Taxes on contract agreements. Is the contract subject to taxes and fees? Advantages of a contract for the customer

09.04.2024

Payment of taxes and insurance premiums under civil contracts in 2019 is fundamentally different from similar payments from the income of full-time employees. Check what taxes and fees are imposed on a civil partnership agreement with an individual this year.

What is a civil contract: is it subject to tax and insurance premiums?

Knowledge of the nuances regarding the imposition of taxes and fees on a civil partnership agreement will allow the company to calculate its benefits and decide which agreement with an individual is better to conclude.

What is a GPC agreement

The essence of a civil contract (CLA) with an individual is that it is concluded when it is necessary to perform certain work. The customer pays the physicist’s income only after the performer has delivered the results of the work and the customer has accepted them (Clause 1, Article 702 of the Civil Code of the Russian Federation). The parties may also provide for an advance payment under the contract, but the final payment occurs upon completion.

As soon as the work under the contract is completed, the legal relationship between the customer and the contractor ceases. This is a one-time job, and the contractor under such an agreement is involved in performing such work once. An employee working under a civil contract is not a full-time employee.

A civil contract with an individual is regulated by the Civil Code of the Russian Federation, not the Labor Code.

Taxation of the GPC agreement in 2019

The features of a civil law contract also result in its differences from an employment contract in terms of taxation and payment of insurance premiums. According to the GPC agreement, the company must pay taxes and fees, since the individual receives income. But she doesn’t pay all the dues.

Here is a list of taxes and contributions that a company pays under GPC agreements in 2019:

But it's not that simple. Firstly, personal income tax and contributions in 2019 are paid only under agreements concluded with an individual residing in the Russian Federation. Agreements with individual entrepreneurs are not subject to taxation (Article 226 of the Tax Code of the Russian Federation). Secondly, there are exceptions among individuals, which we will discuss further.

Be careful! During the audits, tax officials are trying to reclassify the GPC agreement as a labor agreement and charge additional taxes and insurance premiums. "Russian Tax Courier" has compiled a cheat sheet: " How to draw up a contract so that tax authorities cannot find fault".

Below you can see a sample of a typical civil law contract of 2019.

Insurance premiums under GPC agreements in 2019

Let's now take a closer look at which funds the company pays insurance premiums to under a civil contract with an individual. Not every GPC agreement provides for the payment of contributions. To make it easier to understand, see the table, which contains all the cases of concluding this type of agreement.

Reason for signing the GPA by the parties	Are fees paid?
Agreement on any work or services	Paid, and the tax base is reduced by the amount of expenses incurred by the contractor (if there is documentary evidence)
Transfer of rights to literary, musical, artistic or scientific works
licensing-publishing
Agreement for the transfer of property rights or ownership	Not paid
Student contracts
Agreement with participants and organizers of the 2018 FIFA World Cup

When paying insurance premiums under civil contracts in 2019, it is important to consider who the individual with whom you are signing the agreement is. Not every physicist’s income makes payments to the budget.

Before paying insurance premiums to the tax and Social Insurance Fund, watch video lectures at the Higher Tax Academy.

When an accountant calculates contributions to compulsory pension insurance and compulsory medical insurance

Contributions to pension provision in the Pension Fund and compulsory health insurance are accrued if the executor:

When an accountant does NOT charge contributions for compulsory pension insurance and compulsory health insurance

Contributions to pension provision in the Pension Fund and compulsory health insurance are not accrued if the executor:

Bid

Insurance premiums on income under GPC contracts are paid at the rates that the customer applies to its full-time employees. In normal mode this is:

If otherwise provided, this otherwise applies to the GPA.

Base

The tax base may be reduced if the contractor incurred any expenses that are confirmed by relevant documents (checks, statements, receipts, tickets, etc.)

Payments under civil law contracts, contributions to the Social Insurance Fund

Particularly worth mentioning are contributions to the Social Insurance Fund (for injuries). The employer is not obliged to pay these contributions, unless otherwise provided by the terms of the contract. For example, if you hire a team of builders and enter into a civil contract with them for a certain type of work, then it is quite possible that a clause on the payment of contributions for injuries will appear there. And if such a clause is written down, then the company also makes payments to the Social Insurance Fund.

Social security contributions

Contributions for compulsory social insurance for temporary disability and maternity, as we wrote above, do not need to be charged (clause 2, part 3, article 9 of Law No. 212-FZ).

