Local or municipal taxes are established and apply in the territory of a particular municipality. Such taxes go to the municipal budget, and they are required to be paid. The size of tax rates is determined by the authorities of the municipality in accordance with the Tax Code of the Russian Federation. These same structures establish the timing and procedure for paying taxes, as well as the system of benefits and the scheme for its application for taxpayers.

Main types of municipal taxes

In the list of local taxes, priority and mandatory are:
Land tax;
Municipal property tax;
Land tax is paid by individuals and organizations that are owners of land plots located on municipal territory.

The tax rate is determined based on the cadastral value of the land plot.

0.3% is the minimum rate applicable for the following objects:
Land plots for agricultural purposes,
Land occupied by housing stock
Plots on which personal subsidiary plots are located.
The remaining objects are subject to land tax not exceeding 1.5% of the cadastral value of the land plot.
The size of tax rates on property is established by local governments in accordance with the Tax Code of the Russian Federation. When calculating them, the total inventory value of the taxable object and the method of its use are taken into account.

Other taxes to the municipal budget

In addition to land plots and municipal property, the following are subject to local taxation:
advertising;
construction of production facilities in resort areas;
resale of cars and computer equipment;
maintenance of housing facilities and social and cultural spheres.
In addition to local taxes, each municipality has its own fee system. The share of funds going to local budgets is not the same, and varies from 0.7 to 17%, depending on the specifics of a particular area, as well as on the peculiarities of the formation of the local budget.

It states that the objects of taxation are the fixed assets of the organization for which accounting is kept in account 101.00, in accordance with Instruction No. 157n. At the same time, there are certain benefits for public sector institutions.

In the new article we will examine in detail the topic of property of public sector institutions that is exempt from taxation.

What property is exempt from property tax?

Returning to the above-mentioned Article 374 of the Tax Code of the Russian Federation, we will designate a list of property that is completely exempt from tax.

According to the law, the following are not recognized as objects of taxation:

• land, water bodies and natural resources;
• fixed assets of executive authorities and other law enforcement agencies;
• objects of cultural heritage: historical and cultural monuments;
• nuclear installations used for scientific purposes. This also includes storage facilities for radioactive substances and waste, nuclear materials;
• icebreakers, ships with nuclear power plants and nuclear technology service ships;
• space objects;
• property belonging to the first or second depreciation group of the Classification of fixed assets.

Property of the state treasury of the Russian Federation, a constituent entity of the Russian Federation and a municipal entity is also not subject to tax. According to the articles and the Civil Code of the Russian Federation, such property is not assigned to institutions with the right of operational management or economic management in accordance with the articles and the Civil Code of the Russian Federation. This property is not taken into account as part of fixed assets, and, accordingly, its value is not taken into account when determining the tax base for property tax (articles and Tax Code of the Russian Federation).

Property tax in the regions

It is worth noting that property tax is regional. Therefore, along with the Tax Code of the Russian Federation, the laws of the constituent entities of the Russian Federation apply to this tax, which may provide for additional benefits.

Let's give an example: according to clause 1 of part 1 of article 4 of the Moscow City Law of November 5, 2003 No. 64 “On the property tax of organizations”, autonomous, budgetary and state institutions of the city of Moscow, as well as intra-city municipalities in the city of Moscow, are exempt from paying the tax. However, this benefit does not apply to property leased (Part 3 of Article 4 of Law No. 64)

Tax on property received from the founder

In 2015, new benefits appeared that exempt public sector institutions from property tax. According to paragraph 25 of the above-mentioned Article 381 of the Tax Code of the Russian Federation, movable property registered as a fixed asset in 2013 is exempt from taxation.

There is an exception to this rule. Tax is imposed on movable objects registered when:

• reorganization or liquidation of legal entities;
• transfer between related parties.

Because of these rules, some accountants wonder whether movable property received from the founder is exempt from tax. According to Russian legislation, for tax purposes, a state (municipal) institution and the body exercising the functions and powers of the founder in relation to this institution are not recognized as interdependent persons.

