Does the municipality have the right to set the price without VAT? VAT in government procurement: Can the Customer reduce the contract price by the amount of VAT if you are on a “simplified” basis? Government contract with an individual

P. N. Kornilov, Head of the Expert Consulting Center of the Institute of Public Procurement of the Civil Registry of Civil Registration,

Yu. A. Shavylina, Leading Legal Adviser, Institute of Public Procurement, Civil Registry of Civil Registry

As a general rule, organizations and individual entrepreneurs using the simplified taxation system are not recognized as VAT payers. Therefore, when concluding a contract with an institution, they do not issue VAT to it (they do not issue invoices). As a result, a number of questions arise in practice. This material will help answer them.

Can the contract price be reduced?

If the initial price of the contract was formed by the customer taking into account VAT, and the winner is the person using the simplified system, to whose account should the savings (income) associated with the absence of the need for the parties to allocate in the contract and then transfer the amount of VAT to the budget be attributed?

The answer to this question follows from the provisions of the Law on Public Procurement, and is also confirmed by a number of letters from the Ministry of Economic Development of Russia, the Ministry of Finance of Russia and judicial practice.

According to the provisions of the Law on Public Procurement (Part 3 of Article 29 - for a competition, Part 10 of Article 41.12 - for an auction in electronic form and Part 8 of Article 47 - for requesting quotations), contracts are concluded on the terms stipulated by the notice (documentation ), at the contract price offered by the participant with whom such a contract is concluded.

At the same time, the Law on Public Procurement does not contain provisions on adjusting the contract price depending on the applicable taxation system. Thus, if a tender participant is not a VAT payer (for example, if he works on a simplified system), then when concluding a contract, when indicating the contract price, a dash is placed instead of the VAT amount. This is the main feature of contracts with participants using the special regime.

Moreover, when paying for goods supplied (work performed, services rendered), the contract price is not reduced by the amount of VAT and the goods supplied (work performed, services rendered) are paid at the price specified in the contract. These conclusions were made, among other things, in the resolution of the Federal Arbitration Court of the North-Western District dated August 25, 2010 No. A05-20849/2009.

In addition, concluding a contract in violation of the terms proposed by the person with whom such a contract is concluded may entail administrative liability under Article 7.32 of the Code of Administrative Offenses of the Russian Federation.

Confirmation of this can be found in the letter of the Ministry of Finance of Russia dated February 2, 2011 No. 03-07-07/02. It is noted there that “... when concluding contracts for the supply of goods, performance of work, provision of services for municipal needs with taxpayers who apply the simplified taxation system and, accordingly, are not taxpayers of value added tax, the contract price should be calculated without value added tax... "

In fact, in this case, the amount of value added tax “planned” by the customer when determining the initial contract price will be the additional income of the winner.

Thus, the contract must be concluded by the customer at the price of the winning bidder or request for quotation, regardless of the tax system applied by him. Adjustment (reduction) by the customer of the price of a contract concluded with a person applying the simplified taxation system is not provided for by the Law on Public Procurement.

This conclusion has been repeatedly confirmed in letters from the Ministry of Economic Development of Russia (see, for example, letters dated September 27, 2010 No. D22-1740, dated September 27, 2010 No. D22-1741).

Is it possible to limit the number of organizations using “simplified”?

In accordance with Article 8 of the Law on Public Procurement, anyone can be a participant in the procedure carried out by the customer, regardless of the organizational and legal form or form of ownership.

At the same time, the current legislation does not contain any restrictions on participation in tenders or requesting quotes for persons using the special regime. Consequently, such participants are allowed to participate in tenders and request quotations on an equal basis with other persons. At the same time, the establishment by the customer of any prohibitions or restrictions in this part is the basis for bringing the relevant official to administrative liability in accordance with Part 4 of Article 7.30 of the Code of Administrative Offenses of the Russian Federation.

But when should a participant declare that he has used a “simplified approach”?

There is no direct answer to this question in the Public Procurement Law. Therefore, it is necessary to focus on general rules, according to which an exhaustive list of information and documents that must be included in an application for participation in tenders or in a request for quotation is established by Articles 25, 41.8 and 44 of the Law on Public Procurement.

None of these articles provides for the possibility of customers requesting from participants documents declaring or confirming the taxation system they apply. Consequently, the participant, at his own choice, can provide this information to the customer as part of the application for participation in the procedure or after being recognized as the winner immediately before concluding the contract.

At the same time, in a competition and request for quotations, many participants, indicating in their application the proposed contract price, immediately add to it the words “VAT exempt” or “VAT 0 percent.” This is not mandatory, but immediately informs the customer about the presence of features that should be taken into account when concluding a contract with such a participant.

Is it possible to “align” sentences?

On the one hand, indeed, one immediately notices the fact that a company using the “simplified system” is in a more advantageous position than another participant in a competition, auction, or request for quotation.

For example, two quotation bids have been submitted. In one of them, the participant proposed a price of “110 thousand rubles. (VAT is not assessed based on the use of “simplified language”)”, and in the other – “118 thousand rubles, including VAT”.

Obviously, based on the general rules, the person who offers the lowest contract price, that is, the participant using the special regime, wins.

At the same time, the price of goods (works, services) offered by the second participant is actually even lower than the price of the first participant (excluding VAT - 100 thousand rubles).

This example shows a certain inequality of participants, but this situation follows from the tax legislation in the Russian Federation: “simplified” is a special tax regime aimed mainly at supporting small businesses.

The provisions of the Law on Public Procurement do not allow the customer, when choosing a winner, to adjust (cancel) the advantages of this taxation system provided for by the Tax Code of the Russian Federation.

For example, the rules for evaluating and comparing applications for participation in a competition, established by Decree of the Government of the Russian Federation of September 10, 2009 No. 722, do not provide for a change in the prices offered by participants by the amount of value added tax when applying the formula for calculating points according to the “contract price” criterion.

The procedure for considering and evaluating quotation bids, provided for in Article 47 of the Law on Public Procurement, also does not provide for any specific features for comparing quotation bids depending on the taxation systems used by participants.

That is, in all cases the “final” contract price offered by the participants is compared.

In particular, if a participant works on a simplified basis and indicates a price excluding VAT, his price offer is compared with the price proposed by a participant who is a VAT payer. Similar conclusions were also made in letters of the Ministry of Economic Development of Russia dated July 22, 2008 No. D05-2957, dated June 27, 2008 No. D05-2575.

Is it possible to determine the contract price without VAT?

Indeed, this makes it possible to compare the proposals of participants on equal terms, regardless of the taxation systems they use. On the one hand, calculating the initial (maximum) contract price and determining the procedure for forming the contract price (with or without taking into account the costs of transportation, insurance, customs duties, taxes and other obligatory payments) are within the competence of the customer.

At the same time, when forming the initial (maximum) contract price, it should be taken into account that this price is a maximum price and does not increase.

When concluding a contract, the price of such a contract cannot exceed the initial (maximum) contract price (lot price) specified in the notice of bidding or request for quotation.