Taxes from a civil contract in 2019

In 2019, only one tax is paid under a civil contract - personal income tax. Since your performer receives income for his work, this income is subject to taxation.

At the same time, by paying remuneration under a civil contract with an individual, the company becomes a tax agent for personal income tax.

Important! For a civil contract, you pay personal income tax only if your contractor is not an individual entrepreneur (Article 226 of the Tax Code of the Russian Federation).

At the same time, keep in mind that the text of the GPC agreement with the individual entrepreneur may not specify who is obliged to pay personal income tax (letter of the Ministry of Finance of the Russian Federation dated 03/09/2016 No. 03-04-05/12891).

The company pays tax for individuals only if they are not individual entrepreneurs. Here's how to calculate tax:

Individual – resident of the Russian Federation

In the first case, professional deductions must be subtracted from the remuneration amount. An employee can receive them upon application (clauses 2, 3 of Article 221 of the Tax Code of the Russian Federation).

Individual – non-resident of the Russian Federation

And if the physicist is a non-resident of the Russian Federation, the accountant multiplies the personal income tax rate of 30% by the amount of income. The tax from the advance payment must be withheld the next day after the prepayment is transferred, and at the end of the year, you must submit to the Federal Tax Service a certificate 2-NDFL with all income paid and calculated tax (clauses 1, 2 of Article 230 of the Tax Code of the Russian Federation).

Contract agreement is a common phenomenon in modern business. It is not profitable for a small business to maintain workers on a permanent basis, especially if the work is one-time or seasonal. In this article we will tell you about the taxation of contract agreements and give instructions on paying taxes.

Basic concepts of a contract

Despite the fact that Chapter 37 of the Civil Code provides complete, detailed explanations of the features of this type of contract, and Tax Law clearly explains the obligations of persons to pay taxes, the Parties do not always rely on the law when specifying their terms in the contract. Naturally, they automatically become invalid if they contradict the law.

Important! If the terms of the contract are contrary to the law, they will be invalid, and the contract will be considered concluded with violations.

Which customer bears the tax burden?

This situation is not only the most common, but also one of the most frequent in court proceedings. This refers specifically to an individual who is not registered as an individual entrepreneur. The organization acts as a tax agent. This is the person who is responsible for transferring taxes to the budget. From the income of an individual, it is necessary to withhold 13%.

If the “Contractor” has the right to deductions, they must be provided. All these are not just recommendations, but norms, for violation of which penalties may be applied to the enterprise. An individual must take into account when drawing up an agreement that the amount they will receive is not the same as stated in the document, but 13% less.

Often, organizations resort to cunning and indicate in the contract that the responsibility for paying taxes rests with the “Contractor”. This point becomes immediately relevant.

In addition to the tax, you must pay insurance premiums:

For social insurance (against industrial accidents) - only if it is specified in the contract, but this happens extremely rarely.
Contributions to the Pension Fund. Read also the article: → “”.
For compulsory health insurance.
There is no need to pay contributions for disability and maternity.

Example 1. The Stroytekh company entered into a contract agreement with V.V. Vlasenko, according to which the individual was to install 100 lamps. The price for installing 1 unit of the device is 100 rubles. What amount the employee will receive and the amount of contributions that Stroytekh is obliged to transfer to extra-budgetary funds is shown in the table. The employee will receive 8,700.00 rubles.

№	Payment Description	Bid	Calculation
1	Personal income tax	13%	(100100)0.13=1,300.00 rub.
2	Pension Fund	22%	10,000.00*0.20=2,200.00 rub.
3	FFOMS	5,1%	10,000.00*5.1% =510.00 rub.
4	FSS against accidents (if specified in the contract)	In accordance with the accepted coefficient

When the “Contractor” is an individual, the tax agent is the organization “Customer”

The company enters into an agreement with the individual entrepreneur, who makes payments

To avoid disputes, when concluding an agreement, it is important to clearly state that the entrepreneur independently makes payments to budgetary and extra-budgetary funds, indicating the number of the state registration certificate and attaching a copy of it to the agreement.

Example 2. Individual Entrepreneur V.V. Bondarenko, uses the “Income” taxation system, performed work under a contract for the amount of RUB 90,000.00. The customer Literstroy LLC made the payment in full. The amount of taxes and contributions required to be paid.

