Each entrepreneur wants to optimize taxation, so he chooses a regime that ideally matches the characteristics of the activity. Therefore, the question often arises, how to switch from UTII to the STS? The change of regime may be due to a change in the direction of work or other reasons. The procedure can be performed at any time, but it is necessary to notify the tax service about this in a timely manner. It is additionally important to make sure in advance that the operation of the individual entrepreneur or company complies with the requirements of the simplified tax system.
Who can execute the process?
Before moving from UTII to the STS, you need to make sure that the procedure can be performed by the entrepreneur. This right is enjoyed by:
- firms and individual entrepreneurs who worked on UTII, but decided to engage in another type of activity for which it is impossible to use UTII, so they switch to USN;
- enterprises for which the obligation to pay UTII ceases, as appropriate adjustments are made to the legislation of the region, therefore work in this tax regime is prohibited in a particular city;
- firms that during their work violate the requirements for UTII payers, therefore entrepreneurs are forced to choose a different system, and the most relevant choice is USN.
The transition procedure should be carried out exclusively with notification of this to the tax service. For this, two forms of transition from UTII to the STS are used, since initially it is necessary to deregister the imputed tax, and then register as a payer using a simplified system.
What documents are required?
Before moving from UTII to the STS, you need to prepare some documentation for this process. The following list of securities is required to complete the procedure:
- an application to remove an individual entrepreneur or company from the register as a UTII payer, and the process must be completed within 5 days after the termination of work under this regime;
- notification of the transition to the simplified tax system, compiled in a special form, enshrined in law.
Documents can be personally transferred to the tax inspector when visiting the branch of the Federal Tax Service, and they can also be sent to the institution electronically. A sample notification on the removal of a businessman from the register as a UTII payer can be studied below.
Differences USN from UTII
When switching to any mode, an entrepreneur must carefully evaluate all its features. The nuances of using USN or UTII include:
- when applying UTII, the tax on imputed income is paid, which depends on the chosen line of business;
- the imputed system is not accepted in many regions of the country;
- to use UTII it is necessary to work only in strictly limited areas of activity;
- when using the simplified tax system, you can choose two methods of calculating tax, since 6% of all income or 15% of profit may be charged, for which you have to calculate the difference between income and expenses;
- only when switching from UTII to the STS it is allowed to perform the procedure in the middle of the year;
- necessary documents to the Federal Tax Service must be transferred within 5 days after changing the features of the entrepreneur.
The procedure for switching from UTII to the STS is fixed at the legislative level, therefore, if the head of the company or individual entrepreneur violates this procedure, the entrepreneur can be held liable or automatically transferred to the OSS, which can only be left from the beginning of next year.
Simplified tax calculation rules
It is important to understand not only how to switch from UTII to the STS, but also what difficulties you will encounter when calculating the tax under the new regime. The main features include:
- in case of STS, it is important to conduct KUDiR in order to take into account all expenses and income from activities;
- if the entrepreneur has a receivable during the transition, then it does not need to be taken into account when calculating the single tax;
- costs that had to be incurred while using UTII can not reduce the tax base for the simplified regime.
A sample application for the transition to the simplified tax system can be studied below.
Timing and order of transition
For various reasons, many entrepreneurs are forced to switch from imputed income to the simplified tax system. Applications and notifications can be submitted to the transfer from UTII at any time, so you do not need to wait for the start of the new year.
A notice on the withdrawal of an entrepreneur from imputed income must be transmitted within 5 days after changing working conditions. The application for the use of the simplified system must be transmitted within the next 30 days.
Entrepreneurs should be well versed when it is possible to switch from UTII to the STS so as not to violate their tax laws with their rash actions.
Nuances when combining
Some entrepreneurs work in several areas at once. It is even allowed to work LLC on UTII. The transition to the simplified tax system in this case is carried out in the same way as private entrepreneurs.
If the company operates in several types of activities, then it is allowed to combine several modes. The procedure is allowed for both individual entrepreneurs and various organizations. But for this it is necessary to well understand the rules of maintaining separate accounting. Difficulties usually arise when using a simplified system, when 15% of the profit is charged. In this case, it is difficult to determine which expenses relate to imputed tax and which are included in the simplified regime.
Combined reporting rules
For each system, declarations are separately submitted to the Federal Tax Service within the time period established by law.
Under the imputed regime, tax is required to be paid quarterly, and a declaration is submitted once every three months.
Under the simplified regime, advance payments are paid quarterly. The declaration is submitted to the Federal Tax Service only once a year.
Is a reverse transition allowed?