And during the execution of the contract, the price is fixed and cannot be changed, except for cases of concluding a contract on the basis of clause 2.1 of part 2 of Article 55 of the Law on Public Procurement, as well as the cases provided for in parts 4.2, 6, 6.2 - 6.4 of this article (part 4.1 of Art. 9 of the Law on Public Procurement).

Consequently, if the customer indicates in the notice the initial (maximum) price excluding VAT, then he will not be able to conclude a contract with the winner who is a VAT payer, since an increase in the contract price by the amount of VAT will contradict Part 4.1 and Part 5 of Article 9 of the Public Procurement Law, and non-inclusion of VAT - Tax Code of the Russian Federation.

At the same time, as stated above, according to the Public Procurement Law, the customer is not given the opportunity to limit the participation in its tenders and requests for quotations of persons applying the simplified taxation system.

Thus, in fact, the customer must always determine the initial (maximum) contract price taking into account value added tax.

If the supplier changed the regime during the execution of the contract

As a general rule, the contract price is fixed and cannot change during its execution.
Supplied goods (work, services) are paid based on the price established by the contract (Part 4.1 of Article 9 of the Law on Public Procurement).

At the same time, the cost of payment established in the contract does not correlate with the actual costs of the winning bidder for the execution of the contract and is the customer’s obligation to pay the contract in the established amount if it is properly executed (clause 4 of the joint letter of the Ministry of Economic Development of Russia and the Federal Antimonopoly Service of Russia dated August 19, 2009 No. 13613- AP/D05).

In the case where a state (municipal) contract was concluded at a price that included added value, but subsequently the supplier switched to a special regime in the form of a simplified taxation system, the customer has no legal grounds to unilaterally change (reduce) the contract price.

The ban on such actions is established in Part 5 of Article 9 of the Law on Public Procurement, and liability for its violation is in Article 7.32 of the Code of the Russian Federation on Administrative Offenses.

Acceptable actions of the parties in this case will be the signing of an additional agreement to the contract, according to which the wording of the contract price changes: instead of “including VAT” it will be indicated “VAT exempt”. Please note: the total price of the state (municipal) contract will remain the same, the amount of the “former” value added tax will now go into the supplier’s income.

At the same time, when executing a contract, its price may be reduced by agreement of the parties without changing the quantity of goods, scope of work, services and other conditions of execution of the contract provided for in the contract. This is determined by part 4.1 of article 9 of the Public Procurement Law.

That is, with the consent of the supplier (performer, contractor), the customer can prepare an additional agreement to reduce the contract price by the amount of value added tax, thereby maintaining this savings in his budget.

As we can see, from the above it follows that a reduction in the price of the contract is possible immediately after it is signed by the parties, provided that the other terms of the contract do not change.

Important to remember

When concluding contracts for the supply of goods, performance of work, and provision of services for municipal needs with taxpayers using the simplified tax system, the contract price should be calculated without taking into account value added tax.

Hello, dear colleague! Lately, my support team has been receiving quite a large number of questions related to reducing the price of a government contract by the amount of VAT if the procurement participant is a “simplified”. As it turned out, this is a very painful issue for many suppliers who take part in . And in order to answer all the questions received at once, I decided to write an extensive and detailed article on this topic. ( Note: This article was updated on February 22, 2019).

1. What is VAT?

VAT- This is a value added tax, most often its size is 20%. This tax is levied on enterprises that are located on the general market and create additional market value. In simple terms, these are enterprises that sell goods (works, services) at a higher price than their cost. The tax is calculated from the difference between the cost of a product and its subsequent selling price, that is, revenue.

In Russia, VAT has been in effect since January 1, 1992. The procedure for calculating tax and paying it was initially determined by the law “On Value Added Tax”; since 2001 it has been regulated by Chapter 21 of the Tax Code of the Russian Federation.

For a better understanding of how VAT is calculated, I suggest you watch a short video:

To make VAT calculations easier, you can also use the online VAT calculator - //www.ndscalc.ru/ .

2. VAT when concluding a government contract

When concluding a contract within the framework of 44-FZ, our State acts as the state (municipal) Customer.

According to Part 1 of Article 34 of 44-FZ, the contract is concluded on the terms stipulated notice on the procurement or an invitation to participate in determining the supplier (contractor, performer), procurement documentation , application , the final offer of the procurement participant with whom the contract is concluded, except for cases in which, in accordance with 44-FZ, a notice of procurement or an invitation to participate in determining the supplier (contractor, performer), procurement documentation, application, or final offer are not provided. And according to Part 2 of Article 34 of 44-FZ, when concluding a contract, it is indicated that the contract price is fixed and is determined for the entire period of execution of the contract.

At the same time, the notice of procurement must necessarily contain information about (clause 2 of Article 42 of 44-FZ). According to the Ministry of Finance, presented in Letter No. 02-02-09/43300 dated August 29, 2014, the Customer, when preparing the price justification, may establish the conditions for the formation of the contract price (lot price), for example, with or without taking into account transportation costs, insurance, payment of customs duties, taxes and other obligatory payments.

According to clause 4 of Article 3 of 44-FZ, a procurement participant may be any entity regardless of its legal form, form of ownership, location and place of origin of capital or any individual , including registered as individual entrepreneur .

From the above rules it follows that organizations and individual entrepreneurs using special taxation regimes (Unified Agricultural Tax, UTII, STS, PSN) have the right to participate in government procurement on an equal basis with participants using the main taxation system (OSNO). That is, 44-FZ not installed no restrictions for procurement participants depending on the tax regime they apply. Accordingly, the Customer has no right to demand a recalculation of the price proposed by the participant. According to the provisions contained in Part 1 of Article 95 of 44-FZ, the price can not be reduced by the Customer without the consent of the contractor.

Thus, prohibitions or restrictions established by the Customer are grounds for bringing him to administrative liability on the basis of Part 4 of Art. 7.30 Code of Administrative Offenses of the Russian Federation.

Only if the procurement participant agrees, the Customer can prepare an additional agreement to reduce the contract price by the amount of VAT, thereby retaining these savings in his budget.

3. State contract with the supplier using the simplified tax system

In fact, the state (municipal) Customer must always indicate the initial (maximum) price of the contract, already taking into account value added tax.

If the supplier is not a VAT payer (for example, he is on the simplified tax system), then when concluding a contract, when indicating the contract price, instead of the VAT amount, a dash is placed, or “VAT is not subject to” is indicated.

Indeed, according to the general rule, organizations and individual entrepreneurs using the simplified taxation system (STS) are not recognized as VAT payers. Therefore, when concluding a contract with the Customer, they do not charge him VAT (they do not issue invoices).

Letter from FAS

Letter from the Ministry of Finance

In addition, there are decisions in favor of the supplier who is on the simplified taxation system - Resolution of the Federal Antimonopoly Service No. F03-3381/2013 of August 13, 2013.