All payment obligations in this case rest with the entrepreneur. If he has no employees, then his registration with the Social Insurance Fund is voluntary. If you don’t want to register, then you don’t need to pay any fees.

№	Payment Description	Bid	Calculation
1	USN Income	6%	90,000.00*0.06 = 5,400.00 rub.
2	Pension Fund	26%	(minimum wage 12) 0.26

Payments to the Pension Fund can be made quarterly or once a year. Their size depends on the Minimum Labor Size in force in a particular year. When a contract is concluded with an individual entrepreneur, where the company is the “Customer” and the individual entrepreneur is the “Contractor,” then the burden of paying taxes and fees falls on the entrepreneur in accordance with the system he applies.

Contracts between individuals

This definition sounds very scientific and many people do not immediately understand that they are faced with such relationships all the time. We need to hang a chandelier - we call according to the ad, a specialist will come to your home to carry out the work. According to the law, he must be registered as an individual entrepreneur. But, if this is a single part-time job, then providing such services is not prohibited. But the procedure must take place in accordance with the law:

The individual “Contractor” is obliged to conclude an agreement with the “Customer”.
Pay 13% to the budget yourself, since every citizen of the Russian Federation is required to pay income tax on any income.
By April 30 of the year following the current period, submit a declaration in form 3-NDFL, which indicates the amount of income, tax, and transfer.

Contract agreement with foreigners: individuals and legal entities

The tax agent is a Russian organization. When calculating personal income tax, it is necessary to immediately determine whether a foreign person is a resident of our country. This definition includes citizens who have lived within the Russian Federation for at least 183 days a year. If not, the rate will be 30%.

Otherwise, the scheme is the same as when working with an ordinary individual:

FSS injuries are paid at will, if specified in the contract and at the same rates as those established for other employees.
There is no need to pay FSS for temporary disability
In the Pension Fund of the Russian Federation and the Federal Compulsory Compulsory Medical Insurance Fund, contributions are made at established rates.

Agreement with foreign legal entities

Since a foreign organization is not registered with the tax authorities on the territory of the Russian Federation, a Russian company acts as a tax agent. Foreign legal entities, as a rule, are VAT payers. Tax agents are required to make payments for them, regardless of their form of ownership (STS, UTII). VAT must be paid on the day the funds are received.

Judicial practice on contract agreements

Case #1. Citizen Penin D.D. filed a claim against IP Doronin F.I. to the Samara city court demanding reimbursement of funds paid, penalties and fines. A contract agreement was drawn up between the parties on 06/05/2016, on the basis of which the “Contractor” party undertakes to manufacture and install a kitchen set according to the agreed design project, within 60 days after the conclusion of the contract and payment. 06/05/2016 cash in the amount of RUB 390,000.00. from the “Customer Listed” side.

On October 10, 2016, the plaintiff handed over the claim to the defendant. In response, a receipt was received indicating the deadline - October 14, 2016, by which the headset must be installed. But after the specified date, nothing has changed. Penin D.D. demands to recover the paid amount, double the amount due to the penalty, compensation for moral damage and a fine of 50% of the paid amount.

The defendant accepted this requirement and clarified that the delay was due to a manufacturing defect. The components have been re-ordered but have not yet been received. The rest of the work has been completed and the appropriate communications have even been connected. Therefore, he asks to reduce the amount of compensation and cancel fines. Having considered all the details of the case and heard the parties, the court ruled:

The contract contains strictly defined deadlines, and the contractor is responsible for violating them. Since this clause of the contract has not been fulfilled, the customer has the right to terminate the agreement unilaterally.
Based on the receipts, the court took note that Penin D.D. fully fulfilled its obligations and made payment not partially, as established by the contract, but in full. And since the contract has expired, he has the right to demand his money. The court satisfied the claim for compensation of 390 thousand rubles.
The solution to the issue of compensation for the penalty was not so clear-cut. The court took into account the explanations given by the defendant about the disproportionality of the declared amount and the reasons for the delay and reduced the amount to RUB 150,000.00.
When determining the amount of moral damage, the judge also found that the plaintiff suffered inconvenience due to the inability to move into the apartment. And determined the amount of compensation to be 10,000.00 rubles.
Thus, the claim was partially satisfied. The defendant is obliged to pay RUB 550,000.00. and legal costs in the amount of RUB 30,000.00.

