Ministry of Regional Development of the Russian Federation P i s m o. Ministry of Regional Development of the Russian Federation P i s m o Why this is not so

Question:
Good afternoon I found this explanation in construction info:

Question: Please provide clarification on the Letter of the State Construction Committee of the Russian Federation dated October 6, 2003. No. NZ - 6292/10 “On the procedure for determining the estimated cost of work performed by organizations operating under a simplified taxation system.”
We are interested in whether this letter is valid or has lost force, and if it has lost force, then on the basis of what document.
Answer: The procedure for including funds for payment of value added tax (VAT) in the estimate documentation is given in clause 4.100 of the Methodology for determining the cost of construction products on the territory of the Russian Federation MDS 81-35.2004.
In cases where the legislation of the Russian Federation establishes benefits for the payment of VAT for certain types of construction projects for organizations, the consolidated estimate includes only the funds necessary to reimburse the costs of contract construction and installation organizations for their payment of VAT to suppliers of material resources and other organizations for the provision of services .
The costs of contractors for these purposes are determined by calculation depending on the structure of construction and installation work performed at the current price level.
At the same time, this calculation includes material resources taken into account in the cost of a machine-hour of operation of construction machines (wearing parts, lubricants, hydraulic fluid, energy).
In connection with the release of the letter of the Gosstroy dated November 27, 2012 No. 2536-IP/12/GS, the example of calculating the costs of paying VAT under the simplified taxation system given in the letter of the Gosstroy of Russia dated October 6, 2003 No. NZ-6292/10 has lost its significance.

That is, this formula (MAT + (EM-ZPM) + HP * 0.1712 + SP * 0.15 + OB) * 0.18 is not valid? Following from this letter? I already have several customers who don’t miss this formula.

Sincerely, …

Tatiana E.
t************** [email protected]

Answer:
Hello!

Thank you for sending exactly the quote from the clarification, indicating the issue number.
It often happens that clarifications are referred to, but not specifically quoted.

Some estimators use the quote:

Bulletin 4 (157) Consultations and clarifications
In connection with the release of the letter of the State Construction Committee dated November 27, 2012 No. 2536-IP/12/GS, an example of calculating the costs of paying VAT under a simplified taxation system, given in the letter of the Gosstroy of Russia dated October 6, 2003 No. NZ-6292/10, has lost its meaning.

— noting that the formula:
(MAT+(EM-ZPM)+NR*0.1712+SP*0.15+OB)*0.18
given at () is no longer correct.

Why isn't this true?

The fact is that the formula (MAT + (EM-ZPM) + NR * 0.1712 + SP * 0.15 + OB) * 0.18 does not correspond to the calculation formula given in the example to the letter of the Gosstroy of Russia dated 06.10.2003 No. NZ-6292/10.

That is, even canceling this letter would not affect the formula (MAT+(EM-ZPM)+NR*0.1712+SP*0.15+OB)*0.18, since the letter contains a calculation using a different formula.

How not to get confused

Two questions arise when reading the “Consultation and Clarification” response and taking it as an argument:
First- according to the wording of the answer in “Consultations and Clarifications” - but it does not affect the matter, oddly enough, and we will leave it.
And the second question: why do they point to this answer in the explanations and to the letter of the State Construction Committee dated November 27, 2012 No. 2536-IP/12/GS, arguing with these documents that the formula for () for calculating VAT compensation under the simplified tax system does not apply?

Let's take a closer look at the letter of the Gosstroy of Russia dated October 6, 2003 No. NZ-6292/10, which contains an invalid example of calculating VAT compensation under the simplified tax system, specifically an appendix with an example of the calculation:

Appendix to the letter of the Gosstroy of Russia dated October 6, 2003 No. NZ-6292/10
EXAMPLE OF CALCULATION OF VAT COSTS
┌─────────────────────────┬──────────┬───────────────────────────┐
│ Cost items │Estimated │ Calculation of costs for payment │
│ │cost │ VAT at 20% │
│ │builder-│ │
│ │establishments in those-│ │
│ │tabernacle │ │
│ │price level│ │
│ │(thousand │ │
│ │rub.) │ │

│Direct costs, │ │ │
│including │ │ │
├─────────────────────────┼──────────┼───────────────────────────┤
│Materials │6150 │6150 x 0.2 = 1230 │
├─────────────────────────┼──────────┼───────────────────────────┤
│Wages of workers │1960 │- │
├─────────────────────────┼──────────┼───────────────────────────┤
│Operating costs │1890 │(1890 - 370) x 0.2 = 304 │
│cars │ │ │
├─────────────────────────┼──────────┼───────────────────────────┤
│including wages │370 │- │
│machinists │ │ │
├─────────────────────────┼──────────┼───────────────────────────┤
│Total │10000 │1534 │
├─────────────────────────┼──────────┼───────────────────────────┤
│Overhead costs │1925 │1925 x 0.183 x 0.2 = 70 │
│(1960 + 370) x 1.18 x 0.7│ │ │
├─────────────────────────┼──────────┼───────────────────────────┤
│Estimated profit │1363 │1363 x 0.15 x 0.2 = 41 │
│(1960 + 370) x 0.65 x 0.9│ │ │
├─────────────────────────┼──────────┼───────────────────────────┤
│Total │13288 │1645 or 12.4% (1645/13288)│
│ │ │to the estimated cost │
│ │ │construction │
└─────────────────────────┴──────────┴───────────────────────────┘
Note:
0.183 - the share of costs for materials in the itemized structure of overhead costs;
0.15 - the share of costs for materials in the itemized structure of the estimated profit;
1.18 - enlarged standard overhead costs for housing and civil construction (Appendix 2 MDS 81-4.99);
0.65 is the industry-wide standard for estimated profit (clause 2.1 of MDS 81-25.2001).