4. Government contract with an individual

According to clause 2, part 13, article 34 of 44-FZ, the contract includes the following mandatory conditions: to reduce the amount payable The customer to a legal entity or individual, including one registered as an individual entrepreneur, for the amount of taxes, fees and other obligatory payments to the budgets of the budget system of the Russian Federation related to payment for the contract, if in accordance with the legislation of the Russian Federation on taxes and fees such taxes, fees and other obligatory payments are subject to payment to the budgets of the budget system of the Russian Federation by the customer.

If a contract is concluded with an individual, the contract includes a mandatory condition to reduce the amount payable to the individual by the amount of tax payments (personal income tax - 13%) associated with payment for the contract.

Thus, the Customer pays the individual an amount reduced by the amount of tax payments. This tax is transferred by the Customer to the appropriate budget in fulfillment of the duty of a tax agent when paying remuneration to an individual (Article 226 of the Tax Code of the Russian Federation).

I would like to draw your attention to the fact that we are talking specifically about the amount of payments to an individual, and not about a reduction in the contract price.

5. Conclusions

any procurement participant, including those applying a “special tax regime”, has the right to participate in procurement on a general basis;
the contract is concluded and paid by the Customer at the price of the winner, regardless of the taxation system applied by the latter;
the application of the “special regime” by the auction winner does not entail changes in the terms of the contract;
unilateral adjustment by the Customer of the contract price offered by the winner is not permitted.

But the judges’ opinions on this issue are diametrically opposed. Some judges follow the above conclusions and make decisions in favor of suppliers using the simplified tax system. And the other part takes the Customer’s side.

What actions does the procurement participant need to take?

Review the documentation and draft contract BEFORE submitting your application. If the Customer has not directly indicated in the documentation the possibility of concluding a contract “Without VAT”, then send him a request for clarification of the provisions of the documentation, ask him to clarify this point and make appropriate changes. Important point! If the purchase is carried out by the Customer at his own expense, and NOT from budgetary funds, and this is stated in the draft contract, then the Customer’s requirement to conclude a contract with VAT is legal. Currently, the courts adhere to this point of view.
If the purchase has already taken place and the Customer has sent you a draft contract with VAT, send him a protocol of disagreements and ask him to indicate the price “Without VAT”, because you are on the simplified tax system.
If the contract is signed with VAT, do not send the Customer an invoice.
Please indicate in your application that you are on the simplified tax system and are not a VAT payer. Additionally, you can attach to the application a Notice of transition to the simplified tax system (form No. 26.2-1) with a mark from the Federal Tax Service.
If the Customer makes a purchase at his own expense and indicates the price including VAT, then carefully weigh the pros and cons of participating in it. Most often, for simplifiers, participation in such a purchase will be unprofitable.

This concludes my article. I hope that the above material was useful to you. I wish you good luck and see you in the next issues.

P.S.: Like and share links to the article with your friends and colleagues on social networks.

Any participants have the right to participate in procurement, including those who use a simplified taxation system. Having won a tender and taken on the obligation to transfer VAT to the budget, the simplifier often ends up at a loss. So, before taking part in the competition, we recommend that you carefully study the procurement documentation. What taxpayers of the simplified tax system should remember - read the article.

It is no secret that many organizations want to become suppliers under government contracts. Persons applying the simplified taxation system are no exception. In this case, the contract price usually includes VAT. Many questions arise: is it necessary to allocate the amount of VAT in the contract, is the contract amount paid in full or minus VAT, can the contract be reduced by the amount of tax, does the customer have the right to demand a refund of the transferred VAT, is the simplifier obliged to issue an invoice, should the contractor remit the tax to the budget? The number of cases considered by the courts suggests that this problem is very relevant.

Competitive pricing

All applications for participation in competitions and electronic auctions conducted by state companies are strictly regulated by Federal Law No. 44-FZ dated 04/05/2013 “On the contract system in the field of procurement of goods, works, services to meet state and municipal needs” (hereinafter referred to as Law No. 44-FZ).

Any participants have the right to participate in procurement, incl. who apply a simplified taxation system (Part 4, Article 3 of Law No. 44-FZ). When making a purchase, the documentation establishes the initial (maximum) price of the contract (Part 6, Article 24 of Law No. 44-FZ). The contract is concluded on the terms stipulated by the notice of procurement or invitation to participate, documentation, application, final offer of the winner of the procurement (Part 1, Article 34 of Law No. 44-FZ). Almost the same rules apply when conducting an electronic auction (Part 10, Article 70 and Part 14, Article 78 of Law No. 44-FZ).

It is possible to increase or decrease (by no more than 10%) the quantity of goods, works or services at the customer’s suggestion. In this case, an increase or decrease in the contract price is allowed, but also by no more than 10%, by agreement of the parties (subparagraph b, paragraph 1, part 1, article 95 of Law No. 44-FZ).

In addition, the legislation provides for the right, by agreement of the parties, to reduce the contract price without changing other conditions, if the possibility of change was initially provided for in the procurement documentation and the contract (Part 1, Article 95 of Law No. 44-FZ). By the way, back in 2016 it was possible to increase the price of a contract if it was impossible to fulfill it due to circumstances beyond the control of the parties (no longer in force as of 01/01/2017, Part 1.1 of Article 95 of Law No. 44-FZ and Decree of the Government of the Russian Federation dated 03/14/2016 No. 191 “ On approval of the Rules for changing, by agreement of the parties, the contract execution period, and (or) the contract price, and (or) the unit price of goods, work, services, and (or) the quantity of goods, volume of work, services provided for in contracts, the execution period of which ends in 2016").

Officials' opinion

Let's consider the explanations of the Ministry of Economic Development of Russia, voiced in letters dated November 8, 2016 No. D28i-2922, dated August 19, 2016 No. OG-D28-9909, dated July 13, 2016 No. D28i-1775, etc.

The legislation provides equal conditions for participation in competitive methods of identifying suppliers (contractors, performers) to procurement participants, regardless of their legal form and taxation system. So any procurement participant, incl. which is exempt from paying VAT and applies the simplified tax regime, has the right to participate in procurement.

The contract is concluded and paid by the customer at the price of the winner of the procurement, regardless of the application of the winner’s taxation system.

In letter No. D28i-900 of the Ministry of Economic Development of Russia dated April 11, 2016, it was stated that the customer’s withholding of the amount of VAT when paying for a contract is unlawful, regardless of whether the supplier is a VAT payer.

The calculation of the price of a unit of goods is carried out taking into account the fact that the contract price cannot be higher than that proposed by the tender participant (letter of the Ministry of Economic Development of Russia dated June 10, 2015 No. D28i-1692).

In addition to the initial contract price, the customer sets requirements for pricing. Indicates that, as part of the application, the procurement participant must set the price with or without taxes and other obligatory payments. This conclusion is confirmed by letters from the Ministry of Economic Development of Russia dated June 17, 2016 No. OG-D28-8123, dated June 10, 2016 No. D28i-1483, dated April 18, 2016 No. D28i-1052, dated May 30, 2016 No. D28i-1397, dated May 30, 2016 No. D28i -1398, dated 04/04/2016 No. D28i-831, dated 03/15/2016 No. D28i-721, dated 06/10/2015 No. D28i-1656.

