Individual entrepreneurs who are just starting commercial activities, as well as legal entities, have the opportunity to choose one of two taxation systems: simplified or general. In our article, we will talk about a simplified form of taxation for individual entrepreneurs, the amount of tax and other important aspects on the topic.
Category concept
A simplified taxation system (abridged version - USN) should be understood as a special tax regime implying a certain procedure for paying tax payments and focused on representatives of medium and small businesses. A simplified tax for an individual entrepreneur or legal entity implies exemption from many payments, simplified reporting forms, as well as relative ease of accounting. Obviously, the listed conditions attract businessmen and determine their choice in advance. Today, most entrepreneurs in the Russian Federation work in this special mode.
The essence of the system
Consider the essence of tax on a simplified taxation system for entrepreneurs and legal entities. It is worth noting that businessmen who choose a simplified system do not pay to the budget:
- Value Added Tax (VAT). An exception here is the situation if commercial products are imported into the territory of the Russian Federation.
- Property tax. In addition to objects that are valued in accordance with the cadastral value, as well as those that are included in local government structures in a special list.
- Personal income tax on income from economic activities. It must be added that in this case winnings and prizes, bank interest, dividends are not taken into account.
So, instead of the taxes listed, a simplified taxation system for individual entrepreneurs is used. What taxes are not paid, we reviewed. However, what amount is payable? Here we are talking about a fixed amount of payments. It is important to add that taxpayers who conduct their activities in a simplified regime, in any case, bear a reduced burden in terms of taxes, and also submit much less reporting.
To whom is it unprofitable?
Before choosing a simplified tax (STS) for an individual entrepreneur or organization, it is advisable to answer the following question: will VAT payers be among your clients? If the answer is yes, then it will be unprofitable for them to cooperate with you, because they will not be able to refund the value added tax from the cost of purchased commodity products (services, works). So, with a high probability they will refuse to cooperate, especially when it comes to the large amount of the contract. It is much more profitable for VAT payers to work with the same value-added tax payers.
It must be borne in mind that the client can be retained. To do this, it is advisable to give him a discount on the amount of tax. However, this approach will be disadvantageous for you. If the number of your clients will include the same simplifiers, individuals or payers of PNS, UTII, then we can safely consider a simplified tax for an individual entrepreneur or organization. After all, it promises many benefits.
We found out that it is usually unprofitable for VAT payers to purchase marketable products or to use the services of counterparties working on a “simplified” basis.
Tax rate for individual entrepreneurs
Next, we will analyze the current tax rate for 2019 for individual entrepreneurs using the simplified system. So, entrepreneurs work at a rate of 15% or 6%. It depends on the chosen object of taxation:
- "Revenues."
- "Income minus expenses."
It is worth noting that in some regions of Russia other tax amounts may be applicable in accordance with the simplified form of taxation for individual entrepreneurs, lower. The fact is that the Act relevant in the country gives the right to entities to determine their own rate in the range from 1 to 6% for the “Income” object, and also from 7.5 to 15% - for the “Income minus expenses” object.
In addition, with luck, some businessmen may not pay taxes at all for the first two years. This is argued by paragraph 4 of Article 346.20, which gives the subjects of the Federation the right to introduce tax holidays for entrepreneurs working on a simplified system.
An entrepreneur who has chosen a simplified tax for individual entrepreneurs can take advantage of these holidays in the following cases:
- He is registered as an individual entrepreneur for the first time.
- Engaged in social, industrial, scientific activities or provides household services to the population.
- Vacations are introduced through the law of the subject of the Russian Federation, where an individual entrepreneur is registered.
- The income from the types of activities listed in the second paragraph for the simplified tax for individual entrepreneurs for the year is at least 70 percent of the total revenue.
In this case, local authorities have the right to introduce additional restrictions on the provision of vacations on:
- average number of employees during the year;
- the maximum amount of income received per year.
How to calculate the simplified tax for individual entrepreneurs in your region, whether tax holidays are relevant and on what conditions - all these and other nuances can be found in the local branch of the Federal Tax Service.
So, we conclude. Single simplified tax rate for individual entrepreneurs:
- 6 percent - for the “Income” object;
- 15 percent - for the object “Revenues minus expenses”;
- 0 percent - for entrepreneurs with the right to receive tax holidays.
Do not forget that the constituent entities of the Federation have the right to establish reduced tax amounts for individual entrepreneurs according to a simplified system.
Who has the right to use the simplified tax system?
For newly registered organizations or individual entrepreneurs, it is enough to make sure that their type of activity is not prohibited for the use of special regime. In accordance with article 346.12 of the Tax Code of the Russian Federation, lawyers and notaries, insurers, gambling organizers, private employment agencies, excisable goods producers are not allowed to use a single simplified tax for entrepreneurs. Also, it is not available to professional participants in the securities market.
