Partnership agreement: taxes. Commercial real estate investment. Increase the profit of the business owner without one-day, cashing
For a long time, one-day firms were the main tax optimization tool for entrepreneurs. In recent years, the state has tightened control over such schemes. Meanwhile, the Civil Code of the Russian Federation contains a large number of other designs, the use of which allows for tax savings. With a proper approach, this savings may be slightly less than with aggressive VAT optimization through “cashing out”. I will show this by the example of a real business case (the conditions are slightly changed from the real ones).
Two investors decided to “chip in” and buy real estate in order to extract rental income. Terms of a transaction:
the cost of the object is 25 million rubles. (incl. VAT);
the facility has tenants with long-term contracts and a price determined by years, including VAT (federal tenants);
depreciation group of an object - VIII (depreciation period 21 years);
the property is not included in the list of real estate objects (paragraph 1, paragraph 7 of article 378.2 of the Tax Code of the Russian Federation), the tax base for property tax of which is determined based on the cadastral value of the property.
A comparative calculation of the profitability of various options for structuring this transaction was carried out:
General features taken into account in the calculation:
project term - 5 years;
to calculate the internal profitability (in order to compare various options), the “output” is modeled: selling real estate after 5 years at the residual value (15.3 million rubles excluding VAT, the real value will most likely be higher);
the options were compared solely from the point of view of tax optimization, in all schemes only depreciation, taxes, interest, personal income tax of investors and expenses “X” were taken into account as expenses (for option 2);
special methods for protecting assets are not considered, however, the rights of all investors are taken into account using the usual methods provided by law (the option to register everything for one individual entrepreneur and work from it has not been considered due to ignoring the rights of another investor).
Brief description of the options.
1. The withdrawal of funds from the company through dividends. “Everything is according to the law.”
The real estate is executed at Business Project LLC, which is owned by both investors. 10 million rubles are contributed to the authorized capital. The remaining 15 million rubles are contributed by investors as a loan. This is necessary to withdraw cash accumulating in the current account in excess of profit. Funds will be accumulated due to depreciation and VAT refund from the budget.
2. “Normal optimization.” One-day firms.
In this scheme, several features arise immediately.
but. Tenants are federal companies for which it is important to rent from the owner or another transparent way of owning or disposing of real estate to minimize their tax risks, therefore schemes for working with tenants through “laying” are not possible;
b. The one-day scheme is not used the most aggressive. Through LLC Lily of the Valley it was possible to “nullify” VAT and profits altogether, however, in this case, the probability of loss of property becomes critical (taking into account clause 2.1.). Therefore, expenses from Lily of the Valley LLC are drawn only six months after the start of work (after VAT is refunded from the purchase of the building from the budget) and their amount is 60% of the proceeds. This is the maximum level of “VAT” expenses, at which we do not fall into losses due to “non-tax” expenses. In this calculation, the amount of declared profit for 5 years is only 600 thousand rubles, that is, 30 thousand rubles. per quarter on average. At levels below, tax and property risks become critical.
at. An interest-free loan is used because interest is an expense not subject to VAT. An increase in such expenses will reduce the amount of expenses that we can draw relatively safely from Lily of the Valley LLC.
Interest-bearing loan of 5 million rubles. It is used to increase profitability in the first six months, when we have not yet used Lily of the Valley LLC. This loan is repaid from the amount of the VAT refund. It carries additional risks in terms of having a business goal of using both interest and interest-free loans at the same time (or finding proxies as nominal lenders for the first six months), however, these risks are unlikely to exceed the risks of working with one-day firms. If you do not use this move, the profitability of the project will be even lower.
3. Structuring the business.
but. A simple partnership agreement (Chapter 55 of the Civil Code of the Russian Federation) is a unique tax optimization tool, since it allows combining the possibilities of paying and reimbursing VAT with the STS. Since a simple partnership is not a legal entity (Clause 1, Article 1041 of the Civil Code of the Russian Federation), it is not a taxpayer for any tax. The taxpayers of taxes on income, property tax, land tax are partners, in accordance with their chosen tax system.
With the exception of VAT, the specifics of calculating which when performing operations in accordance with a simple partnership agreement are established by Art. 174.1 of the Tax Code. In particular, the sale of goods, works, services in accordance with a simple partnership agreement is always subject to VAT under the general rules (clause 2 of article 174.1 of the Tax Code of the Russian Federation). In addition, paragraph 3 of Art. 174.1 of the Tax Code of the Russian Federation gives the right to a tax deduction for VAT, including the acquisition of fixed assets determined by the object of taxation on a common basis.
b. Property purchased under a simple partnership agreement is shared property of the partners (Clause 1, Article 1043 of the Civil Code of the Russian Federation).
at. Due to the fact that the object is not included in the register of objects, the tax base for which is defined as the cadastral value, in this scheme we get rid of property tax (paragraph 2 of article 346.11 of the Tax Code of the Russian Federation).
d. Income taxes are levied by partners in accordance with the taxation system chosen by them at the time of distribution of profits from the activities of a simple partnership (clause 1 of article 346.15 of the Tax Code of the Russian Federation, clause 9 of Article 250 of the Tax Code of the Russian Federation, paragraph 4 of Article 278 of the Tax Code of the Russian Federation ) Participants at the STS can use the cash method, so taxes on income from activities in the first three and a half years are not paid. Since all profits of the partnership go to repay loans and are not distributed to partners.
e. Unfortunately, the legislator forbade comrades to use a simplified taxation system with the Income base (paragraph 3 of article 346.14 of the Tax Code of the Russian Federation).
g. This scheme is “sighting” (I wanted to write “draft”, but I realized that it sounds ambiguous). Its application, taking into account the specific characteristics and wishes of investors, can both complicate it and increase profitability. For example, investors are usually people who already have business donors and investing for them is not a one-time share. They can invest money in the settlement accounts of other companies, and for them it may not be a task to withdraw all profits to the cache.
If you carry out borrowed financing from a certain legal entity, then the profitability of the scheme can be increased by partially avoiding personal income tax from dividends. In this example, investment from the current account will be in the amount of 15 million rubles, profit on the current account will return in the amount of 3.9 million rubles. (taking into account savings on personal income tax). Investments of “private” funds will amount to 10 million rubles, profit in the cache of 9.2 million rubles. The total yield will be 15.20% per annum.
Findings:
From the calculation, it can be seen that with almost complete absence of tax risks, competent structuring of a business can yield almost the same profitability as the classic optimization option through one-day firms. Obviously, an additional 700 thousand rubles in five years are not worth the risk.
Moreover, the tax benefit in the third option is almost 25% of the income of the scheme, which does not contain any optimization at all (option 1). In my opinion, 2.5 million rubles are worth it to approach the structuring of the transaction more professionally than is usually done (in the original the amounts were much larger, and the same amount of structuring work).
In the event that your litigation or other dispute, contractual work or any other form of activity concerns the issues discussed in this or our other material, we recommend checking and making sure that your legal position complies with the latest changes in practice and legislation.
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May 2, 2017
Kirill Soppa, partner. I am engaged in taxes, I like to build business processes. I am writing articles, looking for interesting information and suggest ways of its practical use. I believe that thanks to high-quality legal analytics, clients come to a law firm, and not vice versa. Do you agree? Then let's be friends on Facebook.
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