations is less than 3 years <5>. For example, for disputes about cargo transportation, the limitation period is only 1 year <6>, for property insurance - 2 years <7>. However, unpaid debts cannot always be written off simply after 3 years from the date of their occurrence. It is important to remember that in certain cases the statute of limitations <8>: - is interrupted (then it is counted again each time after the break); — is suspended (during these periods the period does not run). As a result, write-off is possible not in 3 years, but later. In this regard, another amendment is interesting: it is established that the limitation period in any case cannot exceed 10 years from the date of violation of the right <9>. What does it mean? The opinions of the experts to whom we turned for clarification differed. From authoritative sources Abova Tamara Evgenievna, head of the sector of civil law, civil and arbitration process of the Institute of State and Law of the Russian Academy of Sciences, Doctor of Law, Professor “Established clause 2 of Art. 196 of the Civil Code of the Russian Federation, a 10-year period does not mean that you can go to court only within 10 years from the date of violation of the right. In my opinion, the rule contained in paragraph 2 of Art. 196 of the Civil Code of the Russian Federation, says only that the legislator introduced a limit for increasing the limitation period beyond the established clause 1 of Art. 196 of the Civil Code of the Russian Federation for a general term of no more than 10 years. However, this increased period can also be interrupted or suspended if there are grounds provided by law. Whether legislators wanted it or not, they simply introduced a limitation to establish longer special limitation periods (up to 10 years) compared to the general period of <10>.” However, from the explanatory note drawn up by the developers of Law <11>, it follows that legislators still sought to limit the general limitation period to an upper limit. Judge VAC expressed a similar opinion. From authoritative sources Svetlana Mikhailovna Petrova, judge of the Supreme Arbitration Court of the Russian Federation, candidate of legal sciences, associate professor “The introduction of a 10-year limitation on the limitation period will allow for greater clarity in economic turnover, since it excludes the protection of claims that arose significantly earlier than their implementation, 10 or more years ago. Such a 10-year period is counted from the moment of violation of the right, regardless of the presence of breaks and/or suspensions in the statute of limitations.” Ultimately, what does this amendment mean for an accountant? You continue to focus on a 3-year deadline for writing off overdue debt. So, let’s assume that the payment deadline under the contract is 02/17/2014. If the money was not transferred to you on time, then from 02/18/2014 we begin to count 3 years <12>. In general, they will expire on 02/18/2017. Consequently, if the debt is not repaid, then in the first quarter (February) 2020 it will need to be taken into account as expenses when calculating income tax. Note If you create a reserve for doubtful debts, then take into account in expenses only that part of the overdue debt that is not covered by the reserve <13>. But if the statute of limitations is repeatedly interrupted and/or suspended, then the 10-year limitation will come in handy. That is, you will be able to write off the debt if it cannot be collected within this period. Let’s assume that your debtor, having failed to pay for the delivery on time (02/17/2014), annually confirms in writing the existence of the debt. Such actions interrupt the running of the limitation period <14>. Therefore, every year the limitation period begins to count anew from the date following the day the letter was received. But if the money still does not arrive by February 18, 2024, the debt will need to be written off. Let us note that the possibility of writing off outstanding debts after the expiration of a 10-year period was also recognized by specialists from the Federal Tax Service for the Kamchatka Territory on the departmental website. For your information, the explanation of the Federal Tax Service for the Kamchatka Territory can be found on the Federal Tax Service website: https://www.nalog.ru/ -> Your region -> 41 Kamchatka Territory -> All news -> Tax legislation news -> On the limitation periods (24.12 .2013). Advice Before writing off a bad debt, consult with a lawyer to determine whether you have calculated the statute of limitations correctly. ——————————— <3> Clause 1 of Art. 200 Civil Code of the Russian Federation. <4> Clause 1 of Art. 200 of the Civil Code of the Russian Federation (as amended, valid until 09/01/2013). <5> Article 197 of the Civil Code of the Russian Federation. <6> Clause 3 of Art. 797 Civil Code of the Russian Federation. <7> Clause 1 of Art. 966 of the Civil Code of the Russian Federation. <8> Articles 202, 203 of the Civil Code of the Russian Federation. <9> Clause 2 of Art. 196 of the Civil Code of the Russian Federation. <10> Clause 2 of Art. 197 Civil Code of the Russian Federation. <11> Explanatory note to bill N 47538-6. <12> Clause 2 of Art. 200 Civil Code of the Russian Federation. <13> Subclause 2, clause 2, art. 265 Tax Code of the Russian Federation. <14> Article 203 of the Civil Code of the Russian Federation; clause 20 of the Resolution of the Plenums of the Armed Forces of the Russian Federation dated November 12, 2001 N 15, the Supreme Arbitration Court of the Russian Federation dated November 15, 2001 N 18. Filing a claim does not interrupt the statute of limitations Attention! Going to court now does not interrupt, but suspends the period for writing off overdue debt <15>. Previously, the limitation period was also interrupted in cases where the creditor organization went to court <16>. Now recognition of the