The conditions for the transition from UTII to the STS are considered quite simple, but often entrepreneurs think about the reverse transition. The procedure can be performed taking into account the following rules:
- The transition to imputed tax is permitted only from the beginning of the next calendar year. In doing so, the correct deadlines must be observed. Until January 15 of next year, it is necessary to send a notification to the FTS department about the refusal to use the simplified system during operation. Within the next 5 days it is necessary to transmit a notice on the use of UTII.
- If the company loses the right to use the simplified tax system in the middle of the year, then it will not be able to switch to imputed tax. As soon as the right is lost, the taxpayer must notify the tax office. After that, it is automatically transferred to OSNO. Work on this regime will have until the end of this year.
Before the direct transition, the entrepreneur should be well versed in what the simplified tax system is, so as not to encounter various difficulties already while working. This is due to the fact that the reverse transition is possible only from the beginning of the new year.
What are the difficulties?
STS for individual entrepreneurs without employees is an ideal choice, since it is possible to reduce the tax base by the amount of insurance premiums. If the entrepreneur has hired specialists, then the base can be reduced only by 50% of the paid contributions.
When switching to the simplified tax system with imputed tax, some difficulties may arise. These include:
- accounting is becoming more complicated, and this especially applies to the situation when the system “Income minus expenses” is selected;
- it is important to understand how to report for the month, part of which the entrepreneur works on imputed income, and in the remaining days a simplified system is applied;
- different restrictions apply to individual entrepreneurs and companies using the simplified mode, so before proceeding directly, you should make sure that you can use the simplified tax system for the selected direction of work.
Practice shows that tax officials often conduct unscheduled inspections against entrepreneurs who regularly change tax regimes or combine several systems at the same time. Therefore, it is important to first understand what USN and UTII are, how the transition between these modes is carried out, and also how to keep records of each system correctly.
Pros of Transition
The transition from imputed tax to a simplified system has many advantages for entrepreneurs. These include:
- on USN, as on UTII, it is not necessary to pay personal income tax, VAT or other types of taxes, although there are exceptions when paying property tax, because if an object for which the cadastral value is calculated is used in business, then you will have to pay tax for it annually ;
- “Simplists” are obliged to transfer to the Pension Fund 20% in the form of insurance premiums, and not 30%, which is considered an undoubted advantage, since the financial load is significantly reduced;
- businessmen independently choose the subject of taxation, represented by income or profit, and this choice determines what rate will be used to calculate the exact amount of tax;
- the cash limit has been canceled for entrepreneurs at the STS, and they can also enjoy different privileges with respect to operations, so at the end of the working day any amount of cash can be in cash;
- no accounting required;
- on a simplified system, you need to submit only one declaration per year, but when using imputed tax you have to make 4 declarations per year, since they are submitted to the Federal Tax Service on a quarterly basis;
- allowed to combine the simplified tax system with other taxation systems, which can significantly save money on taxes;
- regional authorities can significantly reduce the rate on the simplified tax system, and often to support small businesses it is equal to 0%.
Although UTII and STS are similar taxation systems, the application of each regime has certain advantages. Often, entrepreneurs do not know what kind of profit they will receive, so it is advisable to work on the simplified tax system. Filing for the transfer from UTII to the STS of notifications must be carried out within the established time frames, otherwise the entrepreneur will be transferred to OSNO by force.
Transition Cons
The rejection of UTII in favor of a simplified system has some disadvantages. These include:
- not all entrepreneurs and firms can use the simplified tax system, since some restrictions are taken into account regarding the size of annual revenue and the number of employees;
- if already in the process of work at least one requirement to use this system is violated, then the entrepreneur will automatically be transferred to OSNO;
- not all company expenses can be taken to reduce the tax base;
- accounting is complicated, because if you choose a system that charges 15% of the profit, you will have to correctly consider all expenses that must be documented and justified;
- if, for various reasons, the right to use the simplified tax system is lost, then it will be possible to switch back to this mode only after a year.
Therefore, before filing a notice and statement, you should make sure that such a transition is appropriate.
Arbitrage practice
Often, the transition procedure is carried out by entrepreneurs with numerous violations of different requirements. Under such conditions, businessmen are forcibly transferred to OSNO. They can challenge such a decision of the tax service in court.
Practice shows that most often judges take the side of tax inspectors. But there are precedents when the decision was made in the direction of the taxpayer. In any case, when switching to a new tax regime, entrepreneurs should take into account the rules for implementing this process. Otherwise, you will have to face unpleasant tax consequences.
Conclusion
UTII and STS are simplified special regimes that allow you to pay only one tax to the budget. They have many differences, so often there is a need to switch from imputed tax to a simplified system. The procedure can be performed at any time.
The transition must be official, therefore it is necessary to notify tax officials about it. To do this, a notification on deregistration as a payer of UTII, as well as an application for the transition to a simplified regime, is timely transmitted.