Unified Social Tax (UST) is a major innovation in the tax system. He was able to replace the previously existing taxes that came in three state extrabudgetary social funds. Prior to the introduction of the UST, payers were required to submit separate reporting forms to each of the funds listed above, as well as to make timely payments within the time frames established by the respective fund.
History of UST
The idea of introducing a single social tax (UST), which would cover all insurance premiums, arose back in 1998, when the State Tax Service proposed to create a single unified tax base, transferring all accounting and control functions to a single department. However, in those years this plan remained incomplete, so it had to be frozen. After 2 years, the second part of the Tax Code of the Russian Federation was adopted, as well as the Federal Law of September 5, 2000. On January 1, 2001, a new procedure for calculating and paying contributions to social extra-budgetary funds of the Russian Federation was introduced. Chapter 24, part 2, announced the introduction of the UST. The tax to the Pension Fund, as well as taxes to the Social Insurance Fund and compulsory health insurance funds, were consolidated as part of the UST in order to mobilize funds for the realization of citizens' rights to pension and social security, as well as proper medical care. In addition to this, a certain procedure was established for contributions to compulsory social insurance against industrial accidents and occupational diseases.
UST: essence and characteristic
The transition to an open market economy in Russia was marked by dramatic changes in the financial system when extra-budgetary funds began to disconnect from the national budget system. Due to the budget deficit, inflation, decline in production, the growth of unforeseen expenses and other circumstances, the formation of extrabudgetary funds has become one of the most important elements in updating the mechanisms of activities of social service institutions. As mentioned earlier, the unified social tax was introduced after the entry into force of the second part of the Tax Code of the Russian Federation. In general, UST is a tax designed to replace all insurance contributions to the aforementioned funds, but without insurance and occupational health insurance premiums, which must be paid regardless of the UST.
In 2010, the UST was canceled, and it was replaced by insurance premiums, which, however, did not differ much from the latter. Significant differences between the UST and insurance premiums became the payment of taxes itself: before, citizens paid through the tax service, and with the advent of insurance premiums, they began to pay taxes to extrabudgetary funds. In addition, tax rates have been slightly changed. However, from January 1, 2014, a proposal was made to return to the old UST scheme, valid until 2010.
Objects of taxation
For taxpayers of the first group, the objects of taxation are all accrued payments, as well as remuneration, bonuses and other income, including payment under civil law contracts, copyright and licensing agreements and, finally, payments intended to provide material assistance. It is worth noting an interesting fact that all of the above income may not be subject to taxation if it was paid from profit, which was on the remaining account of the organization.
For entrepreneurs, the objects of taxation are all income that they receive from their entrepreneurial / professional activity, but minus the costs associated with their extraction.
Finally, we say that the objects of taxation do not include various payments, the subject of which is the transfer of ownership of the property or transfer for temporary use of the property. For example, such contracts may be a sales contract and a rental contract.
Tax base for UST
Based on the objects of taxation established by law, a tax base is also formed. For employers, it is determined by:
- all kinds of remuneration and payments made in accordance with labor legislation;
- payment under civil law contracts;
- income from copyright and license agreements;
- various payments for financial assistance and other gratuitous payments.
When the tax base is determined, all incomes that are somehow accrued by the worker by their employers in cash or in kind, as well as under the guise of social, material and other benefits, minus the non-taxable income, which we will talk about later, are taken into account. When UST is accrued, employer taxpayers are required to determine the tax base for each employee separately throughout the tax period. The tax base of entrepreneurs is a generalized amount of income that is subject to taxation and was received by them for the tax period, with the exception of expenses not related to their extraction. The income received by employees in kind (goods, services) must be considered as part of taxable income, based on their value / value, which is determined by art. 40 of the Tax Code of the Russian Federation, starting from market tariffs and prices.
Payments not included in the tax base
These include the following:
- state benefits;
- compensation upon dismissal;
- travel expenses;
- compensation for harm caused to health;
- compensation for the use of personal belongings of employees;
- all kinds of compensation to athletes;
- other types of compensation;
- provision of free meals;
- income received by members of the peasant farm;
- reimbursement of expenses for raising the professional level of workers;
- contributions for compulsory / voluntary insurance of workers;
- material payments to state employees;
- one-time material payments;
- free housing;
- incomes of members of tribal communities of the small peoples of the North;
- other payments established by Art. 237 of the Tax Code of the Russian Federation.
Payers
Unified social tax payers will be the same persons who pay contributions to extrabudgetary funds. Essentially speaking, now there are only 2 groups of payers, where the first includes hired workers, organizations, entrepreneurs and corporate entities that have civil legal capacity, and the second includes self-employed citizens (lawyers, notaries, tribal communities of the few peoples of the North engaged in traditional farming other).
If taxpayers belong to both categories, then they pay taxes on two grounds. For example, an individual entrepreneur who uses the labor of hired workers is obliged to pay UST on income received from entrepreneurial activity, as well as on accrued payments in favor of his workers. Notaries, detectives and security guards who are engaged in private practice do not belong to a separate class of payers for the reason that they are already included in the group of "individual entrepreneurs", which is fixed in clause 2 of article 11 of the Tax Code.
