Value added tax is considered one of the most common in the Russian Federation. Which is not surprising: it is paid from the many incomes of ordinary citizens - individuals. In the article we will consider the main elements of personal income tax, present their characteristics. Let's see which articles of the Tax Code govern them.
About tax
We begin to consider the nature of personal income tax, the purpose, the main elements of this tax.
As the name implies, this tax payment is levied on the entire spectrum of individuals' profits. Personal income tax itself is direct in nature. In the Russian Federation, this is a federal tax. That is, it enters the state, not regional, not local treasury.
The main legal normative act regulating it, from 01.01.2009 is the second part of the Tax Code. This is sec. 8 "Federal taxes", ch. 23 "PIT".
The taxpayers here are individuals. First of all, tax residents of the Russian Federation. Also, personal income tax is paid by persons who are not tax residents of the state, but who receive income in Russia. A list of citizens who are completely exempt from paying income tax has also been introduced. It is presented in Art. 217 Tax Code.
The tax base for personal income tax is the following:
- The income of the payer transferred to him in cash.
- Profit received by the payer in kind.
- Incomes represented by material benefits.
- Profit in the form of the appeared right to dispose of any property.
What is meant?
What is meant by elements of personal income tax? These are the following components:
- Taxpayer.
- Objects of taxation.
- Tax periods.
- Tax bases.
- Tax rates.
- Tax deductions.
- The calculation of personal income tax.
- Tax payment.
- Reporting.
Each of the above elements of personal income tax will be discussed further in order in detail.
Taxpayers
This element is regulated by Art. 207 Russian Tax Code. Here is what is presented there regarding taxpayers of personal income tax:
- All individuals acting as tax residents of the Russian Federation.
- Individuals who are not considered Russian tax residents, but have income sources in the Russian Federation.
To deal with this element of personal income tax, you need to submit a definition of a tax resident. This is an individual who is actually located on Russian territory for at least 183 days a year (that is, for 12 consecutive months). Such a period shall not be interrupted if an individual leaves the Russian Federation for training or treatment for a period of less than 6 months.
It is important to note that, regardless of the time spent directly on the territory of the Russian Federation, the following citizens will be recognized as tax residents:
- Domestic military personnel.
- Employees of Russian state authorities and local governments, forced to work outside the Russian Federation on duty.
Object of taxation
Another element of taxation of personal income tax. This refers to the income that individual taxpayers receive. It can be expressed in the following varieties:
- From revenue sources located both in the Russian Federation and outside the Russian state. In relation to those individuals who legally acts as a tax resident of the Russian Federation.
- From revenue sources located specifically in the Russian Federation. In relation to persons who are not legally tax residents of our country.
All of the above is regulated by three articles of the Tax Code - 208, 209, 217.
The tax base
What is this element of personal income tax? The tax base here is considered to be all the income of the taxpayer, which was accepted by him both in cash and in kind, in the form of material benefits.
It is important to note that the tax base is determined by a specific revenue source. Indeed, each of the latter has its own tax rates.
For those incomes for which the rate of 13% applies, the tax base is the monetary expression of these incomes, which is reduced by the amount of the tax deduction.
For income for which other tax rates apply, the tax base is the monetary representation of income without already reducing the amount of the tax deduction.
The following cases stand out separately:
- Profit in kind.
- Revenues expressed in terms of material gain.
- The tax base calculated under pension insurance contracts.
- NB in relation to the categories of income from equity participation in the affairs of companies and enterprises.
- The tax base for various transactions with securities and various financial instruments in the field of derivatives transactions.
All of the above is regulated by Art. 210-214 of the domestic Tax Code.
Taxable period
The tax period is also an element of personal income tax. In this case, it is the calendar year. The item is governed by Art. 216 of the Tax Code.
Tax deductions
Another main element of personal income tax. There are several categories of deductions:
- Standard.
- Property
- Social.
- Professional.
Regulating their provisions - Art. 218-231 of the Russian Tax Code.
All of the above deductions in the Russian Federation will be relevant only in respect of income subject to this tax at a rate of 13%. Get to know them in detail.
Standard deductions
As for standard deductions, they are provided to the payer by one of the tax agents, which is the source of income payments. The latter is elected by the taxpayer himself - he draws up the corresponding application. It is supported by documentation that confirms the right to a deduction.
The amount of standard tax deductions may vary from 400 to 3000 rubles. The size of the amount depends on the grounds for the provision.
Social deductions
A Russian citizen has the right to social tax deductions if in the current reporting period he incurred expenses related to the following:
- The provision of charitable assistance in monetary terms.
- Cash donations paid / sent by the payer to religious organizations (only for purposes within the framework of their statutory activities).
- Payment for training in educational centers, institutions.
- Payment of medical treatment, purchase of medicines according to doctor’s prescriptions.
Property Deductions
A citizen has the right to apply for a property deduction in the following cases:
- Sale of property belonging to him by right of ownership.
- The cost of building your own housing. Or to buy a finished house, apartment for living in the territory of the Russian Federation.