The fact is that the property of a state (municipal) institution is assigned to it with the right of operational management, and by right of ownership belongs to the state, a subject of the Russian Federation or a municipal entity. The functions and powers of the founder are performed by:

• authorized federal executive body;
• executive authority of a constituent entity of the Russian Federation;
• local government body.

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While the land plot is owned by the municipality, it is not subject to taxation due to the absence of a land tax payer. This conclusion was reached by the Thirteenth Arbitration Court of Appeal.

The Committee for the Management of Municipal Property and Land Relations of the Municipal Municipality “Zelenogradsky District” appealed to the arbitration court with a statement of claim to invalidate the decision of the territorial Federal Tax Service to bring to justice for committing a tax offense. The said offense, according to the tax authority, was that the plaintiff did not pay land tax for the plots that were under his jurisdiction. The court of first instance satisfied the claims and overturned the decision of the Federal Tax Service on the assessment of land tax. The arbitrators noted that their decision was based on the fact that the plaintiff was not the owner of the disputed land, but only exercised the powers of the owner on behalf of the Zelenogradsky District municipality. The Thirteenth Arbitration Court of Appeal, to which the losing party filed a complaint, by decision dated June 15, 2015 No. 13AP-9746/2015 in case No. A21-9107/2014, upheld the decision of the trial court. The arbitrators indicated that, in fact, the disputed land plot was in the treasury of the Zelenogradsky District municipality and was managed by the Zelenogradsky District Municipal Administration. In accordance with the provisions of Article 65 of the Land Code of the Russian Federation, the use of land in the Russian Federation is paid. The procedure for calculating and paying land tax is determined by the legislation of the Russian Federation on taxes and fees. Thus, according to the provisions of Article 387 of the Tax Code of the Russian Federation, land tax is required to be paid in the territories of all municipalities. In accordance with Article 388 of the Tax Code of the Russian Federation, payers of land tax are legal entities and individuals who own land plots in accordance with the right of ownership, the right of permanent use or the right of lifelong inheritable possession. Legal entities, in accordance with the provisions of Article 48 of the Civil Code of the Russian Federation, are organizations that have separate property in their ownership, economic management or operational management and are liable for their obligations with this property. Legal entities can, on their own behalf, acquire and exercise property and personal non-property rights, bear responsibilities, and act as plaintiff and defendant in court. In addition, all legal entities must have an independent balance sheet or budget. However, the Civil Code of the Russian Federation does not classify the Russian Federation, the constituent entities of the Russian Federation and municipalities as legal entities, but only applies to them the rules defining the participation of legal entities in relations regulated by civil law. Thus, Article 124 of the Civil Code of the Russian Federation provides that the Russian Federation, the constituent entities of the Russian Federation: republics, territories, regions, federal cities, autonomous regions, autonomous districts, as well as urban, rural settlements and other municipalities act in relations regulated by civil law , on an equal basis with other participants in these relations - citizens and legal entities. In this case, the rules defining the participation of legal entities in relations regulated by civil law are applied to all subjects of civil law, unless otherwise follows from the law or the characteristics of these subjects. In accordance with the legal position set out in the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated July 23, 2009 N 54 “On some issues that arose in arbitration courts when considering cases related to the collection of land tax,” the payer of land tax is the person who is indicated in the Unified State Register of Taxpayers as having the right of ownership, the right of permanent use or the right of lifelong inheritable possession of the corresponding land plot. In this case, the obligation to pay land tax arises from the moment of registration of one of the named rights to the land plot, that is, making an entry in the register, and terminates from the day of making an entry in the register about the right of another person to the corresponding land plot. Thus, if land plots belong to the Russian Federation or constituent entities of the Russian Federation or municipalities, then before these land plots are acquired into ownership by legal entities or individuals or before they are granted on the basis of the right of permanent use, there is no land tax payer in relation to such land plots.