UST rate in 2013 and 2014
In Russia, a gradual increase in the tax burden is observed, which is caused by the "aging of the nation", and subsequently by the drop in the number of able-bodied and working citizens. Of course, the older generation needs to be treated and regularly paid pensions to these people. Now the smallest insurance premiums are paid by individual entrepreneurs and other self-employed citizens. They pay a fixed insurance premium, which is noticeably lower than that of "average" employees working for someone else. As for the actual interest on insurance contributions (UST), in 2013 they amounted to 30% of the salary. In addition, since 2012, an additional rate of 10% has been withdrawn for salaries in excess of 512 thousand rubles, 568 thousand in 2013 and is expected for salaries in excess of 624 thousand in 2014. UST in 2014 expectedly rose to 34% . Due to the sharp increase in rates in 2010, which grew by 8% (from 26% to 34%), most small enterprises went into the background because they could not bear such a significant load on their business.
How to calculate the single social tax?
The calculation of UST in 2014 is carried out according to the following algorithm:
1. First, you need to determine the tax base, which is the sum of the income of an individual. It can be received by him as a salary (that is, under employment contracts) or under the guise of other payments issued under civil law contracts: royalties, rewards for performing work, and so on. In addition, organizations and individual entrepreneurs who use the labor of hired workers will act as payers of UST.
2. The next step is to determine the tax rate. It has a regressive scale, in which lower percentages are retained from a larger amount. For the bulk of payers, the total percentage will be 30% (for incomes from 1 to 624,000 rubles): UST contributions to the Pension Fund of Russia - 22%, to the Compulsory Medical Insurance Fund - 5.1%, to the Social Insurance Fund - 2.9%. Over the limit amount (624 thousand) will be held 10%.
3. Compare your salary with the desired group (<624000 <) and simply multiply your amount by a certain percentage. That’s all, your individual UST calculation is over.
Tax periods
The tax period is 1 calendar year. Moreover, for the first group of taxpayers there are reporting periods (quarter, 6 and 9 months). For the 2nd group, such periods are absent. At the end of the tax period, taxpayers must file a tax return.
Typical UST accrual transactions
UST. Accruals
Tax benefits
According to the Russian tax legislation, it was established that the following organizations and persons were exempted from tax (until the abolition of the UST in 2010):
- In organizations, the accrual of UST is not withheld from the amounts of payments and other fees that during the tax period do not exceed 100 thousand rubles for each individual who is a disabled person of I, II or III group.
- The previous principle applies to the following categories of taxpayers:
- For public organizations of persons with disabilities (OOI). In this category, taxes are not withheld if at least 80% of the disabled and their legal representatives are among the participants. This applies to their regional offices.
- For institutions where the authorized capital is formed from contributions (OOI), the average number of which [persons with disabilities] is at least 50%. Plus, the share in wages should be at least 25%.
- Organizations that were created to achieve social goals, including assistance to people with disabilities, children with disabilities and their parents. It should be noted that at the same time, only OOIs should be the property owners.
- Individual entrepreneurs and lawyers with disability status I, II or III group. Revenues from their entrepreneurial / professional activities should also not exceed 100 thousand rubles during the tax period.
Nowadays, a preferential percentage of UST (insurance premiums) is also present. For example, in 2013, the preferential rate was 20% in the PFR, the FSS - 0%, the MHIF - 0%.
Preconditions for a return to UST
For many, information about the return did not seem surprising, because the UST is an important component of the tax system of the Russian Federation in the 2000s. Most experts cite the fact that the main reason for the return to the UST was that the replacement of the UST with insurance contributions, the scale of which changed in favor of a more regressive one and an increase in the rates of mandatory contributions from 26% to 34% of the payroll fund, did not provide balancing the pension system, but only led to an increase in the tax burden and various administrative complications. From this we can conclude that a return to the UST is likely to be well received by business (especially small), and the system itself will suit both the state and entrepreneurship. In 2010-13. all entrepreneurs were forced to apply to three (!) bodies, which, in turn, increased the cost of bookkeeping.
It is also not profitable for the country to maintain an increased staff of civil servants, which complicates the control of the financial activities of entrepreneurs. In addition, we have already mentioned that due to the sharp increase in rates, many small companies have fallen into the background. So while only positive changes are forecasted. On the other hand, in 2014 the rate of social payments was increased, because the UST is now 34% (regular) and 26% (preferential), which will not make businessmen very happy.
Conclusion
It has been quite a long time for the UST taxation system to become close and understandable to all taxpayers. Meanwhile, it is worth noting that certain provisions in the Tax Code require additional refinements and clarifications. The abolition of the UST did not affect the tax system too negatively, however, the practice of introducing insurance premiums did not bring any improvements, increasing the tax burden. Today, UST rates are 34% and 26% for the bulk of payers and beneficiaries, respectively, which is not too loyal to entrepreneurs. However, it is worth noting that the UST is a good alternative to insurance premiums, which can improve the tax situation in the country.