Already carrying out their activities, individual entrepreneurs can switch to a simplified tax for individual entrepreneurs only when the number of employees does not exceed one hundred people.
The Tax Code in force on the territory of the country has a restriction on the residual value of fixed assets of 150 million rubles, and also on income for the nine months of the previous year of 112.5 million rubles. However, these restrictions apply only to organizations. Individual entrepreneurs have the right to pay annual tax for individual entrepreneurs according to a simplified system and do not look at the income of the previous year and the cost of fixed assets. That is why in the notification according to form 26.2-1, these indicators are not filled out by entrepreneurs. However, subsequently, that is, already working on a simplification, they must comply with these limits.
It should be noted that those entrepreneurs who have more than 100 employees and those who develop the activities referred to in paragraph 3 of Article 346.12 of the current Tax Code in the Federation are not entitled to switch to a simplified regime.
STS with the object "Revenues"
We examined what tax on a simplified system for entrepreneurs is relevant today, and also listed the relevant activities and features of payments. Next, we will analyze a simplified system with the “Income” object.
Taxpayers who choose this option consider tax payments solely on income. That is why the factor of how much the entrepreneur suffered losses does not matter for taxation. What should be understood by the term "income"? This is the money that a businessman receives from buyers for his goods, services or work, as well as non-operating income and property received on free terms. Non-operating income is nothing other than income from participation in other organizations, fines and penalties in favor of an individual entrepreneur, exchange rate differences, interest on loans, surpluses, debts written off, etc. (for a complete list, see article 250 of the Tax Code of the Russian Federation).
Payment calculation
How to pay simplified IP tax with the “Income” object? To calculate the payment to the state budget, it is necessary to take the amount of cash receipts for the reporting period and multiply by the tax rate. For clarity, we will analyze the corresponding example.
An individual entrepreneur who chose a simplified system earned over a certain period 100,000 rubles. The tax payment in this case amounted to 6 percent of this amount, that is, 6,000 rubles, and this did not depend on how much the businessman had in the presented term.
It is important to keep in mind that an individual entrepreneur is obligated to account for income in a special book of accounting. Only revenue should be entered into it. The expense part of the table is not filled. It is necessary to add that through a service called "My business" KUDiR is formed automatically. Revenues are recorded on a cash basis, in other words, at the time of their receipt at the cash desk or to the current account. In the process of conducting a tax audit, employees of the Federal Tax Service in this case do not check the expenditure operations of a simplified entrepreneur. In addition, on a simplified system with the “Income” object, only income is shown in the declaration and KUDiR. Tax payments are also paid off solely on income. Expenses do not participate in taxation.
Simplified system with the object “Revenues minus expenses”
This system is a bit more complicated. Having considered how to pay the simplified IP tax with the “Incomes” object, it is advisable to proceed to it. In this case, only the difference between expenses and incomes is taxed, there are some distinctive features of accounting, as well as the concept of a minimum tax payment. For clarity, we will analyze an example of calculation.
The businessman’s revenue for a certain period is 350,000 rubles. Costs - 220,000 rubles. The tax payment for the period can be calculated as follows: (350 - 220 thousand) x 15% = 19 500 rubles.
It must be borne in mind that not all expenses are accepted for deduction. Only those specified in Art. 346.16 Tax Code operating in the territory of the Russian Federation. All of them must be documented and justified. The fact that the list of expenses that are deducted from income is closed is to some extent an advantage for the entrepreneur. The fact is that this minimizes the likelihood of disputes with tax officials, as, for example, in the case of tax payments on profits.
Consider the features of accounting. It is worth noting that everything is quite simple with revenues: they are also taken into account when entering the cash desk or to the current account. But the cost is somewhat more complicated, because you need to take into account certain rules. So, you should enter the costs in KUDiR only when the marketable products or services are both shipped and paid. If any of the conditions presented is not implemented, it is impossible to take into account expenses in the process of calculating payments to the state budget. In other words, in KUDiR there will be a date for either payment of a commodity product or its shipment (depending on which of the named events occurred later). Consider an example.
The contingent LLC paid the prepayment for furniture to the supplier on December 20. The latter delivered the goods on January 15th. The costs of his organization will reflect only in the new year, that is, January 15. If the furniture was delivered in December, and paid for it only in January, the expenses would also have been reflected in January.
The second rule states that the value of marketable products purchased for resale can only be expensed after sale. We give an example. IP sells and installs air conditioners. In March, he acquired five air conditioners, while the cost of each amounted to 15 thousand rubles. During March, he sold and installed three air conditioners. So, they wrote down their cost (15 * 3 = 45,000 rubles) in costs at KUDiR in March. Moreover, the remaining two air conditioners in the IP warehouse were written off as expenses only after their sale.