The question of whether taxation should arise when making transactions with municipal property still remains controversial, since it is closely related to the public legal nature of such subjects of law as municipalities and local governments.
Elena MIKHAILOVA, Deputy Chief of Staff of the Federation Council Committee on Local Self-Government

LSG in civil law relations

Civil Code in Art. 124 indicates that municipalities, like other public entities - the Russian Federation and the constituent entities of the Russian Federation - participate in civil legal relations on an equal basis with legal entities and citizens. The rules governing the participation of legal entities in relations regulated by civil law are applied to public entities, unless otherwise follows from the law or the characteristics of these entities. Let us draw attention to the fact that it is municipalities, and not local government bodies, that are named as participants in civil law relations.
As for local government bodies, their position in civil law relations is defined in Art. 125 of the Civil Code of the Russian Federation. They, like other government bodies, can through their actions acquire and exercise property and personal non-property rights and obligations, appear in court within the framework of their competence established by acts defining the status of these bodies, but - most importantly - not in their own interests, but from named after municipalities. Thus, local government bodies, when making transactions and appearing in courts in civil cases, only represent the interests of municipalities and act on their behalf. If municipal property is privatized, or municipal property is leased, or other transactions are made with treasury property, the transferring party in these transactions is the municipality itself as the owner of the property. However, just as participation in transactions of any legal entity is ensured by its representative, who signs the relevant agreement or other document, so transactions with the participation of municipalities are carried out by representatives of these legal entities - local government bodies. The same can be said about participation in courts to resolve civil disputes - Art. 125 of the Civil Code of the Russian Federation indicates local government bodies as representatives of plaintiffs and defendants, which are the municipalities themselves.
The attitude towards a municipal entity as a subject of law is complicated by the fact that its representatives - local government bodies - are endowed by law or through the charter of a municipal entity with the status of a legal entity and act as municipal institutions. In this article, we will not discuss the expediency and necessity of such a step by the legislator as giving local governments the status of legal entities and extending the legal regulation of institutions to them, but will try to show how this approach affects the resolution of some of the most pressing problems in the field of taxation of transactions with the participation of municipalities.
Since the most common civil law transactions with municipal property are transactions of privatization and leasing of this property, the question arises: should income and value added taxes be paid in these cases and, if so, who is the payer of these taxes?

In theory

If we proceed from the above-mentioned civil law structure of relations between municipalities as owners of municipal property and local government bodies as representatives of these owners, then the obvious conclusion should be made that the parties to the lease and alienation agreements of municipal property are not local government bodies, and the municipalities themselves. Those local authorities that, by charter and other local acts, are vested with the authority to dispose of municipal property - local administration, committees or departments managing municipal property - must be indicated in the relevant agreements as persons acting on behalf and in the interests of municipalities. This conclusion also follows from the statement of the unconditional fact that in these cases, local government bodies do not dispose of the property that belongs to them, but the property of the municipality in the status of treasury property.
As is known, the treasury, according to Art. 215 of the Civil Code of the Russian Federation is property that is not assigned to municipal enterprises or municipal institutions. As follows from the same article, such assignment is carried out only on the basis of the rights of operational management (for institutions and state-owned enterprises) or economic management (for unitary enterprises). The question arises: can a local government body have separate municipal property? Since according to Art. 41 of Federal Law No. 131-FZ “On the General Principles of the Organization of Local Self-Government”, a local government body acquires the status of a legal entity in the form of a municipal institution, and according to the Civil Code, the owner (municipal entity) can assign property to his institution with the right of operational management, this is possible. Another question: is there any practicality in such actions? Most often, local government bodies are assigned the status of municipal institutions to the property that is used to support the activities of this body (inventory, premises, transport). In this article, we are not considering transactions with such property, but transactions with treasury property, which, as a rule, are carried out by committees (departments) for property management of local administrations that have the status of legal entities - municipal institutions.
But, as stated above, by transferring treasury property for rent, property management committees do not manage the property assigned to them (that is, not the separate property of a legal entity), but the treasury property and, therefore, act in the agreement as representatives of the direct owner - the municipal education, acting in its interests within the framework of its powers. The fact that property management committees, following Instruction of the Ministry of Finance of Russia No. 25 on budget accounting, reflect treasury property on their balance sheet, should not in any way affect the assessment of their status in transactions with this property as exclusively representatives of the owner.
Income tax: the position of YOU
Similar conclusions are confirmed by a number of judicial precedents. In particular, in the decision of the Supreme Arbitration Court of November 19, 2003 No. 12358/03, with reference to the above-mentioned articles of the Civil Code of the Russian Federation, it is stated that the founder of a municipal unitary enterprise is not the local government body, but the municipal entity itself. At the same time, local government bodies manage municipal property and exercise the rights of the owner on behalf of the given municipality. A very important remark was made here that a municipal entity cannot be recognized as an organization in the sense in which this term is used by Art. 11 of the Tax Code of the Russian Federation.
This conclusion is based on the fact that, according to Art. 19 of the Tax Code of the Russian Federation, taxpayers and payers of fees are organizations and individuals who, in accordance with the code, are obliged to pay taxes and (or) fees. And according to Art. 11 of the Tax Code of the Russian Federation for the purposes of the code and other acts of legislation on taxes and fees, the concept of organization means a legal entity formed in accordance with the legislation of the Russian Federation (hereinafter referred to as Russian organizations).
Thus, in any situation where a party to a civil transaction is not a local government body, but the municipality itself, there is no taxpayer on the municipality’s side, since the municipality is not a legal entity (organization) and therefore cannot be recognized as a taxpayer . The fact that often a local government body with the status of a legal entity is indicated as a party in contracts or other transactions (for example, a property management committee as a municipal institution) should not lead to taxation if the object of the transactions is treasury property that is not assigned to any one of the organizations. Indeed, in this case, although the committee has the status of an organization, it does not become a taxpayer, since it does not dispose of its property and not in its own interests, but represents the interests of the entire municipality.