Let's call this method writing.

And let's see the formula by: ( , which allows you to determine the amount of VAT compensation in the estimate under the simplified tax system: (MAT+(EM-ZPM)+NR*0.1712+SP*0.15+OB)*0.18. Let's call this method calculation.

Let's find the differences

The differences between these methods are as follows, point by point:

The letter adopted a VAT rate of 20% - calculated at 18%.
In the letter, the share of materials costs in the itemized structure of overhead costs is 0.183 - calculated as 0.1712.
In the letter, the coefficients for HP and SP appear, including the no longer valid coefficient for HP K = 0.7 - in the calculation, the coefficients for HP and SP are omitted, since the already calculated sizes of HP and SP are included in the formula.
The letter indicates the coefficients for NR and SP, including the invalid one, but there is no indication of the use of other coefficients, depending on the indexation method - the coefficients are omitted in the calculation, similar to paragraph 3.
The letter adopted enlarged and industry-wide standards for NR and SP, respectively, and not standards for types of work - in the calculation, again similar to point 3, the already calculated sizes of NR and SP are included in the formula.

Points 1, 4, 5 - inconsistencies between the letter and the calculation can be skipped, since the letter is an example in which, say, 20% VAT can be replaced by 18%. But paragraphs 2, 3 make these two methods inconsistent with each other, and paragraph 3 makes the letter also not relevant, since it includes in the calculation example a coefficient of 0.7 to NR, canceled by a later letter of the State Construction Committee dated November 27, 2012 No. 2536- IP/12/GS, which is referred to in “Bulletin 4 (157) Consultations and clarifications.”

If in the example there is a coefficient K = 0.7 to HP and this coefficient has already been canceled by a later document, then the example is outdated and no longer relevant.
There is no coefficient for HP in the formula initially

Conclusion

1. An example of calculating the cost of paying VAT under a simplified taxation system, given in the letter of the Gosstroy of Russia dated 06.10.2003 No. NZ-6292/10, has lost its meaning - indeed, as stated in the answers to “Consultations and Explanations”, in connection with the release letter of the State Construction Committee dated November 27, 2012 No. 2536-IP/12/GS.
2. Calculation formula costs for VAT compensation under the simplified tax system:

(MAT+(EM-ZPM)+NR*0.1712+SP*0.15+OB)*0.18

presented on: - is correct and works. The cancellation of the above letter did not affect this formula in any way.

We can say that this formula takes into account the current situation, takes into account the letter of the Gosstroy dated November 27, 2012 No. 2536-IP/12/GS and takes into account the “cancellation” of the calculation example in the letter of the Gosstroy of Russia dated October 6, 2003 No. NZ-6292/10, since these documents affect variables that are not contained in the formula.

The result of changing the variables, namely the coefficients to IR, is calculated in advance by these documents, and enters the formula as final IR, taking into account the coefficients.

Why customers don’t skip this formula and what they offer in return is an interesting question.

The Federal Agency for Construction and Housing and Communal Services, in connection with incoming requests about the procedure for applying standards for overhead costs and estimated profits at the current price level, reports.

Judicial practice and legislation -<Письмо>Gosstroy dated November 27, 2012 N 2536-IP/12/GS<О применении понижающих коэффициентов к нормативам накладных расходов и сметной прибыли в строительстве>

These forecast indices were developed for the estimate and regulatory framework of 2001 in accordance with the provisions of the Methodology for calculating forecast indices for changes in construction costs, approved by Order of the Ministry of Regional Development of the Russian Federation dated August 20, 2009 N 355, using data from the FAU "Federal Center for Pricing in Construction and building materials industry", JSC "CENTRINVESTproekt", JSC "PNIIIS", regional bodies for pricing in construction for the second quarter of 2016, taking into account the forecast inflation rate established by the Ministry of Economic Development of Russia, as well as the letter of the State Construction Committee dated November 27, 2012 N 2536-IP /12/GS.

When determining the estimated cost of construction, reconstruction, repair and technical re-equipment of capital construction projects financed with funds from the federal budget, based on standards included in the federal register estimate standards, to be applied when determining the estimated cost of capital construction projects, the construction of which is financed with funds from the federal budget, a reduction factor of 0.85 is applied to the overhead cost standards at the current price level, and a coefficient of 0.80 is applied to the estimated profit standards at the current price level. The specified coefficients do not apply to the construction of bridges, tunnels, subways, nuclear power plants, and facilities for handling irradiated nuclear fuel and radioactive waste.

For organizations operating under a simplified taxation system, in addition to the specified reduction factor, a coefficient of 0.94 is applied to the overhead cost standards. In this case, a reduction factor of 0.7 is not applied to the overhead cost standards.

When applying coefficients to standards for overhead costs and estimated profit, rounding standards to whole numbers is carried out after applying all coefficients. Estimated documentation that has been verified prior to the publication of this letter is not subject to recalculation.

At the same time, it is reported that the position of Gosstroy, given in this letter, is of an informational and explanatory nature.