debt remains the only basis for a break. Let us recall that recognition of a debt can be confirmed, in particular, by the following actions <17>: - written recognition of the claim; — partial payment by the debtor or with his consent by another person of the principal debt and/or amounts of sanctions; - payment of interest on the principal debt; - an amendment to the contract, from which it follows that the debtor acknowledges the existence of a debt; - a written request from the debtor for a deferment or installment payment; — acceptance of collection order. Therefore, if your organization goes to court, this will only suspend the running of the period for the entire time from the date of application until the day the court decision enters into force <15>. Note Other grounds for suspending the limitation period (in particular, force majeure, recourse to a mediator <18>) remained unchanged in the Civil Code. ——————————— <15> Clause 1 of Art. 204 of the Civil Code of the Russian Federation. <16> Article 203 of the Civil Code of the Russian Federation (as amended, valid until 09/01/2013). <17> Clause 20 of the Resolution of the Plenums of the Armed Forces of the Russian Federation dated November 12, 2001 N 15, the Supreme Arbitration Court of the Russian Federation dated November 15, 2001 N 18. <18> Article 202 of the Civil Code of the Russian Federation. The procedure for calculating the limitation period for “uncertain” claims . It happens that a specific date for the fulfillment of an obligation has not been established or is determined “on demand”. For example, your client made an advance payment, but had to make the final payment after receiving the order. In case of non-payment, the limitation period must be counted <19>: (if) in the demand to pay the debt you set a period (for example, 10 calendar days from the date of receipt of the order) - from the day when it expired (this was the case before); (if) you did not set a deadline for payment in your request - from the day you actually demanded it. Please note: according to the old rules, the period in such a situation was counted from the day when you had the very right to demand payment <20>. The difference can be significant. For example, the client received an order on February 10, 2014. From this date you have the right to demand full payment. In fact, the invoice for payment may be issued much later. From the date of the invoice you will now count the statute of limitations. Of course, we are talking about the date the invoice was sent to the debtor (if it differs from the date of preparation). Please note that a 10-year limitation period applies to such “uncertain” claims. ——————————— <19> Clause 2 of Art. 200 Civil Code of the Russian Federation. <20> Clause 2 of Art. 200 of the Civil Code of the Russian Federation (as amended, valid until 09/01/2013). Overdue debt cannot be offset The new edition of the Civil Code prohibits any extrajudicial actions with obligations for which the statute of limitations has expired (offset, foreclosure on pledged property, etc.) <21>. That is, you will not have the right to offset your debt to the counterparty against his old debt if 3 years have passed (provided that the statute of limitations has not been interrupted or suspended). Partners will not be able to do this with your overdue debts. Why is this important to you? According to the Ministry of Finance, a debtor cannot be considered uncollectible if there is a counter-payable debt to the same counterparty. The financial department considers the accounting of such debt as non-operating expenses to be unlawful, even if the statute of limitations on it has expired <22>. This position is more than controversial - in the Tax Code there is no such requirement for writing off bad debts. And the courts say that the expiration of the statute of limitations is quite sufficient <23>. And now, if during the inspection they deduct your expenses, indicating the possibility of offset, you can also refer to the prohibition in the Civil Code. Note The prohibition of offsetting overdue debts was in the Civil Code earlier <24>. But he formally required a declaration from the other party that the statute of limitations had expired. Now the ban is clear and unconditional. * * * Amendments to the Civil Code came into force on September 1, 2013 <25>. If you have debts for which the statute of limitations (calculated according to the old rules) has not expired as of this date, then it must be recalculated according to the new rules. Based on the results, debts are subject to write-off, the “new” statute of limitations for which as of 09/01/2013 <26>: - has expired; - exceeds 10 years from the date of violation of the right (including interruptions and suspensions). The issue of accounts payable is resolved in the same way. And keep in mind: if the “old” statute of limitations has expired as of September 1, 2013, but for some reason you have not written off the bad debt, then there is no need to recalculate the period according to the new rules. You just need to write off the debt. As for debts that, based on the new rules, as of September 1, 2013, are still “not hopeless,” write them off when the 3-year statute of limitations expires. But in any case, no later than 10 years from the date of violation of the right. ——————————— <21> Clause 3 of Art. 199 of the Civil Code of the Russian Federation. <22> Letter of the Ministry of Finance of Russia dated October 4, 2011 N 03-03-06/1/620. <23> Resolution of the Federal Antimonopoly Service ZSO dated November 10, 2008 N F04-6735/2008(15348-A67-37); FAS UO dated June 10, 2009 N F09-3863/09-C3. <24> Article 411 of the Civil Code of the Russian Federation; clause 10 of the Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated December 29, 2001 N 65. <25> Clause 1 of Art. 3 of the Law of 05/07/2013 N 100-FZ. <26> Clause 9 of Art. 3 of the Law of 05/07/2013 N 100-FZ.