The contract price may be reduced by agreement of the parties, incl. for the amount of VAT if the supplier applies a different taxation system, subject to his consent to reduce the price and if this was provided for in the procurement documentation (letter of the Federal Antimonopoly Service of Russia dated August 21, 2014 No. ATs/33651/14).

If there is a need for types of work or materials not provided for in the contract, such procurement is carried out through a new competition (letter of the Ministry of Economic Development of Russia dated December 18, 2015 No. D28i-3725).

Law No. 44-FZ does not regulate issues related to the procedure for preparing estimates when concluding a contract with a contractor, operations for the implementation of work, services of which are not subject to VAT (letters of the Ministry of Economic Development of Russia dated July 13, 2016 No. D28i-1787, dated May 10, 2016 No. D28i- 1317).

Arbitrage practice

Judicial practice on this issue is quite diverse. There are many decisions that say that the customer’s withholding of the amount of VAT when paying for a contract is unlawful, regardless of the fact that the supplier is not a VAT payer.

The courts came to the conclusion that the contractor’s use of the simplified tax system cannot be a way for the customer to save money when paying for the results of work (Resolution of the Moscow District Court No. F05-4344/2016 dated April 28, 2016). The auditors' assertion that the customer paid costs (VAT) not provided for by the terms of the contract was recognized by the courts as unfounded, since they were included in the total cost of contract work (resolution of the Moscow District Arbitration Court dated April 28, 2016 No. F05-4344/2016).
Regardless of the applicable taxation system, the winner’s contract is concluded and paid by the customer at the price of the winning bidder and includes all taxes (decision of the Supreme Court of the Russian Federation dated October 1, 2015 No. 303-ES15-11466).

A situation may arise when the contractor won the competition, being a VAT payer, but during the contract period he switched to a simplified procedure. And in this case, the customer does not have the right to unilaterally reduce the contract price.

In the case where the contract was concluded at a price that included VAT, but subsequently the supplier switched to the simplified tax system, the customer has no legal grounds to unilaterally change (reduce) the contract price (resolution of the Moscow District Arbitration Court dated October 25, 2016 No. F05-14531 /2016).

The winner of the competition also does not have the right to demand that the phrase “including VAT” be excluded from the contract.

The courts came to the conclusion that the exclusion of the VAT line from the estimate when concluding a contract at the price offered by the auction winner would entail the impossibility of justifying the contract price, which is a violation due to the direct indication of Art. 22 and part 1 art. 64 of Law No. 44-FZ. This conclusion was made in the resolution of the Administrative Court of the North Caucasus District dated 06/09/2016 No. F08-3551/2016 (determination of the RF Armed Forces dated 10/13/2016 No. 308-KG16-12777).

We found a solution when the arbitrators allowed the simplifier to sign a contract for the full amount without allocating VAT. In this case, the winning bidder receives full payment for the contract and does not transfer tax to the budget.

The judges decided that if the winner is on the simplified tax system, then filling out the column “VAT is not provided” does not change the terms of the contract. Adjustment of the contract price by the customer is not allowed. Therefore, the court approved the terms of the municipal contract in terms of the price without deducting VAT from it (resolution of the AS of the West Siberian District dated November 19, 2014 No. F04-11932/2014 (determination of the Supreme Court of the Russian Federation dated March 16, 2015 No. 304-ES15-3471)).

If a simplified invoice is issued, the tax amount will have to be transferred to the budget.

Since the draft contracts placed by the customer during the auctions indicated that the cost of the work includes VAT, the state contract must be concluded on appropriate terms (resolutions of the Arbitration Court of the North Caucasus District dated July 21, 2016 No. F08-4781/2016 and Central District dated June 17, 2016 No. F10-1723/2016 (ruling of the Supreme Court of the Russian Federation dated August 25, 2016 No. 310-KG16-10142)). The contractor is obliged to transfer the specified tax to the budget, regardless of the taxation system applied (Resolution of the Volga Region Autonomous District of 02.04.2015 No. F06-21773/2013 (decision of the Supreme Court of the Russian Federation of 06.26.2015 No. 306-KG15-7929)).

Special rules under Law No. 223-FZ

Everything that we wrote above concerns procurement carried out by state companies under Law No. 44-FZ.

Meanwhile, a considerable number of procurements are regulated by Federal Law No. 223-FZ of July 18, 2011 “On the procurement of goods, works, services by certain types of legal entities” (hereinafter referred to as Law No. 223-FZ). This applies to customers with a state share of more than 50%, some unitary enterprises, organizations with regulated activities (energy, water supply, etc.), natural monopolies.

Law No. 223-FZ does not define procurement methods, conditions for their application and procedure. These issues must be regulated in procurement regulations approved by customers.

In particular, the procurement documentation must specify the procedure for pricing (with or without taking into account the costs of transportation, insurance, payment of customs duties, taxes and other obligatory payments) (Clause 7, Part 10, Article 4 of Law No. 223-FZ ). Thus, the customer has the right to independently determine the need to take into account VAT when forming the contract price. This conclusion is confirmed by letters from the Ministry of Economic Development of Russia dated August 19, 2016 No. D28i-2169, dated February 17, 2016 No. OG-D28-2554, dated December 7, 2015 No. OG-D28-15218, dated October 19, 2015 No. OG-D28-13364, dated August 28 .2015 No. D28i-2654.

So the customer has the right in the requirements for procurement documentation to prescribe a reduction in the contract price by the amount of VAT in the event of concluding a contract with a participant using the simplified tax system (decision of the Chelyabinsk OFAS Russia dated November 3, 2016 on complaint No. 77-03-18.1/2016).

Also, the procurement regulations prescribe the criteria for evaluating and comparing applications for participation in the procurement and the procedure for evaluating and comparing applications (clauses 12 and 13, part 10, article 4 of Law No. 223-FZ). One of the evaluation criteria may be price. In this case, the customer in the procurement regulations has the right to provide for a procedure for comparing the price offers of participants, taking into account the taxation system they apply. For example, the prices of participants’ offers excluding VAT can be used as a single basis for comparing price offers. This was indicated in letters from the Ministry of Economic Development of Russia dated May 26, 2016 No. D28i-1372, dated April 28, 2016 No. D28i-1114, dated February 17, 2016 No. OG-D28-2554, dated November 30, 2015 No. D28i-3499, dated September 30, 2015 No. D28i-2782.

As you can see, the contract based on the results of the procurement, the winner of which is the participant using the simplified procedure, is concluded on the terms determined by the procurement regulations (letter of the Ministry of Economic Development of Russia dated July 13, 2016 No. D28i-1834).

Consequences of issuing an invoice

You will not have to pay VAT if the buyer mistakenly highlighted the tax amount in the payment order. Officials also agree with this position (letter of the Ministry of Finance of Russia dated November 18, 2014 No. 03-07-14/58618).