And finally, the third rule assumes that the cost of fixed assets (acquisition, construction or reconstruction) refers to expenses only after they are put into operation and exclusively within the framework of the amounts paid. It must be borne in mind that the cost is written off in equal parts quarterly (as a rule, at the last date of the quarter) until the end of the year. In other words, if the purchase was made in the first quarter, then the write-off is relevant in 1/4 of the part during the year, if in the second - in 1/3 of the part, in the third - in 1/2 of the part, in the fourth - all the cost will be recorded in KUDIR the last date of the fourth quarter.
Minimum tax payment
What taxes are not included in the simplified taxation system of IP, we examined. It is worth noting that InIP, which has chosen the object of taxation “Revenues minus expenses”, pays to the state budget even when expenses exceed revenues.
When the reporting year ends, the tax payer must calculate two amounts:
- 15 percent of the difference between costs and revenue, that is, a regular tax payment;
- 1 percent of revenue.
If the second amount is larger, then it is the budget that is paid according to the results of the year (minus the indicated advance payments), and not the tax payment calculated in the usual way. Consider an example.
According to the results of labor activity for the year, entrepreneur P.'s income amounted to 2 million rubles, and expenses - 1.9 million rubles. It is advisable to do two calculations:
- (2,000,000 - 1,900,000) x 15% = 15,000 rubles.
- 2,000,000 x 1% = 20,000 rubles.
The minimum tax payment was more than usual. So, according to the results of the year, 20 thousand rubles should be paid to the state budget. If the entrepreneur transferred advances during the annual period, then the minimum tax must be paid minus them.
It should be borne in mind that the individual entrepreneur has the right to write down the difference between the minimum and ordinary taxes next year in expenses, and thereby reduce taxation income. In the analyzed example, the difference is 20,000 - 15,000 = 5,000,000 rubles. Next year, their P.I. has the right to add to expenses and subtract them from the tax base.
The minimum tax is calculated at the end of the year, but this rule does not apply to advance payments. Even if a businessman works at a loss to himself and the difference between costs and revenue is minus, he will still have to pay off the minimum tax payment.
It is important to know that on a simplified system with the object “Revenues minus expenses” the tax is paid from the difference between expenses and income. In the declaration and KUDIR show both this and that. In the process of accounting for expenses, certain standards must be observed. At the end of the year, in addition to the regular tax, the minimum should be calculated.
What kind of reporting?
It is important to know that only one declaration per year is prepared for a single tax. She is handed over to the Federal Tax Service Inspectorate no later than April 30 of next year. In addition, individual entrepreneurs must fill out a special book of accounting for income and expenses (KUDiR). According to the results of the year, they print it out and then flash it. It must be remembered that the inspectors of the Federal Tax Service may require it for inspection at any time.
If the entrepreneur has no employees, in addition to the declaration, he should not surrender anything. In turn, employers must provide certain documents to the following structures:
- Federal Tax Service: Certificate 2-PIT (every year); average headcount information (every year); calculation of insurance premiums (every quarter); Certificate 6-NDFL (every quarter).
- Pension fund: SZV-seniority form (every year upon dismissal of an employee on retirement; SZV-M form (every month).
- Social Insurance Fund (4-FSS report - every quarter).
If in the process of activity there is a need to pay personal income tax, VAT, declarations on them are submitted within the time period determined by the current legislation on the territory of the country. If there is a need to pay tax on the property complex, the entrepreneur pays only the amount that is indicated in the notice of the IFTS. However, the declaration does not surrender.
The annual declaration on the simplified tax system by individual entrepreneurs is submitted until April 30. Employers on a simplified system submit the same reporting as employers on other taxation regimes.
Conclusion
So, we examined the category of a single simplified tax for individual entrepreneurs: the pros and cons, the main features and distinguishing features. In addition, they provided illustrative examples for a full understanding of the theoretical part.
It is advisable to fix the material. So, how to switch to a simplified tax system?This procedure is extremely simple. It is only necessary to send a notice issued in accordance with form 26.2-1 to the Inspectorate for Taxes and Duties. Notifications may be submitted by:
- Newly created individual entrepreneurs together with registration documents or no later than thirty days after registration, in other words, from the date of entry of the corresponding entry into the Unified State Register of Enterprises.
- Individual entrepreneurs who are already engaged in a particular activity under a different taxation regime (until December 31 of this year).
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It is worth knowing that the newly registered individual entrepreneur will be among the payers of the simplified tax system from the first day of his economic activity, and the one that is switching from a different tax system will be directly from 01.01 the next year. Several other rules are relevant when switching from UTII. So, if a businessman for one reason or another has lost the right to use UTII without waiting for the calendar year to begin, he has the right to file a notice to use the simplified system within thirty days from the termination of the obligation to pay UTII.