Case #2. The Kemerovo District Court received an application from individual entrepreneur V.V. Belykh. According to the contract, he carried out construction work. A settlement was made between the parties in the amount of RUB 300,000.00. According to the terms of the concluded agreement (clause 4.2), the obligation to pay tax is assigned to the Customer, whose role was played by Fartuna LLC. When submitting the declaration, citizen Belykh V.V. indicated these incomes, but did not transfer taxes, attaching a copy of the contract.

As time passed, notifications began to arrive from the tax authorities demanding that additional amounts be accrued to the budget, and after a while, the current account was blocked. The plaintiff demands to attract tax authorities for unlawful actions and to pay moral damages due to lost profits.

Having considered the details of the case, the court ruled:

Accept clause 4.2. the contract is invalid because it contradicts the norms of civil law and tax legislation.
Oblige IP Belykh V.V. pay an additional amount of tax due in the amount of 18 thousand rubles, penalties and fines.
Recognize the actions of the tax authorities as legal and justified. When concluding a contract between a legal entity and an individual entrepreneur, the Contractor fully fulfills tax obligations, regardless of how it is stated in the contract.

Rating of the 5 most popular questions

Question No. 1. What to do if the Customer refuses to sign the work completion certificates?

Sign unilaterally and send by mail with notification.

Question No. 2. Is it possible to draw up a contract with a minor?

Yes, this action is allowed. Only the content of the agreement will not be standard, but will be more aimed at protecting the rights of the minor.

Question #3. When concluding an agreement between legal entities, who bears the tax burden?

To the Contractor.

Question No. 4. If during the period of work the Contractor falls ill, should he count on receiving sick leave?

No. This is the main difference between this agreement and an employment contract.

Question #5 A foreign citizen works under a contract in Russia. Not a resident. Who should pay personal income tax for it, and in what amount?

For non-residents the personal income tax rate is 30%. The tax agent is a Russian organization. When concluding a contract, it is necessary to study it carefully. The main thing is that it protects the rights of both parties and is drawn up in accordance with the legislation of the Russian Federation,

It is important to know what taxes and contributions are accrued on a contract and under what conditions the accrual is made when concluding and executing transactions of this kind. In our article we will talk about this, as well as what reports are required by law and where they should be submitted to the customer organization under a contract agreement.

What contract transactions are subject to taxes and insurance premiums?

When we talk about accruals under a contract, we primarily mean taxes and fees for remuneration for this transaction. However, the need for these charges depends on the status of the person who acts as a contractor:

If this is a legal entity, then the taxes and fees that are usual for transactions between organizations are paid, with each party independently handling its payments.
If this is an individual entrepreneur (hereinafter referred to as individual entrepreneur), then he himself also pays the state.
If the contractor is an individual, then the budget deductions that apply to his remuneration become the concern of the customer - an organization or individual entrepreneur (in this case, the customer is recognized as a tax agent).

It is about the accruals on the remuneration of the citizen contractor that we will talk about next. At the same time, we note that tax on fees for the work of an individual is withheld in any case. As for insurance premiums, they are not calculated if the transaction is signed with the following categories of persons:

foreigners and stateless persons (subclause 15, clause 1, article 422 of the Tax Code of the Russian Federation);
people who are undergoing full-time training at educational institutions of various levels to work in student teams in terms of paying pension contributions (subclause 1, clause 3, article 422 of the Tax Code of the Russian Federation).

Taxation and contributions to the Social Insurance Fund in 2017 under a contract with an individual

Taxes and insurance premiums under the contract in 2017 do not differ from the contributions of last year, i.e. they must be paid in exactly the same way as before. Amounts earned by a citizen contractor are subject to the following mandatory contributions, which are transferred to the tax service:

Don't know your rights?

Personal income tax. As mentioned above, the tax is calculated, withheld and paid by the customer, who in this case acts as a tax agent (clause 1 of Article 226 of the Tax Code of the Russian Federation). At the same time, it is prohibited to include into the contract a condition on the contractor’s independent payment of personal income tax; if included, it will simply be considered void.
Pension contributions (clause 1 of article 420 of the Tax Code of the Russian Federation).
Payments for medical insurance (clause 1 of article 420 of the Tax Code of the Russian Federation).

