Compensation for goods destroyed by shelling: the State Tax Service explained when an individual entrepreneur must pay tax

An individual entrepreneur on a simplified taxation system may not include in his income insurance compensation for goods lost or destroyed as a result of shelling during transportation. However, if the money for the lost cargo is paid by the carrier, the taxation rules will be different.

The State Tax Service told about the features of such payments.

The key is not the fact of receiving compensation, but who exactly pays the money and what legal status such a payment has.

The insurance company paid the money – it is not included in the income of an individual entrepreneur

If the goods were insured, and after its loss or damage the insurance company made a payment in accordance with the insurance contract, the money received by the entrepreneur is considered insurance compensation.

The State Tax Service explains that in accordance with the norms of the Tax Code, such amounts are not included in the income of an individual entrepreneur who is a payer of a single tax.

Accordingly, it is not necessary to tax them as income from entrepreneurial activity.

If the carrier pays, the rules are different

A different situation arises if the goods were lost or damaged during transportation, and the carrier compensates the entrepreneur for their cost directly.

For example, an individual entrepreneur can apply to the carrier with a claim for the loss of cargo and receive appropriate compensation from him.

In this case, the payment does not have the status of insurance compensation.

Therefore, the funds received from the carrier must be included in the income of the individual entrepreneur and taxed in accordance with the rules of the selected single tax group.

When compensation becomes income

The date of receipt of income for the entrepreneur is the day when the funds actually arrived.

This rule applies regardless of the form of payment – cash or non-cash.

The income itself is determined based on the accounting data maintained by the single tax payer.

Thus, it is fundamentally important for an individual entrepreneur to correctly determine the nature of the payment received:

insurance compensation from an insurance company – is not included in the income of the individual entrepreneur;
compensation for the cost of goods from the carrier is included in income and is subject to appropriate taxation.
The State Tax Service advises paying attention to documents

At the same time, payments that seem the same at first glance may have a different legal nature. That is why entrepreneurs should pay special attention to the documents that formalize the compensation.

“In each specific situation, the terms of the business transaction, the nature of the payment, and the primary documents are important. They confirm whether the funds received are insurance compensation or compensation from the carrier, which determines the procedure for their taxation,” the State Tax Service explained.

So, if a business lost goods due to Russian shelling during transportation, the fact of the destruction of the cargo itself does not determine the tax consequences of the compensation. What is decisive is who the funds came from and on what legal basis they were paid.