If the simplifier personally issues an invoice to the buyer with the allocated amount of VAT, then the entire amount of tax will have to be paid to the budget (subclause 1, clause 5, article 173 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of Russia dated December 8, 2016 No. 03-11-06/2 /73239). Also, a VAT declaration is submitted for the specified amount (clause 5 of Article 174 of the Tax Code of the Russian Federation).

Since 2016, this tax has not been taken into account either in income or in expenses (clause 1 of Article 346.15 and subclause 22 of clause 1 of Article 346.16 of the Tax Code of the Russian Federation). Moreover, for this transaction, the simplifier will not be able to accept the “input” VAT, because despite paying the tax, he is not a VAT payer (letters of the Ministry of Finance of the Russian Federation dated May 21, 2012 No. 03-07-07/53 and dated March 23, 2007 No. 03-07-11/68, clause 5 of the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated May 30 .2014 No. 33).

Whether the buyer will be able to deduct the allocated VAT is also a big question. Officials previously noted that tax amounts presented by simplifiers are not accepted for deduction from buyers. This conclusion was made in letters of the Ministry of Finance of the Russian Federation dated October 5, 2015 No. 03-07-11/56700, dated May 16, 2011 No. 03-07-11/126, dated November 29, 2010 No. 03-07-11/456, Federal Tax Service of the Russian Federation dated May 6 .2008 No. 03-1-03/1925, Federal Tax Service of the Russian Federation for Moscow dated 04/05/2010 No. 16-15/035198. Later, tax authorities, under the pressure of decisions of the Constitutional Court of the Russian Federation (resolutions dated March 29, 2016 No. 460-O and dated June 3, 2014 No. 17-P), decided that an invoice received for a VAT-free transaction serves as the basis for the buyer to accept VAT amounts for deduction (letter of the Federal Tax Service of Russia dated September 23, 2016 No. SD-4-3/17871@). We think that this conclusion also applies to invoices issued by simplifiers, especially since the budget will not suffer from this, because VAT will be transferred.

Let's sum it up

By taking on the obligation to transfer VAT to the budget, the simplifier often ends up at a loss. So we advise you to carefully study the procurement documentation before taking part in the competition. If the competition is regulated by Law No. 44-FZ, then the entire trading procedure is contained in this law.

The Ministry of Economic Development of Russia, in its explanations regarding Law No. 44-FZ, relied on the following rules:

any procurement participant, incl. who applies the simplification has the right to participate in procurement;
the contract is concluded and paid by the customer at the price of the winner of the purchase, regardless of the application of the winner’s taxation system;
withholding by the customer of the amount of VAT when paying for a contract is unlawful, regardless of whether the supplier is a VAT payer;
the contract price may be reduced by agreement of the parties, incl. for the amount of VAT if the supplier applies a different taxation system.

If we summarize the judicial practice, it turns out:

the customer does not have the right to unilaterally reduce the contract price by the amount of VAT;
The winner of the competition does not have the right to demand that the phrase “including VAT” be excluded from the contract.

If the procurement is carried out in accordance with Law No. 223-FZ, then the customer’s procurement regulations should be studied. After all, a contract based on the results of a procurement, the winner of which is the participant applying the simplified tax system, is concluded on the terms determined by the procurement regulations. The customer has the right to independently determine the need to take into account VAT when forming the contract price.

If the seller has issued an invoice to the buyer with the allocated amount of VAT, then he is obliged to calculate and pay the specified tax to the budget and submit a declaration. In a simplified version, the VAT paid is not taken into account either in income or expenses. Also, under this transaction, the simplifier does not have the right to accept “input” VAT.

Dmitry Pirozhkov, leading consultant of the audit company MKPTs
Indeed, when issuing an invoice to the buyer, the simplifier is obliged to transfer VAT to the budget and submit the corresponding declaration to the tax authority at the place of his registration (clauses 4, 5 of Article 174, subclause 1 of clause 5 of Article 173 of the Tax Code of the Russian Federation).

In this case, the declaration must be submitted exclusively in electronic form via telecommunication channels through an electronic document management operator (clause 5 of Article 174 of the Tax Code of the Russian Federation). A declaration on paper will be considered not submitted (letter of the Federal Tax Service dated January 30, 2015 No. OA-4-17/1350@, Federal Tax Service of Moscow dated January 14, 2015 No. 13-11/000824). For violation of the deadline for submitting a declaration, a fine may be imposed (clause 1 of Article 119 of the Tax Code of the Russian Federation).

Accordingly, it should be remembered that the simplifier will also have to incur costs for purchasing, installing and updating licensed software for generating and submitting electronic reports, costs for connecting to the telecom operator’s system and obtaining a qualified electronic signature.

But first of all, a simplifier can be advised to carefully analyze the possibility of incurring expenses in a situation where, after completing a sales operation, the obligation to pay VAT to the budget will already arise, and funds for payment under the contract may not yet be received from the customer. In such a situation, the simplifier will have to pay the tax to the budget in full (without the possibility of applying tax deductions) with his own money, temporarily excluding it from his working capital.

Magazine "CALCULATION"

The price of cooperation

In order to conclude a profitable agreement, financing of which is provided from the budget, the company must be guided by the Federal Law of July 21, 2005 N 94-FZ “On placing orders for the supply of goods, performance of work, provision of services for state and municipal needs.”

A government contract is preceded by a competition for the right to conclude it. The order is placed by recipients of budget funds, including state and municipal unitary enterprises, budgetary institutions, and government bodies. Any organizations or individuals, including individual entrepreneurs, can join the competition for the tender (Clause 1, Article 8 of Law No. 94-FZ). At the same time, the legislator does not establish any restrictions on participation in auctions for persons applying a special tax regime. It turns out that any bidder for the order, including the “simplified” one, has the right to participate in the auction. This point of view is shared by the Ministry of Economic Development of Russia in its Letters dated November 14, 2011 N D28-565, dated October 12, 2011 N D28-452, dated September 15, 2011 N D28-380.

When conducting a tender, the customer establishes in the tender documentation the initial (maximum) price of the contract, as well as the requirements for its formation. For example, the condition for reflecting the price in the application: with or without taxes (clause 5, clause 4, article 22, clause 7, clause 3, article 41.6 of Law No. 94-FZ). As a rule, the customer requires the price including VAT.

Based on the results of the bidding, the contract is concluded with the winner on the terms specified by him, as well as in the tender documentation (clause 3 of article 29, clause 10 of article 41.12 of Law No. 94-FZ). As a general rule, the price of an agreement is fixed and cannot change during its execution (clause 4.1 of Article 9 of Law No. 94-FZ).

Hence, the conclusion of the officials seems quite reasonable: the government contract is concluded at the price of the winning bidder, while the use of the simplified tax system does not entail changes in the terms of the contract, that is, the customer is not allowed to adjust the price proposed by the “simplified” during the tender (Letter of the Ministry of Economic Development of Russia dated November 14, 2011 N D28 -565). The question arises, what should a company in a special regime do with VAT if it won the tender, but is exempt from paying VAT?