Applying for loan forgiveness

To forgive a debt, the will of one creditor is sufficient (Clause 2 of Article 154, Article 415 of the Civil Code of the Russian Federation). Therefore, the participant can simply send a letter , indicating in it what obligation he forgives, in what amount and under what conditions. Instead of a letter, the borrower and lender can draw up an agreement (Clause 2 of Article 421 of the Civil Code of the Russian Federation).

Agreement on debt forgiveness under a loan agreement

N 1/07 dated 07/01/2010

Moscow January 31, 2011

Lender - Vesna LLC, represented by General Director I.I. Travkin, acting on the basis of the Charter, on the one hand, and Borrower - Vasilek LLC, represented by General Director V.V. Vasiliev, acting on the basis of the Charter, on the other hand , have entered into this agreement as follows.

1. The Lender forgives the Borrower the interest debt in the amount of 21,000 (Twenty-one thousand) rubles accrued under loan agreement No. 1/07 dated 07/01/2010 for the period 07/01/2010 - 01/31/2011, subject to the Borrower returning the loan amount within in the amount of 300,000 (Three hundred thousand) rubles. until 02/28/2011.

2. This agreement comes into force on the date of its signing by the parties.

Lender: Borrower:

Accounting for a forgiven loan from a borrower

According to the regulatory authorities, the amount of the forgiven loan in income for profit tax purposes, since in this case the benefit established by paragraph. 11 clause 1 art. 251 of the Tax Code of the Russian Federation (Letters of the Ministry of Finance of Russia dated January 14, 2011 N 03-03-06/1/11, dated October 14, 2009 N 03-03-06/1/661). But the amount of forgiven interest in non-operating income (Clause 2 of Article 248, paragraph 18 of Article 250 of the Tax Code of the Russian Federation). After all, the above benefit applies only to money (property) received free of charge, and the participant did not transfer the amount of interest to the “daughter”. In addition, the borrower previously took into account the amount of accrued interest in expenses (Subclause 2, clause 1, Article 265, clause 1, Article 269, clause 8, Article 272 of the Tax Code of the Russian Federation).

If the lender, a member of our organization, has forgiven us the loan along with interest, then no matter the size of his share, we will not have income for profit tax purposes (Subclause 3.4, clause 1, Article 251 of the Tax Code of the Russian Federation).