Arbitration practice

A similar approach can be considered established in the practice of considering disputes between tax authorities and local governments regarding the collection of income tax in connection with the leasing of municipal treasury property or the lease of land plots from undemarcated state property.
Thus, the tax inspectorate presented demands to the administration of the Gromadsky Village Council of the Uyarsky District of the Krasnoyarsk Territory to pay income tax in the form of proceeds from the rental of land plots. According to the tax inspectorate, in accordance with the current legislation, organizations, regardless of their organizational and legal form, in the case of carrying out business activities, including leasing property, are payers of income tax. Obviously, the administration (authority) was classified by the tax inspectorate as ordinary taxpayers, since outwardly it had the usual characteristics for organizations: the status of a legal entity - a budgetary institution.
However, the courts did not agree with this approach, pointing out that according to the Charter of the Gromadsky Village Council, the village administration is the executive and administrative body of local self-government, having the rights of a legal entity. In accordance with the Charter, the administration leases municipal property, exercises other powers assigned to it by the said Charter and decisions of the village Council of Deputies, as well as state powers assigned to it by federal and regional laws.
The court indicated that “the disputed funds received by the administration from leasing property are not profit from business activities, since they were received from the exercise of the powers of the municipality.” These funds were received directly by the budget of the municipality, and “budget revenues are not income of the administration, therefore, the administration did not include the above-mentioned funds in the tax base for income tax.”
The Federal Arbitration Court of the Ural District supported the municipal institution “Property Management Committee of the Administration of the City of Gaya” in a dispute about invalidating the decision of the tax inspectorate on additional assessment of income tax in connection with the “illegal non-inclusion by the committee in the income of amounts received from the sale and rental of municipal property." The court found that the committee sold and leased municipal property that was not assigned to it, that is, it performed the functions provided for by the regulations approved by the administration of the city of Gaya, and the funds were fully credited to the local budget. The court came to the conclusion that the committee did not have a subject to income tax (Article 247 of the Tax Code of the Russian Federation).
The same approach of the Federal Arbitration Court of the Ural District is set out in connection with a similar dispute in the Serov City District. The court proceeded from the fact that “income from the use of property is not subject to income tax, since the disputed property is municipal, is not included in the balance sheet of the committee, and is not provided to the committee on a proprietary or other right to carry out independent activities.”
As we see, the arguments of the courts in such cases boil down to the following:
1) in a lease transaction of municipal property, the local government body (committee, department), although it is a legal entity, acts not on its own behalf and not in its own interest, but on behalf of and in the interests of the municipality;
2) the first thesis is confirmed by the fact that the committee does not manage its own property (not separate on its balance sheet) and does not receive income from it - the fee goes to budget revenue.
Thus, the main grain of disputes lies in the tax authorities’ misunderstanding of the public legal nature of government bodies and the extension to them of the usual standards applied to so-called economic entities, that is, to organizations engaged in business activities.
VAT: conflicting precedents
If it was possible to form a more or less stable practice for lease transactions, then with regard to value added tax in relation to transactions for the sale of public property, it remains contradictory, including due to the unclear position of the legislator.
Following the above logic, we can talk about the absence of a VAT payer in the case of transactions with public property that is not assigned to any entity. This conclusion is confirmed by practice at the level of higher courts. In particular, the Presidium of the Supreme Arbitration Court of the Russian Federation in cases related to claims from tax authorities regarding the calculation of VAT on the sale of state-owned land plots has repeatedly pointed out that sellers in these transactions perform the functions of transferring land plots to the buyer, acting on behalf of a public entity, or in the exercise of powers expressly conferred on them by law. For example, when assessing a transaction for the sale of a plot of federal property, the Supreme Arbitration Court did not recognize the seller - the regional branch of the Russian Federal Property Fund - as a VAT payer. The absence in principle of the obligation to pay VAT led to the recognition that it was unlawful to impose such an obligation on the buyer by fixing the amount of tax in the price of the purchased plot.
A similar approach is set out in Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 1, 2005 No. 15250/04: an increase in the price of land by the amount of value added tax does not comply with the law, since the seller - a branch of the fund - acted on behalf of the Russian Federation and therefore was not a tax payer . The Supreme Arbitration Court of the Russian Federation adheres to the same position with regard to transactions carried out with property by local government bodies.
This position does not lose its relevance, despite the fact that the Tax Code of the Russian Federation itself has a norm that exempts operations with land from VAT (Clause 6, Part 2, Article 146). In this case, the issue of taxation of transactions with other objects of public property continues to remain controversial. Judicial practice on this issue is ambiguous. Thus, the Federal Antimonopoly Service of the Urals District6 recognized privatization transactions of municipal property sold at auction as not subject to taxation, with reference to the fact that the property management committee, in the manner established by the legislation on privatization, carried out transactions for the sale of municipal property within the framework of the exclusive powers granted to it.
On the other hand, in one of the decisions of the Arbitration Court of the Sverdlovsk Region, the property management committee was recognized as a VAT payer for the transfer of municipal property for free use. The court referred to the fact that these transactions do not fall under the list of tax-exempt ones. The committee's arguments that it is a local government body and makes transactions as an authorized person were not assessed by the court.