Opinion of the Ministry of Finance

Unfortunately, the explanations of representatives of the financial department on this issue are very contradictory. Just last year, the Ministry of Finance stated that organizations and individual entrepreneurs using the simplified tax system sell goods (work, services) without VAT. Therefore, when concluding contracts for municipal needs, the price should be calculated without VAT (Letters dated 08/22/2011 N 03-11-06/2/121, dated 02/02/2011 N 03-07-07/02).

Let me remind you that “simplified people” are recognized as VAT taxpayers only when importing goods, as well as within the framework of legal relations under a simple partnership agreement or trust management of property, as well as a concession agreement (clauses 2 and 3 of Article 346.11 of the Tax Code of the Russian Federation). In addition, “simplers” pay VAT when performing the functions of a tax agent (clause 5 of Article 346.11 of the Tax Code of the Russian Federation). In other cases, this tax is not calculated.

Officials, expressing their point of view, referred only to the general norms of the Tax Code. At the same time, special provisions governing the conclusion of government contracts were not taken into account in principle.

This year, the Ministry of Finance took into account the shortcomings. The result exceeded all expectations - now a diametrically opposite position has been set forth, according to which the price of a government contract is not reduced by the amount of VAT, and the goods supplied (work performed, services rendered) are paid by the customer at the price specified in the contract (Letter dated January 26, 2012 N 03-07 -11/21).

What will the court say?

Arbitration practice on the issue under consideration is determined in each specific case by the specifics of the tender documentation, as well as the terms of the contracts. Let's look at a few examples.

For example, the Resolution of the Federal Antimonopoly Service of the Moscow District of November 2, 2011 N A40-131937/10-59-1153 deserves attention (Decision of the Supreme Arbitration Court of the Russian Federation dated February 21, 2012 N VAS-1045/12 denied the transfer of the case to the Presidium of the Supreme Arbitration Court of the Russian Federation). The essence of the dispute is this: the “simplified” supplier entered into a government contract, the price of which included VAT. The customer paid for the goods in full, but considered that the supplier had inflated the cost of the products sold, increasing the cost of VAT (at the time of signing the contract, the latter was under the simplified tax system). Then the customer applied to arbitration with a claim for recovery of unjust enrichment (Article 1102 of the Civil Code of the Russian Federation). Having examined the materials of the case, the servants of Themis established: the supplier did not issue an invoice highlighting the amount of VAT, and also did not transfer the disputed amount of tax to the budget. At the same time, the judges did not find any grounds for including VAT in the cost of delivery. This means that the funds received by the “simpler” constitute unjust enrichment and are subject to return.

Also noteworthy are the conclusions formulated in the Decision of the Moscow Arbitration Court dated July 10, 2011 No. A40-17779/11-102-147. The dispute arose after payment, when not all the money arrived in the supplier’s account: the amount was reduced by the amount of VAT. The arbitrators studied the case and supported the government customer, since the draft contract, which was part of the tender documentation, and the contract itself had a special condition: if the supplier is exempt from VAT in accordance with tax legislation, the price of the government contract is reduced by the amount of the tax without changing the quantity of supplied products provided for in the contract .

In another trial by the Federal Antimonopoly Service of the Moscow District (Resolution dated September 20, 2011 N A40-477/11-67-4), the arbitrators again sided with the state customer.

The background to the dispute is as follows. The winner of the open auction in electronic form was the company using the simplified tax system. At the same time, the price of the government contract was set taking into account VAT. In connection with the application of the special regime, the supplier approached the government customer with a proposal to make changes to the government contract and indicate the amount of payment without the words “including VAT.” The state customer sent a request to the Office of the Federal Antimonopoly Service for Moscow (UFAS) to include the company in the register of unscrupulous suppliers, attaching to it a protocol on the evasion of the winning bidder from concluding a contract. The company that won the tender was forced to enter into an agreement at a price including VAT. However, having subsequently issued the primary documents and invoice without VAT, the “simplified” agent did not receive the same amount of tax from the customer. Going to court led nowhere. According to the arbitrators, the government customer has no debt subject to collection.

Dry residue

Let’s say that the government contract allocates the amount of VAT, but the organization is not ready for litigation. In this situation, the “simplifier” involuntarily becomes a VAT taxpayer, since upon completion of the government order he draws up all the primary documents, as well as an invoice with the allocated amount of this tax. In turn, the invoiced VAT amount is subject to payment to the budget at the expense of the company using the simplified tax system (clause 1, clause 5, article 173 of the Tax Code of the Russian Federation). The company will also have to submit a VAT return to the tax office (Letter of the Ministry of Finance of Russia dated October 23, 2007 N 03-07-11/512, Federal Tax Service of Russia for Moscow dated November 17, 2009 N 16-15/120314).

In addition, the VAT allocated in the state contract can cause a lot of trouble when calculating the tax base for the single tax. Firstly, it will not be possible to take this amount of collection into account when calculating the single tax (Letter of the Federal Tax Service of Russia for Moscow dated March 21, 2011 N 16-15/026297@). Secondly, the competent authorities believe that “simplers” who voluntarily issue invoices to buyers highlighting the amount of VAT must take into account income from sales with tax (Letters of the Ministry of Finance of Russia dated April 14, 2008 N 03-11-02/46, dated March 13, 2008 N 03-11-04/2/51 and Federal Tax Service of Russia for Moscow dated November 2, 2010 N 16-15/115179@). Although the servants of Themis are categorically against this approach (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated September 1, 2009 N 17472/08).

Competitive pricing

All applications for participation in competitions and electronic auctions conducted by state-owned companies are strictly regulated by Federal Law dated 04/05/2013 N 44-FZ “On the contract system in the field of procurement of goods, works, services to meet state and municipal needs” (hereinafter referred to as Law N 44-FZ).
Any participants have the right to participate in procurement, incl. who apply a simplified taxation system (Part 4, Article 3 of Law No. 44-FZ). When making a purchase, the documentation establishes the initial (maximum) price of the contract (Part 6, Article 24 of Law No. 44-FZ). The contract is concluded on the terms stipulated by the notice of procurement or invitation to participate, documentation, application, final offer of the winner of the procurement (Part 1, Article 34 of Law No. 44-FZ). Almost the same rules apply when conducting an electronic auction (Part 10, Article 70 and Part 14, Article 78 of Law No. 44-FZ).
It is possible to increase or decrease (by no more than 10%) the quantity of goods, works or services at the customer’s suggestion. In this case, an increase or decrease in the contract price is allowed, but also by no more than 10%, by agreement of the parties (subparagraph b, paragraph 1, part 1, article 95 of Law No. 44-FZ).
In addition, the legislation provides for the right, by agreement of the parties, to reduce the contract price without changing other conditions, if the possibility of change was initially provided for in the procurement documentation and the contract (Part 1, Article 95 of Law No. 44-FZ). By the way, back in 2016 it was possible to increase the price of a contract if it was impossible to fulfill it due to circumstances beyond the control of the parties (no longer in force as of 01/01/2017, Part 1.1 of Article 95 of Law No. 44-FZ and Government Decree of the Russian Federation dated 03/14/2016 No. 191 " On approval of the Rules for changing, by agreement of the parties, the contract execution period, and (or) the contract price, and (or) the unit price of goods, work, services, and (or) the quantity of goods, volume of work, services provided for in contracts, the execution period of which ends in 2016").