However, this position of the regulatory authorities is in fact fundamentally wrong. Benefit according to paragraphs. 11 clause 1 art. 251 of the Tax Code of the Russian Federation applies only to property received free of charge (Clause 2 of Article 38, paragraph 11 of clause 1 of Article 251 of the Tax Code of the Russian Federation; Article 128 of the Civil Code of the Russian Federation). As a result of forgiveness of any debt, property rights are transferred . But property rights for tax purposes do not relate to property (Clause 2 of Article 38 of the Tax Code of the Russian Federation). Therefore, this benefit cannot be applied to either the forgiven loan or forgiven interest. But there is no need to be upset. We hasten to reassure you - you can take advantage of another benefit.

Since the beginning of this year, a rule has appeared in the Tax Code of the Russian Federation allowing subsidiaries not to take into account in tax income any receipts from participants in order to increase its net assets. Forgiving the loan and interest on it by the participant increases the value of the subsidiary’s assets, since it reduces its accounts payable (Clause 1, 4 of the Procedure for assessing the value of the net assets of joint-stock companies). By the way, this benefit has a retroactive effect; it applies to legal relations that arose from January 1, 2007 (Part 2 of Article 4 of the Federal Law of December 28, 2010 N 409-FZ).

In accounting, the entire amount of forgiven debt (both loan and interest) is other income (Clause 7 of PBU 9/99 “Income of the organization”). And since these amounts are not taken into account in tax accounting, you must reflect a permanent tax asset (Clause 4, 7 PBU 18/02 “Accounting for corporate income tax calculations”).

Accounting for a forgiven loan from a lender

Forgiveness of a loan and the interest accrued on it is a free transaction for the lender. Therefore, it is impossible to take these amounts into account as expenses for tax purposes (Clause 16 of Article 270 of the Tax Code of the Russian Federation). It will not be possible to restore the amount of interest previously recognized in income.

If our loan includes interest, then we will neither be able to take this amount into tax expense nor restore the amount of interest previously recognized in income.

In accounting, the amount of receivables written off under a loan agreement is reflected as part of other expenses (Clause 11, 14.3 PBU 10/99 “Expenses of the organization”). And since the amount of forgiven debt is recognized as an expense in accounting, but not in tax accounting, then you must reflect a permanent tax liability.

Example. Accounting for a forgiven loan by the borrower and lender

Condition

Vesna LLC owns a 100% share in the authorized capital of Vasilek LLC. On 07/01/2010 Vesna LLC transferred money to Vasilek LLC under a loan agreement in the amount of 300,000 rubles.

The procedure for writing off a loan agreement (nuances)

for 6 months at 12% per annum with the condition of interest payment upon repayment of the loan. The agreement stipulates that for calculating interest, a month is taken to be 30 days. 01/31/2011 Vesna LLC forgave Vasilek LLC the entire debt under the loan agreement along with interest.

Solution

The following accounting entries will be made in the accounting of Vasilek LLC.

And the following accounting entries will be reflected in the accounting of Vesna LLC.

* * *

Keep in mind that forgiveness of a debt by one organization to another in an amount greater than 3,000 rubles, if the lender does not receive any economic benefit from it, is a donation (a void transaction) (Clause 1 of Article 166, Article 168, paragraph 4 p. 1, Article 575 of the Civil Code of the Russian Federation). However, until the court, at the request of an interested party (for example, a creditor or a participant in the lender), applies the consequences of the invalidity of this transaction, the forgiven debt is considered repaid and does not need to be restored.

How long does it take for a loan to be written off?

However, this situation rarely happens. Typically, banks do not delay and promptly file a lawsuit against the unscrupulous payer or transfer the overdue loan to a collection company. Therefore, do not plan that you will be able to wait until the debt is written off; the creditor will try by any means to return his funds. Read more about how debt collectors act in the event of purchasing a debt from a bank, and about the procedure for your actions, here.

Interesting: Electronic queue to receive vouchers to a sanatorium for pensioners

If you have some difficulties that prevent you from hassle-free loan repayment, then you need to take certain measures. If the payment is overdue by up to 30 days, you don’t have to worry too much about the state of your credit file. Many banks forgive such minor violations and issue new loans. You will find the most attractive offers in this article.

