Income tax: nuances of temporary accounting of exchange differences for 2022
By the Law of 26.03.2022 No. 67-FZ (subp. “b” p. 12, subp. “b” clause 13 of Article 2) introduced a temporary procedure for the recognition for profit taxation of exchange differences arising in the period from 01.01.2022 to 31.12.2024.
Temporary order in 2022:
• did not change the rules for including in non-operating expenses on the last calendar day of the month the amounts of negative exchange differences on claims (obligations), the value of which is expressed in foreign currency (except for advances);
• allowed to include in non-operating income positive exchange differences on the specified requirements (obligations) on the date of their termination (execution).
The temporary procedure applies to the same requirements and obligations that were revalued in accordance with the procedure established before 2022 (letters of the Ministry of Finance dated 10.06.22 No. 03-03-06/1/55248 , from 17.05.22 No. 03-03-06/2/45448 ). Article 11 of the Tax Code does not define the concepts of “requirements (obligations)”.
The order of calculation of exchange rate differences remained the same. Liabilities, the value of which is expressed in foreign currency, and property in the form of currency values are converted into rubles at the official exchange rate set by the Bank of Russia:
• on the date of transfer of ownership of the specified property, termination (fulfillment) of claims (obligations);
• on the last day of the current month – depending on what happened earlier (paragraph 2 of paragraph 8 of Article 271 and paragraph 2 of paragraph 10 of Article 272 of the Tax Code).
In the letter of the Federal Tax Service dated 07.10.2022 No. SD-4-3/13426@ it is said that the current tax legislation does not provide for a reduction in 2022 of the amount of expenses recognized for profit tax purposes in the form of negative exchange rate differences for calculated positive exchange rate differences for which the moment of recognition in income has not occurred both collectively between all claims and obligations, and and between months within the reporting (tax) period for corporate income tax.
In 2022, the taxpayer’s claims (obligations) in foreign currency:
• positive exchange differences were taken into account only on the date of termination (fulfillment) of obligations;
• negative exchange differences were included in non-operating expenses in the same order, that is, on the date of termination (fulfillment) of claims (obligations) and (or) on the last day of the current month (depending on what happened earlier).
Legislative amendments
By the Law of 19.12.2022 No. 523-FZ (subp. “b” clause 3 of Article 1) amendments were made to clause 7 of Article 272 of the Tax Code. This norm was supplemented by sub-clause 6.2, which invited the income tax payer to make a decision regarding the date of accounting for non-operating expenses of negative exchange differences that arose in 2022 for claims that were not terminated as of 31.12.2022, including claims under a bank deposit agreement, the value of which is expressed in foreign currency. This date is recommended to recognize the date of repayment of the debt.
On the adoption of such a decision, the taxpayer should send a free–form notification to the tax authority:
• within the deadline set for filing a corporate income tax return for the tax period of 2022 – before 03/25/2023;
• when submitting an updated declaration for the last reporting period of 2022.
When making such a decision, the taxpayer’s amounts of advance income tax payments for the reporting periods of 2022 will increase, in which a negative exchange rate difference was taken into account in non-operating expenses. At the same time, penalties will not be accrued for late fulfillment by the taxpayer of the obligation to pay the corresponding advance payments, provided that the tax is paid for 2022, taking into account the additional amounts no later than 03/28/2022.
The provisions of sub-clause 6.2 of Clause 7 of Article 272 of the Tax Code apply to legal relations on the accounting of expenses in the form of negative exchange rate differences that have arisen since 01.01.2022 (clause 4 of Article 5 of Law No. 523-FZ).