What accruals are not deducted from contract remuneration? According to sub. 2 p. 3 art. 422 of the Tax Code of the Russian Federation, these include contributions for cases of temporary disability and maternity.

The issue of calculating amounts for insurance against accidents and occupational diseases is decided by the terms of the contract transaction. If the text provides for such an obligation of the customer, then he calculates and pays the specified fee. Otherwise, the customer does not do this. It should be noted that this is the only contribution paid to the Social Insurance Fund (FSS RF).

Calculation of insurance premiums (indicating the category code of the insured person), SZV-M and other reporting in 2017

In addition to calculating and paying the listed payments to the budget, the customer is obliged to submit appropriate reports, which should reflect information about the citizen-contractor with whom the agreement was concluded. Reporting refers to data submitted to the tax authority and extra-budgetary funds in connection with the involvement of an individual as a contractor.

According to current legislation, the following reports are submitted on insurance premiums and taxation of contract agreements:

Calculation of personal income tax amounts paid by the tax agent (form 6-NDFL). It is sent to the Federal Tax Service Inspectorate (Inspectorate of the Federal Tax Service). The document has been used since the first quarter of 2016 and is compiled for 3, 6, 9 months and a year.
Calculation of insurance premiums (DAM). The updated form has been installed since the first quarter of 2017. The RSV is submitted to the Federal Tax Service by the 30th day of the month following the reporting month. In the form it is necessary to enter the code of the category of the insured person (for a contract - “NR”, i.e. “hired employee”).
Information about the insured persons (SZV-M). Since April 2016, they have been sent directly to the Pension Fund of the Russian Federation on a monthly basis before the 15th day of the month that begins after the reporting month.
Calculation of contributions for insurance against accidents at work and occupational diseases (Form 4-FSS of the Russian Federation). Sent to the fund from the first quarter of 2017 quarterly until the 20th day of the month, which begins immediately after the reporting period.

Thus, payment for the work of an individual under contractual relations is subject to personal income tax and certain types of contributions. At the same time, in 2017 the list of considered charges did not change compared to the previous one. As for reporting on these budget payments, both some forms and the procedure for their submission have been updated since the beginning of the year.

In acc. from Part 1 Art. 7 of Federal Law N 212-FZ “On insurance contributions to the pension fund of the Russian Federation, the social insurance fund of the Russian Federation, the federal compulsory medical insurance fund” payments and other remunerations accrued by payers of insurance contributions in favor of individuals under civil law contracts are the subject of which is the performance of work, are recognized as subject to insurance contributions for compulsory pension insurance, compulsory social insurance in case of temporary disability and in connection with maternity, and compulsory medical insurance.

The advantages that arise when concluding a contract with a freelance worker. Firstly, the remuneration under such an agreement does not require paying contributions to the Social Insurance Fund of the Russian Federation. And if you don’t mention in the contract about contributions for insurance against industrial accidents and occupational diseases, then you won’t have to pay them either (Article 5 of the Federal Law of July 24, 1998 N 125-FZ “On compulsory social insurance against industrial accidents” and occupational diseases").

6-NDFL: civil contract

If a GPC agreement is concluded by an organization or individual entrepreneur with an individual who is not an individual entrepreneur, such organizations and individual entrepreneurs are recognized as tax agents (clauses 1, 2 of Article 226 of the Tax Code of the Russian Federation). This means that they must calculate, withhold and transfer personal income tax from the remuneration paid to an individual under the GPC.

The tax agent must calculate personal income tax on the date of actual receipt of income by an individual (clause 3 of Article 226 of the Tax Code of the Russian Federation). The date of actual receipt of income under the GPA is the day of payment of income (transfer to a bank account or withdrawal from the cash register) (clause 1, clause 1, article 223 of the Tax Code of the Russian Federation). This date is reflected in line 100 “Date of actual receipt of income” of form 6-NDFL.

Personal income tax on payments under a civil contract

But if you simply involve an individual who is not registered as an individual entrepreneur, then the situation will be a little more complicated. And in this case, the customer organization will be obliged to withhold personal income tax from the income paid, because she will act as a tax agent. In this article we will discuss how to calculate and withhold personal income tax from payments under a civil contract for the performance of work or provision of services.