Accounting for a subsidiary

The main founder of Meteor LLC is Jupiter LLC. Its share in the authorized capital is 52 percent.

Carefully! It is safer to issue loans at interest. Otherwise, inspectors may assess additional income tax to the founder.

On March 20, 2014, Jupiter LLC provided a loan to its subsidiary in the amount of RUB 300,000. at 9 percent per annum for a period of three months. According to the terms of the agreement, interest is paid along with the return of the principal amount on June 20, 2014.

Meteor LLC did not fulfill its contractual obligations on time. On June 20, the management of Jupiter LLC decided to forgive the debt, including the amount of interest on the loan.

The accountant of Meteor LLC made the following accounting entries. On the day of receipt of borrowed funds, March 20:

DEBIT 51 CREDIT 66

• 300,000 rub. — a loan was received from the founder.

Guided by the letter of the Ministry of Finance of Russia dated February 17, 2014. No. 03-03-06/1/6387), the accountant takes interest into account evenly at the end of each month. The same procedure is established in the accounting policy for accounting purposes. Therefore, on March 31, the accounting entry was as follows:

DEBIT 91 subaccount “Other expenses” CREDIT 66

• RUB 813.70 (RUB 300,000 x 9%: 365 days x 11 days) - interest accrued for March.

On April 30 and May 31, the postings were the same. But the amount of interest for April amounted to 2219.18 rubles. (RUB 300,000 x 9% / 365 days x 30 days). And for May - 2293.15 rubles. (RUB 300,000 x 9% / 365 days x 31 days). Meteor LLC was supposed to return the money to the founder on June 20. On this day, the accountant will record interest in the amount of 1,479.45 rubles. (RUB 300,000 x 9%: 365 days x 20 days).

Meteor's accounting policy states that interest on borrowed obligations is included in the tax base based on the refinancing rate increased by 1.8 times (clause 1.1 of Article 269 of the NKRF). When calculating income tax, the accountant has the right to take into account the entire amount of interest, since in the loan agreement the rate is less than the maximum permissible - 14.85 percent (8.25% x 1.8).

Note! Interest on loans and borrowings in tax accounting is standardized. The limit value is calculated based on the refinancing rate increased by 1.8.

On the date of debt forgiveness, June 20, the following entries appeared in the accounting records:

DEBIT 66 CREDIT 91 subaccount “Other income”

• 300,000 rub. — the amount of forgiven debt on a loan received is included in the organization’s other income;

DEBIT 66 CREDIT 91 subaccount “Other income”

• 6805.48 rub. (813.70 2219.18 2293.15 1479.45) — interest on the forgiven debt was included in other income.

When calculating income tax, Meteor LLC does not take into account the forgiven loan on the basis of subparagraph 11 of paragraph 1 of Article 251 of the Tax Code of the Russian Federation. Therefore, a permanent difference arises, as well as a corresponding permanent tax asset:

DEBIT 68 subaccount “Calculations for income tax” CREDIT 99 subaccount “Permanent tax assets”

• 60,000 rub. (RUB 300,000 x 20%) - a permanent tax asset is reflected.

The company will include the amount of interest in non-operating income. And since Meteor LLC previously reflected them in expenses, the company will not overpay income tax in the end.

About the company Firm Zhilservice

For 10 years, our company has been successfully operating in the capital’s legal services market. Fulfillment of such orders as registration of companies in Moscow , liquidation of enterprises , sale of ready-made companies is brought to automation by experienced specialists and takes the shortest possible time. Over the past 10 years, despite fundamental changes in the legislation of the Russian Federation, we have been able to take a leading position in the field of legal services in the Moscow region, which we maintain to this day.

You have questions? You can ask them by phone (495) 729 - 59 - 39 , 945 - 83 - 70 , send them from our website to an experienced specialist who will promptly contact you, or come to our office, where you will be provided with comprehensive advice.

18 Aug 2020 glavurist 387

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