FOP - what is it? FOP on a common system

When planning to engage in private business, it is necessary to decide what legal form the organization will have. Choosing a form of commercial activity so that it suits the business as much as possible is one of the most important stages. In order to do this, you need to understand the professional literature and study a lot of information regarding the legal forms of various enterprises.

For example, you can be a private entrepreneur and conduct activities on your own behalf, or you can represent the interests of a legal organization, acting as a co-owner or owner.

Considering the first case, you need to register as a private entrepreneur. According to Ukrainian law - FOP or SPD. However, before making your choice in one of the parties, it is necessary to clarify the pros and cons of the selected form.

FOP is an abbreviation that stands for "physical person - pidprimets", in Russia - FLP (individual entrepreneur).

pros

Registration of FOP is an easier option for documentation and requirements.

The advantages are:

• lack of requirements for authorized capital;
• registration procedure is short;
• made at the place of permanent residence;
• printing, as well as a bank account are not mandatory conditions;
• the accounting system is very simple and does not require a staff accountant;
• tax system is greatly simplified.

Opening conditions

If the purpose of opening such a form is the legalization of income, the acquisition of the opportunity to pay customers with a non-cash form of payment, and cashing in of money if necessary, then POP is the best choice.

In order for this form to be optimal, a number of conditions must be observed:

• work is carried out independently or the number of employees does not exceed 10 people;
• turnover is from 3 to 5 million UAH. for a year (about 11 million rubles) or 5th group of single tax is used;
• with partners, contractors, employees and employees, payments are made by bank transfer;
• availability of VAT for customers;
• the business is new and just starting to gain momentum.

Single tax

For small business entrepreneurs there is a single tax system. The simplified system is a special mechanism that allows you to levy taxes and fees, replacing the payment of certain taxes and certain fees for the payment of tax with accounting and reporting in a simplified form.

A simplified system is not permitted for non-resident individuals. If a person is registered as an entrepreneur, then he must be a resident of the country. In this case, the person has the right to apply a simplified taxation system on a common basis.

Four groups of business entities are distinguished, of which three are individual entrepreneurs. The fourth group applies to legal entities producing agricultural products.

Groups

FOP groups are diverse. For each, both simplifications that make life easier for entrepreneurs and restrictions apply.

The first is the only group that does not require books of cash registers (registrars of settlement transactions). A condition for staying in this group is an income level not exceeding 300 thousand UAH. (about 650,000 rubles). You can engage in retail trade in the market or provide domestic services. Counterparties are solely individuals.

Examples of services:

• services for the restoration, repair, restoration of furniture or its manufacture for an individual order;
• custom made carpentry or carpentry;
• manufacturing custom-made metal products;
• services for the repair of watches, musical instruments;
• services for the repair of personal items, metal products;
• services for the processing of linen, washing, cleaning or dyeing of textile or fur products;
• hairdressing services.

The second group is the most common and in demand. The tax rate for this group is fixed, paid from the minimum salary, and not from the total income. Reporting must be submitted once a year. At the same time, the maximum income level is 1.5 million UAH. per year (approximately 3.2 million rubles).

Those who are registered in this group can carry out activities related to the provision of services to the population and those who pay EH.

Examples:

• Catering business. Allowed the sale of beer and table wine.
• Provision of space for rent.

It is forbidden to:

• Be an intermediary in the sale, evaluation, purchase, rental of real estate.
• Sell, manufacture, repair household and jewelry from precious metals, precious stones, semiprecious stones.
• To provide services for legal entities on a common system.

The maximum allowed income for this group is 1.5 million UAH.

The third group. The tax rate for this group is 5% of income when VAT is included in a single tax, 3% for those who pay VAT. The maximum annual income is 5 million UAH.

Entrepreneurs of this group can engage in any type of activity except that which is prohibited for a single system, as well as sell and produce goods, provide services to the public, and provide services to all taxpayers and entrepreneurs.

Maintaining books RRO is mandatory if, from the beginning of the calendar year, the income exceeded 1 million UAH. (about 2.2 million rubles). If there is no such amount of income, then PPO is not necessary.

Which group is chosen for the POP depends entirely on the type of activity and profit.

Minuses

The disadvantage of FOP is what liability will be charged in case of incidents. The entrepreneur is responsible for the business and for all obligations with absolutely all of his property. Legislatively it is assumed that a small entrepreneur should not incur such losses and obligations that he cannot settle with without using his property. However, in reality it often turns out that in order to open a business, entrepreneurs who are too confident in their success take on obligations that they cannot fulfill later. In this case, legal liability is applied to them, and often in court.

General taxation system

Payments made by FOP on a common system:

• income tax for individuals;
• single social contribution;
• VAT (value added tax).

The general system is applied when, together with a statement that registration of an individual is required as a business entity, an application for the use of a simplified system was not submitted.

The total income from which tax is levied is the revenue that the entrepreneur received as a result of the activity.

Reporting

FOP pays taxes on a simplified system. Among the mandatory reports that are submitted as a result are:

1. Individual income tax return (this is a tax return “on property status and income”). It is served once a year for a period of forty calendar days from the onset of the new year.
2. The FLPs themselves submit a report on ERUs once a year until the first of April of the year that follows the reporting year.
3. If the registered FOP is a VAT payer, it is necessary to file a tax return on VAT every month. Duration - within twenty calendar days after the reporting month. The application form has been approved.
4. The registers of received and issued invoices are submitted to the tax service. It is carried out in electronic form.
5. If PPO is used, then every month no later than the 15th day of the month following the reporting one must submit a report on the use of PPO, as well as the ROK.

ERU calculation

ERUs (single social contribution for compulsory state social insurance) is calculated according to a certain algorithm.

ERUs for FOP:

1. If the monthly income is 0 in total or there were losses that the entrepreneur suffered, then ERUs are 0.
2. If for a month the net income is equal to the interval from 0 to the minimum wage, then ERU is equal to the minimum insurance payment. The calculation is made by multiplying the minimum monthly wage by 34.7%.
3. If the total monthly income is equal from the minimum wage to the maximum accrual base, then ERUs is 34.7% of net income;
4. If net income is more than the maximum size of the accrual base, then ERUs will be 34.7% of the maximum value of the base.

registration

In order to register a business, it is necessary to perform a number of procedures, mandatory activities. To create FOP on a common system, you must:

1. Submit documents to the state registrar.
2. Write a statement in the tax office stating that the necessary taxation system has been chosen.
3. After registration of the single tax payer is completed, it is necessary to submit a special request in which there will be an extract from the register of payers.
4. Take the finished statement.
5. Register revenue and expense books with the tax service.

For registration you need to bring with you:

• copies of identification code and passport;
• a statement that a single taxation form has been chosen;
• Extract from the Unified State Register received in advance;
• book of accounting for income and expenses;
• a statement written in the name of the head of the tax or a statement in the form of 5-OPP.

In order to carry out the registration procedure, it is not necessary to come to the tax authority on your own. You can use the services of official Internet portals and submit all documents in electronic form. Then, after the deadline for paperwork, you need to pick up the originals.

Documentation

Due to the fact that the reporting submitted by the business owner is standard, it is necessary to draw up it according to the requirements. The FOP reporting form is most conveniently downloaded on specialized Internet resources. Before preparing reports, it is important to make sure that the form of the report and the form correspond to the latest changes in the legislation, and are also suitable for a specific form of taxation.