For accounting purposes of settlements with contractors and performers who are individuals, account 76, subaccount “Settlements with various debtors and creditors” is used. The accrual of remuneration is reflected on the credit of this account in correspondence with the cost account, depending on the purposes for which the work was performed and services were provided:

Reflection of payments under a contract in 6 personal income taxes

Vitrazh LLC entered into a contract agreement with an individual. The advance was transferred on December 5, 2019, the certificate of completion of work was signed on December 28, 2019. Full payment to the contractor was made on December 29, 2019. The cost of services amounted to 39,000 rubles, of which the advance was equal to 10 thousand rubles. The contractor has the right to deduct an amount of up to 8,000 rubles.

100 - date of receipt of income by the contractor. Here you indicate either the day of transfer of funds or the day of cash issuance;
110 - date of personal income tax withholding (coincides with the day of payment of income);
120 - date of transfer of the fee according to the law. It is legally established that the transfer of fees to the budget must be made no later than the day following the withholding of personal income tax. Thus, even if the tax was paid on the day the reward was issued, the report reflects the next business day;
130 - the cost specified in the contract. If an advance payment is implied, then the amount of the advance and the settlement amount;
140 - amount of tax withheld.

Personal income tax and payments under contract agreements

– Does an organization have the right to provide individuals with professional tax deductions for personal income tax for the amount of documented expenses? The fact is that when signing acts of work performed, contractors - individuals apply for such deductions for expenses, compensation for which is provided for in the contract, and also submit documents confirming the expenses incurred: tickets, hotel bills, etc.

- In accordance with clause 2 art. 221 Tax Code of the Russian Federation Taxpayers who receive income from performing work (providing services) under civil contracts, when calculating the tax base for personal income tax, have the right to receive professional tax deductions in the amount of expenses actually incurred and documented by them directly related to performance of these works (provision of services). Thus, an individual has the right to receive a professional tax deduction in the amount of expenses incurred and documented by him, directly related to the performance of work under a contract, and not to preparation for the start of this process (travel, accommodation, etc.).

Taxes and fees under the contract

Yes, an oral form is indeed acceptable, but only if the total transaction amount under the agreement does not exceed 10 thousand rubles. However, even if the amount is less, it is allowed to draw up a written agreement, but it will not be necessary to have it certified - but for a larger amount, notarization is already required.

It is possible for the FSS to go to court in order to recognize the contract as an employment contract and collect the contribution, and also a fine. To avoid such a development of events, you should, while still drawing up the contract, abandon any controversial provisions in it, due to which it can then be defined as a labor agreement. To clearly identify a document as a civil document, you should:

Taxes and insurance premiums for GPC in 2019

That is, a professional deduction is provided to the contractor by the customer when calculating personal income tax on remuneration. At the same time, in accordance with the position of the Russian Ministry of Finance stated above, there is no need to exclude compensation for expenses from the contractor’s taxable income. If you excluded this compensation, guided by the explanations of the Federal Tax Service of Russia, then you no longer need to provide a professional deduction to the contractor. Otherwise, it will turn out that you have excluded the same amounts from taxable income twice.

At the same time, the Federal Tax Service of Russia, in letter dated March 25, 2011 No. KE-3-3/926, expresses a different opinion: compensation for the contractor’s costs established by the contract is not subject to personal income tax. Since there are two opposing opinions, you can do what is more convenient for you. After all, letters from the Ministry of Finance and the Federal Tax Service of Russia are not regulatory documents. And all ambiguities in tax legislation should be interpreted in favor of the taxpayer (Clause 7, Article 3 of the Tax Code of the Russian Federation).

Taxation of contract

How to reflect a GPC agreement in 6-NDFL

Tax legislation establishes the obligation of companies and individual entrepreneurs to reflect in 6-NDFL the amounts of remuneration under civil law agreements (GPC) concluded with an individual who is not an entrepreneur. How to reflect GPC agreements in 6-NDFL is the topic of our publication.

Payment under a GPC agreement is income subject to personal income tax, so the customer has the obligation of a tax agent. He must accrue the payment amount to the contractor, withhold and transfer personal income tax from it, and also notify the Federal Tax Service about the conduct of these operations, i.e. fill out form 6-NDFL.