The legislator's word

The latest changes in tax legislation, in particular those introduced into Art. 161 of the Tax Code of the Russian Federation (Federal Law of November 26, 2008 No. 224-FZ). In accordance with them, “when selling (transferring) on ​​the territory of the Russian Federation state property that is not assigned to state enterprises and institutions, constituting the state treasury of the Russian Federation, the treasury of a republic within the Russian Federation, the treasury of a territory, region, federal city, autonomous region, autonomous district, as well as municipal property not assigned to municipal enterprises and institutions, constituting the municipal treasury of the corresponding urban, rural settlement or other municipal entity, the tax base is determined as the amount of income from the sale (transfer) of this property, taking into account tax. In this case, the tax base is determined separately for each transaction involving the sale (transfer) of the specified property. In this case, tax agents are recognized as buyers (recipients) of the specified property, with the exception of individuals who are not individual entrepreneurs. These persons are obliged to calculate by calculation method, withhold from paid income and pay the appropriate amount of tax to the budget.”
As we can see, the legislator recognizes the need to charge VAT in transactions with public property, without changing Art. 143 of the Tax Code of the Russian Federation, which determines that taxpayers of this tax are organizations and individual entrepreneurs. Since the transfer of public property is carried out by authorities, and they are legal entities, that is, organizations in the form of budgetary institutions, it turns out that the authorities themselves become VAT payers, although this contradicts the above approaches. To avoid this contradiction, changes were made specifically to the article defining the specifics of determining the tax base by tax agents, who in the above transactions with public property become recipients (buyers) of this property. They have the obligation to calculate and pay tax “from the income paid,” that is, from the amount they must pay for what they received (purchased). However, according to Art. 24 of the Tax Code of the Russian Federation, tax agents are persons who, in accordance with the code, are entrusted with the duties of calculating, withholding from the taxpayer and transferring taxes to the budget system of the Russian Federation. But who is the taxpayer? In our opinion, in transactions with public property not assigned to organizations, there is no taxpayer and, accordingly, the tax agent should not have an obligation to pay tax (since this obligation is derived from the obligation to pay tax).
Taking into account the changes made, it is difficult to predict how the courts will consider disputes regarding the payment of VAT on privatization transactions and other transactions involving the disposal of public property. Questions immediately arise about the formation of the price when selling property at auction: it can hardly be considered correct to impose the obligation to pay the amount of VAT in excess of the price formed during the auction, since this can be appealed by the buyer with reference to the unlawful imposition of the taxpayer’s responsibility on him. If the buyer is an individual, then according to the specified norm he cannot act as a tax agent, therefore, the purchase price will go entirely to the budget of the public entity - the seller. In this case, in our opinion, there will be no tax payment at all, since the seller, the government body, represents the interests of the public owner and in this sense is not a taxpayer. Hence, a “skew” arises in the assessment of the obligation to pay VAT: if the property is sold to a legal entity or individual entrepreneur, the tax will be calculated and paid by them from the sale price, although the real figure of the taxpayer is not seen, if there is no tax to an individual.
In our opinion, the solution to this problem lies not in changing the “technology” of tax calculation and payment, but in clearly defining the legal status of public entities as subjects of legal relations, both civil and tax.