Officials' opinion

Let's consider the explanations of the Ministry of Economic Development of Russia, voiced in letters dated November 8, 2016 N D28i-2922, dated August 19, 2016 N OG-D28-9909, dated July 13, 2016 N D28i-1775, etc.
The legislation provides equal conditions for participation in competitive methods of identifying suppliers (contractors, performers) to procurement participants, regardless of their legal form and taxation system. So any procurement participant, incl. who is exempt from VAT and applies the simplified tax system, has the right to participate in procurement.
The contract is concluded and paid by the customer at the price of the winner of the procurement, regardless of the application of the winner’s taxation system.
In a letter from the Ministry of Economic Development of Russia dated April 11, 2016 N D28i-900, it was stated that the customer’s withholding of the amount of VAT when paying for a contract is unlawful, regardless of whether the supplier is a VAT payer.
The calculation of the price of a unit of goods is carried out taking into account the fact that the contract price cannot be higher than that proposed by the tender participant (letter of the Ministry of Economic Development of Russia dated June 10, 2015 N D28i-1692).
In addition to the initial contract price, the customer sets requirements for pricing. Indicates that, as part of the application, the procurement participant must set the price with or without taxes and other obligatory payments. This conclusion is confirmed by letters from the Ministry of Economic Development of Russia dated 06/17/2016 N OG-D28-8123, dated 06/10/2016 N D28i-1483, dated 04/18/2016 N D28i-1052, dated 05/30/2016 N D28i-1397, dated 05/30/2016 N D28i -1398, dated 04/04/2016 N D28i-831, dated 03/15/2016 N D28i-721, dated 06/10/2015 N D28i-1656.
The contract price may be reduced by agreement of the parties, incl. for the amount of VAT if the supplier applies a different taxation system, subject to his consent to reduce the price and if this was provided for in the procurement documentation (letter of the Federal Antimonopoly Service of Russia dated 08/21/2014 N ATs/33651/14).
If there is a need for types of work or materials not provided for in the contract, such procurement is carried out through a new competition (letter of the Ministry of Economic Development of Russia dated December 18, 2015 N D28i-3725).
Law N 44-FZ does not regulate issues related to the procedure for preparing estimates when concluding a contract with a contractor, operations for the implementation of work, services of which are not subject to VAT (letters of the Ministry of Economic Development of Russia dated July 13, 2016 N D28i-1787, dated May 10, 2016 N D28i- 1317).

Arbitrage practice

Arbitrage practice. The courts came to the conclusion that the contractor’s use of the simplified tax system cannot be a way for the customer to save money when paying for the results of work (Resolution of the Moscow District Court of April 28, 2016 N F05-4344/2016). The auditors' assertion that the customer paid costs (VAT) not provided for by the terms of the contract was recognized by the courts as unfounded, since they are included in the total cost of contract work (resolution of the Moscow District Arbitration Court dated April 28, 2016 N F05-4344/2016).
Regardless of the applicable taxation system, the winner’s contract is concluded and paid by the customer at the price of the winning bidder and includes all taxes (determination of the Supreme Court of the Russian Federation dated October 1, 2015 N 303-ES15-11466).

A situation may arise where the contractor won the competition, being a VAT payer, but during the contract period he switched to the “simplified” system. And in this case, the customer does not have the right to unilaterally reduce the contract price.

Arbitrage practice. In the case where the contract was concluded at a price that included VAT, but subsequently the supplier switched to the simplified tax system, the customer has no legal grounds to unilaterally change (reduce) the contract price (resolution of the Moscow District Arbitration Court dated October 25, 2016 N F05-14531 /2016).

The winner of the competition also does not have the right to demand that the phrase “including VAT” be excluded from the contract.

Arbitrage practice. The courts came to the conclusion that the exclusion of the VAT line from the estimate when concluding a contract at the price offered by the auction winner would entail the impossibility of justifying the contract price, which is a violation due to the direct indication of Art. 22 and part 1 art. 64 Law No. 44-FZ. This conclusion was made in the resolution of the Administrative Court of the North Caucasus District dated 06/09/2016 N F08-3551/2016 (determination of the RF Armed Forces dated 10/13/2016 N 308-KG16-12777).

We found a solution when the arbitrators allowed the “simplified” person to sign a contract for the full amount without allocating VAT. In this case, the winning bidder receives full payment for the contract and does not transfer tax to the budget.

Arbitrage practice. The judges decided that if the winner is on the simplified tax system, then filling out the column “VAT is not provided” does not change the terms of the contract. Adjustment of the contract price by the customer is not allowed. Therefore, the court approved the terms of the municipal contract in terms of the price without deducting VAT from it (resolution of the AS of the West Siberian District dated November 19, 2014 N F04-11932/2014 (determination of the Armed Forces of the Russian Federation dated March 16, 2015 N 304-ES15-3471)).

If a simplified invoice is issued, the tax amount will have to be transferred to the budget.

Arbitrage practice. Since the draft contracts placed by the customer during the auctions indicated that the cost of the work includes VAT, the state contract must be concluded on appropriate terms (resolutions of the Arbitration Court of the North Caucasus District dated July 21, 2016 N F08-4781/2016 and Central District dated June 17, 2016 N F10-1723/2016 (determination of the Supreme Court of the Russian Federation dated August 25, 2016 N 310-KG16-10142)). The contractor is obliged to transfer the specified tax to the budget, regardless of the taxation system applied (resolution of the Volga Region Autonomous District Court dated April 2, 2015 N F06-21773/2013 (decision of the Supreme Court of the Russian Federation dated June 26, 2015 N 306-KG15-7929)).

Special rules under Law N 223-FZ

Everything that we wrote above concerns procurement carried out by state companies under Law No. 44-FZ.
Meanwhile, a considerable number of procurements are regulated by Federal Law No. 223-FZ of July 18, 2011 “On the procurement of goods, works, and services by certain types of legal entities” (hereinafter referred to as Law No. 223-FZ). This applies to customers with a state share of more than 50%, some unitary enterprises, organizations with regulated activities (energy, water supply, etc.), and natural monopolies.
Law N 223-FZ does not define procurement methods, conditions for their application and procedure. These issues must be regulated in procurement regulations approved by customers.
In particular, the procurement documentation must specify the procedure for pricing (with or without taking into account the costs of transportation, insurance, payment of customs duties, taxes and other obligatory payments) (Clause 7, Part 10, Article 4 of Law No. 223-FZ ). Thus, the customer has the right to independently determine the need to take into account VAT when forming the contract price. This conclusion is confirmed by letters from the Ministry of Economic Development of Russia dated 08/19/2016 N D28i-2169, dated 02/17/2016 N OG-D28-2554, dated 12/07/2015 N OG-D28-15218, dated 10/19/2015 N OG-D28-13364, dated 28/08 .2015 N D28i-2654.
So the customer has the right in the requirements for procurement documentation to prescribe a reduction in the contract price by the amount of VAT in the event of concluding a contract with a participant using the simplified tax system (decision of the Chelyabinsk OFAS Russia dated November 3, 2016 on complaint No. 77-03-18.1/2016).
Also, the procurement regulations prescribe the criteria for evaluating and comparing applications for participation in the procurement and the procedure for evaluating and comparing applications (clauses 12 and 13, part 10, article 4 of Law No. 223-FZ). One of the evaluation criteria may be price. In this case, the customer in the procurement regulations has the right to provide for a procedure for comparing the price offers of participants, taking into account the taxation system they apply. For example, the prices of participants’ offers excluding VAT can be used as a single basis for comparing price offers. This was indicated in letters from the Ministry of Economic Development of Russia dated May 26, 2016 N D28i-1372, dated April 28, 2016 N D28i-1114, dated February 17, 2016 N OG-D28-2554, dated November 30, 2015 N D28i-3499, dated September 30, 2015 N D28i-2782.
As you can see, the contract based on the results of the procurement, the winner of which is the participant using the simplified system, is concluded on the terms determined by the procurement regulations (letter of the Ministry of Economic Development of Russia dated July 13, 2016 N D28i-1834).