In this case, a deduction is provided upon sale (during the reporting tax period) of any type of taxpayer property - both movable and immovable. Its (deduction) size will depend on the following:
- The temporary period during which the citizen was the owner of the property alienated by him.
- A variety of property being sold.
According to the legislation, the following variations are allowed:
- Ownership of any type of property for 3 years or more. The deduction will be presented in an amount equal to that which was received by the taxpayer during the sale.
- Ownership of property less than 3 years. There are limits to this. You cannot claim a deduction if its amount exceeds 1 million rubles in respect of property and 125 thousand rubles in relation to any other property.
A similar deduction cannot be received by an individual entrepreneur in the event of the sale of property in one way or another related to entrepreneurial activity.
Professional Deductions
The following categories of citizens are entitled to receive special professional deductions:
- Individuals doing business without registering a legal entity.
- Taxpayers performing work / providing services on the basis of civil law contracts.
- Taxpayers who receive royalties for the creation / execution / other use of works of art and literature, for scientific achievements, discoveries, inventions or the presentation of industrial designs.
- Private notaries.
- Lawyers who are the founders of law offices.
- Other persons engaged in private practice in the manner approved by the legislation of the Russian Federation.
Accordingly, the deduction is provided to them only in the amount of embezzlement actually carried out, confirmed by the documentation, directly related to professional activity.
Tax rates
We will deal with the characteristic of the personal income tax element. In most cases, a rate of 13% applies.
But a rate of 35% has also been introduced. It is relevant in the following exceptional cases:
- The sum of the various prizes and winnings. In the case when its value exceeds 2000 rubles.
- Insurance payments under voluntary insurance contracts (in case of exceeding the established limits).
- Interest income on bank deposits - only in case of exceeding the limits established by law. They are determined at the current refinancing rate for the entire time that interest on ruble deposits is accrued. The value of such a rate is floating. As for foreign currency deposits, increased taxation is applicable if the interest on them exceeds 9%.
- Interest savings as a result of obtaining borrowed funds and when exceeding the limits established for them.
The rate of 30% is valid for non-residents of the Russian Federation who receive income in Russia.
A tax rate of 9% is relevant for profit from equity participation (dividends). Also, 9% tax is charged on interest on bonds with a mortgage cover and issued before 01/01/2007, profits of the founders of trust management with a mortgage cover received on the basis of the acquisition of a mortgage participation certificate issued before 01/01/2007.
All of the above is also regulated by the Tax Code. In this case, you need to pay attention to Art. 224.
Tax calculation
Also one of the main elements of personal income tax. The amount of the payment in this context is considered to be the proportion of the tax base corresponding to the established rate. The total personal income tax will be calculated based on the results of the tax period in relation to all taxpayer income (meaning the profit that was received by him during the tax reporting period).
As for this basic element of taxation of personal income tax, it is regulated by Art. 225-228 of the Tax Code of the Russian Federation. The following features are highlighted in tax legislation:
- Personal Income Calculations by various tax agents.
- Income tax calculations by individual groups of individuals.
- Personal income tax calculations in relation to specific types of income.
Payment of personal income tax and reporting
We continue the description of the main elements of personal income tax. The last two remained that are interconnected - payment and reporting.
Tax agents must send the personal income tax amount no later than the day of receipt of cash from the bank for the payment of income or the day the income is sent to the taxpayer's bank accounts.
Certain groups of individuals pay income tax at the place of registration of the payer. This must be done no later than July 15, which immediately follows the reporting one. The law states that advance payments by such groups of taxpayers will be paid on the basis of notifications from the Federal Tax Service:
- January to June. Not later than July 15 of this year. With respect to 1/2 of the total advance payment amount.
- July to September. Not later than October 15 of this year. In relation to 1/4 of the total amount of advance payments.
- From October to December. Not later than January 15 of the year following the reporting year. With respect to 1/4 of last year's advance payment amount.
If the taxpayer receives income for which the tax agent does not withhold the amount of tax, then he pays personal income tax in two installments, in equal shares:
- First deduction. Not later than 30 calendar days from the date of delivery by the Federal Tax Service of the notice of the need to pay tax.
- The second deduction. Not later than 30 calendar days from the first moment of payment of personal income tax in the reporting year.
Not later than April 30 of the year that follows the reporting one, the following taxpayers submit a tax return:
- Separate categories of individual payers.
- Individual in relation to specific income categories.
All this is standardized by Art. 228 Russian tax legislation.
Invalid personal income tax item value
One can meet such a definition. Although it is consonant with the categories we have analyzed, it has nothing to do with them. The error "Invalid value of an element in 2-NDFL" may occur when generating tax electronic reporting in accounting programs. For example, in the application “Taxpayer YL” it is easy to fix it by checking the props for the presence of extra spaces, re-filling the form lines.
Finally
We have analyzed the main elements of personal income tax that characterize the essence of this tax. Its payers, as can be seen from the abbreviation, are individuals, the object of taxation is their income. Each of the indicated tax elements is regulated by individual provisions of the Tax Code.