6-NDFL under an agreement with an individual

on line 010 – tax rate (13% or 30%);
on line 020 – the amount of accrued income on an accrual basis from the beginning of the calendar year;
on line 040 – the amount of calculated personal income tax on an accrual basis from the beginning of the calendar year;
on line 070 – the total amount of personal income tax withheld on an accrual basis from the beginning of the calendar year.

In particular, if the acceptance certificate of work (services) under a civil law agreement was signed in December 2019, and the remuneration to an individual for the provision of services under this agreement was paid in January 2019, then this operation is reflected in sections 1 and 2 of the form 6-NDFL for the first quarter of 2019.

05 Aug 2018 1220

What is a contract? When is it concluded and how is it drawn up correctly? What taxes should I pay? How to reflect it in accounting? Let's look at all these questions next.

1. What is a contract

A work contract is an agreement in which one party (contractor) undertakes to perform certain work on the instructions of the other party (customer) and deliver its result to the customer, and the latter undertakes to accept the result of the work and pay for it (Article 702 of the Civil Code of the Russian Federation).

The work contract is considered one of the oldest civil law contracts. It was already known to Roman law, which defined it as hiring work and was divided into three types - hiring of things, contracting, hiring of services.

After the revolution in Soviet legislation, contracting was identified as a separate contractual type. According to the Civil Code of 1922, under a contract, one party (contractor) undertakes, at his own risk, to perform certain work on the instructions of the other party (customer), and the latter undertakes to provide remuneration for completing the task. The Civil Code of 1964 defined a contract as an agreement under which the contractor undertakes to perform, at his own risk, certain work on the instructions of the customer from his or his own materials, and the customer undertakes to accept and pay for the work performed (Article 350).

The Civil Code of the Russian Federation of 1994 identifies the types of construction contracts (Chapter 37):

domestic;
construction contract;
contract for design and survey work;
contract work for government needs.

A contract with an individual can be used in cases of one-time work. Examples: legal services, office renovation, fence painting, etc.

2. Advantages and disadvantages of a contract with an individual

Such an agreement often attracts the attention of tax authorities. The conclusion of civil contracts that actually regulate labor relations between an employee and an employer is not allowed (Article 15 of the Labor Code of the Russian Federation). Tax authorities may recognize it as work and then the organization may be fined. Evasion or improper execution of an employment contract or the conclusion of a civil contract that actually regulates the labor relationship between the employee and the employer,entails the imposition of an administrative fine (Article 5.27 of the Code of Administrative Offenses of the Russian Federation):

for officials in the amount of 10 (ten) thousand to 20 (twenty) thousand rubles;
for persons carrying out entrepreneurial activities without forming a legal entity, from 5 (five) thousand to 10 (ten) thousand rubles;
for legal entities - from 50 (fifty) thousand to 100 (one hundred) thousand rubles.

In addition, you will have to pay some amounts to the employee (for example, compensation for vacation).

Comparison of contract and employment contract

Element of difference	Employment contract	Work agreement
Purpose of the agreement	The labor process, that is, the performance by an employee of certain functions defined for his position.	Achievement by the contractor of certain results and transfer of the result to the customer within a specified time frame.
Salary	Salaries are paid monthly, regardless of the result.	Payment is made based on the results of the work.
Subordination	Submits to the internal labor regulations of the organization.	The contractor independently determines how to complete the customer’s assignment.
Ownership	Anything created by an employee belongs to the employer.	An item manufactured by a contractor until it is transferred to the customer belongs to the contractor by right of ownership.

By the way, tax authorities can recognize a contract as a labor agreement only in court. Examples of judicial practice on this issue:

Resolution of the Federal Antimonopoly Service of the Volga-Vyatka District dated May 25, 2011 in case No. A17-2880/2010. The court found that the employees with whom the Company entered into civil contracts are actually assigned to a specific position, indicating a specific job function and qualifications, and perform work of a certain type, and not one-time tasks.
Resolution of the Federal Antimonopoly Service of the East Siberian District dated April 24, 2008 No. A33-8071/07-F02-1640/08 in case No. A33-8071/07. The court came to the conclusion that the work was not of a civil law nature, but of a labor nature, since under the terms of the contracts the employee undertakes to perform work in a certain specialty, and the Company undertakes to pay the employee remuneration at certain intervals. From the subject of the contracts it is clear that under the contract not any specific one-time work was performed, but certain functions were performed.
Resolution of the Federal Antimonopoly Service of the Ural District dated August 18, 2008 No. F09-5783/08-S2 in case No. A71-10321/07. The court found that, in accordance with the contracts, individuals were obliged to perform work in a certain position, specialty or profession, employees worked 5 days a week from 08-00 to 17-00, work on weekends was paid double, employees were subject to labor regulations of the Company, some of the employees underwent professional training at the expense of the Company.