Consequences of issuing an invoice

As a general rule, persons applying the simplified taxation system are not VAT payers. They do not issue invoices to their customers, do not keep books of purchases and sales, and carry out settlements with customers without highlighting tax amounts in the primary documents (clause 2 and clause 3 of Article 346.11 of the Tax Code of the Russian Federation). There are also exceptions (import of goods into the Russian Federation, tax agents, etc.), but we will not touch on them.
You will not have to pay VAT if the buyer mistakenly highlighted the tax amount in the payment order. Officials also agree with this position (letter of the Ministry of Finance of Russia dated November 18, 2014 N 03-07-14/58618).
If the “simplified” person personally issues an invoice to the buyer with the allocated amount of VAT, then the entire amount of tax will have to be paid to the budget (subclause 1, clause 5, article 173 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of Russia dated December 8, 2016 N 03-11-06 /2/73239). Also, a VAT declaration is submitted for the specified amount (clause 5 of Article 174 of the Tax Code of the Russian Federation).
Since 2016, this tax has not been taken into account either in income or in expenses (clause 1 of Article 346.15 and subclause 22 of clause 1 of Article 346.16 of the Tax Code of the Russian Federation). Moreover, for this transaction, the simplifier will not be able to accept the “input” VAT, because, despite paying the tax, he is not a taxpayer for VAT (letters of the Ministry of Finance of the Russian Federation dated May 21, 2012 N 03-07-07/53 and dated March 23, 2007 N 03-07-11/68, clause 5 of the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated May 30, 2014 N 33).
Whether the buyer will be able to deduct the allocated VAT is also a big question. Officials previously noted that tax amounts presented by “simplified” customers are not accepted for deduction from buyers. This conclusion was made in letters of the Ministry of Finance of the Russian Federation dated October 5, 2015 N 03-07-11/56700, dated May 16, 2011 N 03-07-11/126, dated November 29, 2010 N 03-07-11/456, Federal Tax Service of the Russian Federation dated May 6 .2008 N 03-1-03/1925, Federal Tax Service of the Russian Federation for Moscow dated 04/05/2010 N 16-15/035198. Later, tax authorities, under the pressure of decisions of the Constitutional Court of the Russian Federation (resolutions dated March 29, 2016 N 460-O and dated June 3, 2014 N 17-P), decided that an invoice received for a VAT-free transaction serves as the basis for the buyer to accept VAT amounts for deduction (letter of the Federal Tax Service of Russia dated September 23, 2016 N SD-4-3/17871@). We think that this conclusion also applies to invoices issued by “simplified” people, especially since the budget will not suffer from this, because VAT will be transferred.

Let's sum it up

By taking on the obligation to transfer VAT to the budget, the “simplifier” often ends up at a loss. So we advise you to carefully study the procurement documentation before taking part in the competition. If the competition is regulated by Law N 44-FZ, then the entire trading procedure is contained in this Law.
The Ministry of Economic Development of Russia, in its explanations regarding Law No. 44-FZ, relied on the following rules:
- any procurement participant, incl. who uses the simplified system has the right to participate in procurement;
- the contract is concluded and paid by the customer at the price of the winner of the purchase, regardless of the application of the winner’s taxation system;
- the customer’s withholding of the VAT amount when paying for the contract is unlawful, regardless of whether the supplier is a VAT payer;
- the contract price can be reduced by agreement of the parties, incl. for the amount of VAT if the supplier applies a different taxation system.
If we summarize the judicial practice, it turns out:
1) the customer does not have the right to unilaterally reduce the contract price by the amount of VAT;
2) the winner of the competition does not have the right to demand the exclusion of the phrase “including VAT” from the contract.
We advise you to try to offer the customer to sign a contract for the same price, but without allocating VAT. Sometimes this happens.
If the procurement is carried out in accordance with Law N 223-FZ, then the customer’s procurement regulations should be studied. After all, a contract based on the results of a procurement, the winner of which is the participant applying the simplified tax system, is concluded on the terms determined by the procurement regulations. The customer has the right to independently determine the need to take into account VAT when forming the contract price.
If the seller has issued an invoice to the buyer with the allocated amount of VAT, then he is obliged to calculate and pay the specified tax to the budget and submit a declaration. In simplified terms, VAT paid is not taken into account either in income or expenses. Also, under this transaction, the “simplifier” does not have the right to accept “input” VAT.

Opinion. Dmitry Pirozhkov, leading consultant of the audit company MKPTs
Indeed, by issuing an invoice to the buyer, the “simplified” person is obliged to transfer VAT to the budget and submit the corresponding declaration to the tax authority at the place of his registration (clauses 4, 5 of Article 174, subclause 1 of clause 5 of Article 173 of the Tax Code of the Russian Federation).
In this case, the declaration must be submitted exclusively in electronic form via telecommunication channels through an electronic document management operator (clause 5 of Article 174 of the Tax Code of the Russian Federation). A declaration on paper will be considered not submitted (letter of the Federal Tax Service dated January 30, 2015 N OA-4-17/1350@, Federal Tax Service of Moscow dated January 14, 2015 N 13-11/000824). For violation of the deadline for submitting a declaration, a fine may be imposed (clause 1 of Article 119 of the Tax Code of the Russian Federation).
Accordingly, it should be remembered that the “simplified” person will also have to incur costs for the acquisition, installation and updating of licensed software for generating and submitting electronic reports, costs for connecting to the telecom operator’s system and obtaining a qualified electronic signature.
But first of all, the “simplified” person can be advised to carefully analyze the possibility of incurring expenses in a situation where, after the implementation transaction, the obligation to pay VAT to the budget will already arise, and funds for payment under the contract may not yet be received from the customer. In such a situation, the “simplified” person will have to pay the tax to the budget in full (without the possibility of applying tax deductions) with his own money, temporarily excluding it from his working capital.