Hello!

According to paragraph 1 of Art. 373 of the Tax Code of the Russian Federation, taxpayers of the property tax of organizations are organizations that have property recognized as an object of taxation in accordance with Article 374 of the Tax Code.

State (municipal) institutions are payers of property tax and land tax (land plots are assigned to them on the right of permanent (indefinite) use). The peculiarity here is that autonomous, budgetary and state institutions pay these taxes not from their own funds. In fact, the taxpayer in this case is the state itself - the Russian Federation, its constituent entities, as well as municipalities that create state (municipal) institutions, but this does not exempt the institution from complying with the requirements for the taxpayer, which in this case is a legal entity, on the balance sheet which the corresponding property is listed.

According to paragraph 1 of Art. 374 of the Tax Code of the Russian Federation, the object of taxation on the property of an organization for Russian organizations is movable and immovable property (including property transferred for temporary possession, use, disposal or trust management contributed to joint activities), accounted for on the balance sheet as fixed assets in accordance with established accounting procedures.

At the same time, according to paragraph 1 of Art. 375 of the Tax Code of the Russian Federation, the tax base for property tax is defined as the average annual value of property recognized as an object of taxation. When determining the tax base, property recognized as an object of taxation is taken into account at its residual value, formed in accordance with the established accounting procedure approved in the accounting policy of the institution.

According to the Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated November 17, 2011 N 148<Обзор практики разрешения арбитражными судами дел, связанных с применением отдельных положений главы 30 Налогового кодекса Российской Федерации>) the case materials indicate that the rural settlement council is a representative body of local self-government that carries out public functions on behalf of the municipality. The property of the rural settlement council, in particular a car, furniture and computer equipment, which is in municipal ownership, is used by the rural settlement council exclusively for the implementation of public functions determined by the charter of the municipality. By virtue of paragraph 1 of Article 373 of the Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation, the Code), all legal entities that have property recognized as an object of taxation in accordance with Article 374 of the Tax Code of the Russian Federation are payers of corporate property tax. The rural settlement council is registered as a legal entity - institution, which is confirmed by an extract from the Unified State Register of Legal Entities. At the same time, the property assigned to him under the right of operational management and accounted for in accordance with the legislation on accounting on the balance sheet as fixed assets is recognized as subject to taxation on the property of organizations.

Therefore, failure by the council of a rural settlement to submit a tax return within the time limit established by paragraph 3 of Article 386 of the Tax Code of the Russian Federation is a tax offense and entails liability under paragraph 1 of Article 119 of the Code. In connection with the above, the decision of the tax authority to bring the village council to tax liability is lawful. The cassation court upheld the decision of the appellate court.

In this regard, you will have to file a tax return.