Advantages of a contract for the customer

1 Quite a free interpretation of the terms of the agreement and its financing;

2 For remuneration, you do not need to pay contributions to the Social Insurance Fund;

3 No need to pay for vacations and sick leave.

Advantages of a contract for a contractor

1 Reduction of the personal income tax tax base by the amount of actual expenses that are associated with the fulfillment of contractual obligations. Expenses must be supported by relevant documents.

3. How to draw up a contract with an individual

Insurance premiums

The situation is similar with insurance premiums. Payments under civil contracts in favor of individuals, the subject of which is the performance of work or the provision of services, are subject to insurance premiums (Article 420 of the Tax Code of the Russian Federation).

The exceptions are:

payments and other remuneration within the framework of civil law contracts, the subject of which is the transfer of ownership or other proprietary rights to property (property rights), and contracts related to the transfer of property (property rights) for use, with the exception of contracts for author's order, contracts for alienation of the exclusive right to the results of intellectual activity, publishing license agreements, license agreements granting the right to use the results of intellectual activity;
payments and other remuneration in favor of individuals who are foreign citizens or stateless persons under employment contracts concluded with a Russian organization to work in its separate division, the location of which is outside the Russian Federation;
payments and other remuneration calculated in favor of individuals who are foreign citizens or stateless persons in connection with their activities outside the Russian Federation;
payments to volunteers, volunteers (Article 17 No. 135-FZ);
payments to foreign citizens and stateless persons under employment contracts or under civil law contracts, which are concluded with FIFA (Federation Internationale de Football Association) and the subject of which is the performance of work, provision of services, as well as payments made to volunteers under civil law contracts, which are concluded with FIFA, FIFA subsidiaries.

So, the remuneration of an individual for performing work under a contract is subject to contributions to the Pension Fund of the Russian Federation (PFR) and the Federal Compulsory Medical Insurance Fund (FFOMS). Insurance premium rates.

Attention. The amount of remuneration is not included in the base for calculating insurance premiums payable to the Social Insurance Fund of the Russian Federation (FSS RF). Such an obligation arises only if compulsory insurance against industrial accidents and occupational diseases is specified in the contract.

5. How to keep accounting records under a contract with an individual

We reflect the operations:

We reflect the accrual to an individual for work performed: D 20 (26.44) – K 76 20 (“Main production”, 26 “General business expenses”, 44 “Sales expenses”, 76 “Settlements with various debtors and creditors”);
We reflect the withholding of personal income tax from the amount: D 76 – K 68.01 (68.01 “Income tax for individuals”);
We calculate insurance contributions to the pension fund, to the health insurance fund: D 20 (26, 44) – K 69.02 (69.02 “Calculations for pensions”), D 20 (26, 44) – K 69.03 (69.03 “Calculations for health insurance” );
We calculate insurance premiums for accidents at work: D 20 (26, 44) – K 69.01.2 (69.01.2 “Calculations for compulsory social insurance against accidents at work and occupational diseases”);
We reflect the amount of payment to an individual: D 76 – K 50 (51);
We transfer personal income tax to the budget: D 68.01 – K 51

It happens that an organization enters into a contract with its own employee. In this case, the amount is reflected in the credit of account 70 “Settlements with personnel for wages”. If you have entered into a contract agreement with an employee who is on the staff of your organization, then the work under this agreement must be carried out during non-working hours. Otherwise, the work will be considered part-time work.

If a contract is concluded with individuals who are employees of your organization, then you will not be able to attribute payments under this contract to the cost price (clause 21 of Article 255 of the Tax Code of the Russian Federation).

conclusions

We hope that our material contained useful information for you. We told:

four types of contract are legally defined;
each type of work contract must be correctly drawn up so that the contract is not recognized as an employment contract;
After completing the task, it is necessary to issue a certificate of completion of work.
Personal income tax and insurance premiums are paid under the agreement.

Firmmaker, July 2015
Anastasia Konatova (Chizhova)
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