As established by Article 11 of the Tax Code of the Russian Federation, an individual entrepreneur is an individual registered in accordance with the procedure established by law and extracting income from his activities. This category includes lawyers and notaries conducting private practice.
The Tax Code states that an entity engaged in entrepreneurial activity without establishing a legal entity that is not registered as an individual entrepreneur, in fulfilling the duties assigned to it by tax legislation, is not entitled to refer to the individual as an individual entrepreneur.
Articles 227, 228 of the Tax Code of the Russian Federation establish special rules for calculating tax for certain categories of individuals and for certain types of income. In the first of these norms, in addition, the terms and procedure for the deduction of amounts, including advance payments, are determined. Consider the main provisions of Art. 227 of the Tax Code of the Russian Federation. Features of tax calculation and advance payments will also be described later.
Liable entities
Article 227 of the Tax Code of the Russian Federation (as amended ) assigns the obligation to calculate and pay taxes on income to:
- Individuals conducting entrepreneurial activities without creating a legal entity, registered in the prescribed manner.
- Notaries and other private citizens.
These entities deduct mandatory payments from income derived from their activities.
Object of taxation
The above payers, guided by the provisions of Article 225 of the Tax Code, calculate the tax amounts themselves. The object of taxation is the profit received both in cash and in kind, or the right to dispose of such income.
It is necessary to take into account that, if deductions are made from the amounts received by the payer by his order, by the decision of judicial or other bodies, they do not reduce the taxable base. A similar rule applies to losses incurred by the entity in previous years.
Profit Date
In order to implement the provisions of Article 227 of the Tax Code of the Russian Federation , the date of the actual receipt of income is the date:
- Payments of income to the payer, including by transferring amounts to his bank accounts or accounts of other persons by his order. This day is taken into account when making a profit in cash.
- Income transfer in kind.
Payers specified in article 227 of the Tax Code of the Russian Federation must submit a declaration to the IFTS at the place of registration. The deadline is no later than April 30 of the period following the reporting year ended.
If, during the current period, entities have a profit from their activities, they must provide a declaration indicating the amount of expected income in the current year. This must be done within five days after the end of the month from the date of receipt of these incomes. The corresponding requirement is enshrined in paragraph 7,227 of the article of the Tax Code . The estimated profit is determined by the payer.
Down payments
They are referred to in paragraph 8 of article 227 of the Tax Code of the Russian Federation . The provisions of the norm establish that the responsibility for calculating advance amounts on the basis of the declaration and documents attached to it rests with the supervisory authority. IFTS, in addition, calculates advance payments for the current period, based on the amount of estimated income given by the payer in the declaration. When calculating, the amount of income actually received for the previous period may be used, taking into account the deductions provided for in Articles 221 and 218.
Advance Dates
Clause 3 58 of the Tax Code provides that, during the reporting period, the payer may deduct advance tax payments. The obligation to pay them is recognized as fulfilled according to the rules similar to the payment of tax amounts.
The timing of deductions of advances is fixed in paragraph 9 of Art. 227. Amounts are deducted in accordance with the notifications:
- for January-June - until 15.07 of the current period;
- for July-September - until 15.10;
- for October-December - until January 15 of the next year.
The value of each deduction is 1/4 of the total annual amount of advance payments.
Important point
In the Tax Code, the concepts of tax and advance are differentiated; There are different terms for their deduction. Tentative amounts are treated as interim payments. They are deducted throughout the entire period. Accordingly, in accordance with the provisions of Article 11 of the Tax Code, an unscheduled advance cannot be recognized as a tax arrears.
Moreover, the legislation does not have norms that allow supervisory authorities to collect advances from payers by force.
Interim Measures
In the framework of judicial practice under Article 227 of the Tax Code of the Russian Federation , the courts, when considering disputes on the enforcement of uncollected amounts, are guided by the provisions of Article 45-47. As established by these rules, in case of failure to fulfill or improper fulfillment of the obligation to deduct taxes, pay fines and penalties, the Federal Tax Service indicates to the debtor the requirement to pay off the debt. If it is not executed, the supervisory authority has the right to decide on the recovery from the payer's funds located on its payroll account and at the expense of its property.
Reasons for allocation
If in the reporting period the payer’s income has changed (decreased or increased) by more than 50%, the entity must submit a new declaration. In it, he indicates the estimated income from activities for the current year.
The tax authority, in turn, is required to receive a new declaration within 5 days. recalculate advance amounts for the current period on non-matched deduction periods. The corresponding provision is enshrined in paragraph 10 of article 227 of the Code.
Additionally
Persons registered in the status of individual entrepreneurs, entities that profit from private practice (lawyers, notaries) are required to declare income.
Entrepreneurs need to deduct personal income tax from the amount of income reduced by tax deductions and expenses incurred.
An exception to this rule is provided for IPs using USN, paying UTII, and also applying the patent tax regime.
Personal income tax on the patent system
The features of calculation and payment of tax on the patent system are described in article 227.1 of the Tax Code .
The norm established that tax is deducted in the form of fixed advance amounts. Their value is 1200 rubles / month. throughout the duration of the patent. In this case, the size of contributions is indexed by:
- Deflator coefficient. It is set for the corresponding year.
- Coefficient taking into account regional specifics of the labor market. It is established by the law of the subject for the corresponding year. If it is not defined, then by default it is considered equal to one.
A fixed advance amount is deducted at the place of business in accordance with the issued patent before the start of the period for which the permit is granted (extended, renewed).
The tax amount is reduced throughout the year by only one agent at the discretion of the payer. In this case, the tax agent must receive a notification from the IFTS at the location (residence) confirming the right to reduce the payment amount by the amount of the fixed advances paid.
A change in the amount of obligatory payment is made on the basis of a statement by the payer drawn up in writing. Documents confirming the payment of advances must be attached to it.
Expert Advice
Taxpayers should pay attention to the following points:
- All income received by the entrepreneur must be given in the declaration without VAT, if the subject is its payer.
- To calculate the tax in the report for the IFTS, it is necessary to reflect the expenses incurred during the period. Revenues received during the year can only be reduced by documented costs. Only the amounts paid may be included in expenses. In this regard, a supporting document is attached to the invoice or invoice. It can be a cashier's check, order, receipt to the receipt, etc. However, if you attach all the supporting papers, a rather large folder (and even more than one) can be formed. Therefore, many IFTS do not require all documents. It is enough to draw up a register of such securities.
- If the entity is recognized as a VAT payer, all expenses are indicated without an “input” deduction. These amounts are deductible for tax purposes. In order to comply with the provisions of Article 227 of the Tax Code of the Russian Federation, upon exemption from CSN, the "input" tax is included in the cost of purchased services, products, works.
If an individual entrepreneur has not received any income other than profits derived from his activities, he is entitled to rely on property social and standard deductions. For this, it is necessary to comply with the conditions established by the provisions of the Tax Code of the Russian Federation.