Can an entrepreneur refuse a patent?

How can an individual entrepreneur renounce a patent?

Entrepreneurs may need to terminate a patent early for voluntary or compulsory reasons. You can change the taxation system before it expires in different ways, depending on the situation.

Refusal before patent registration

If you have just submitted an application to purchase a patent, the tax office has 5 days to register and issue documents. During this time, you can withdraw your application, which will be considered lawful.

Early closure of a patent

If the need for early closure of a patent arose after its registration, then you need to notify the tax office. When PSN is terminated ahead of schedule, an application is submitted in Form 26.5-3, approved by Order of the Federal Tax Service No. MMV 7-3/ [email protected]

Termination of activities under a patent

PSN applies to a limited number of activities. If you decide to change your business area and the new activity is not covered by a patent, you must also submit an application to the Federal Tax Service, but in Form 26.5-4 (Order No. MMV 7-3/957).

In case of loss of the right to use a patent

The need to terminate a patent may not only be at one’s own request. An entrepreneur will lose the right to use PSN if the amount of annual income exceeds 60 million rubles or more than 15 employees are hired.

If the right to use a patent is lost, the individual entrepreneur must submit a tax application in form 26.5-3 in order to switch to another taxation system.

We recommend reading: Patent renewal for individual entrepreneurs and deadlines for filing an application.

Pros and cons of PSN

A patent developed for individual entrepreneurs has many advantages compared to similar taxation systems:

• Save time. No need to submit annual reports. That is, all accounting can be reduced to keeping a book of income, and in the free time you can calmly work and develop your business project.
• Less responsibility. The cost of a patent is calculated by the tax office itself, so the possibility of the taxpayer making mistakes is eliminated.
• Saving money. Individual entrepreneurs are exempt from paying personal income tax, VAT, and property taxes to the budget.
• Loyal requirements. An individual entrepreneur can sell goods or services without a cash register.
• Flexible terms. It is possible to obtain a patent for any period, from a month to a year.

Not all private business entities can obtain a patent, which is a significant disadvantage. Only those businessmen whose type of activity is subject to patent taxation will be able to take advantage of the innovation system. These are entrepreneurs whose activities are based on retail trade, catering, cargo transportation and other types of small business.

Recalculation of a patent upon closure of an individual entrepreneur

In case of termination of activities, the individual entrepreneur submits an application for deregistration. When closing an individual entrepreneur on the PNS, you must submit an application for recalculation of the patent in order to find out whether there is a debt or overpayment on it. The patent can be recalculated immediately, on the day the individual entrepreneur is deregistered.

Refund of overpayment

If, after recalculating the patent, an overpayment is revealed, the tax office will return the money to you. To do this, an application for a refund of the amount of overpaid tax is submitted, its form was approved by order of the Federal Tax Service No. ММВ 7-8 / [email protected] app.8.

And also, according to this application, you can not only return the money to your account, but also dispose of it as follows:

• offset against future payments;
• pay off debts on fines or penalties;
• reduce arrears on other mandatory payments.

But the tax office will not take into account the overpayment towards a future period if there is arrears of penalties and fines - its repayment is a priority.

How long does it take to pay the balance of the patent?

If an individual entrepreneur closes a patent and recalculation reveals a debt in the form of an unpaid balance, it must be repaid in full. The money must be transferred before the end of the patent period for which it was originally opened.

Fill out the application

The form consists of 5 pages, such as:

• title page with personal data of the individual entrepreneur and the desired duration of the patent;
• a sheet for information about the planned activity;
• a sheet with information about the place where the individual entrepreneur will work (if the individual entrepreneur will work in a place other than his registration);
• a sheet with information about those vehicles that will be used to transport passengers or goods (for those who have chosen such an activity);
• a sheet with data on those objects that will be used in business, for example, for renting, trading, organizing public catering facilities (for those individual entrepreneurs who have chosen such an activity).

The first two pages will be mandatory for all individual entrepreneurs. And the other three only if the individual entrepreneur has chosen the appropriate areas of business.

Attention! In the sample we filled out all 5 sheets of the form

Sheet 1

1. First, fill out the line with the Taxpayer Identification Number (TIN), the number will need to be indicated on each sheet.
2. We indicate the tax authority code. It consists of 4 digits. You can find your code here.
3. We write your full name. Separate lines are provided for last name, first name and patronymic.
4. We enter the OGRNIP number. He is indicated in the citizen’s state registration certificate as an individual entrepreneur.
5. Then fill in the following information about your place of residence: postal code, district, city, village, street, house, apartment. Everything here is extremely simple.
6. We decide for what period we are filing a patent and write the number in the appropriate field. The period must not exceed 12 months. Next to it we indicate the date from which it is planned to begin activities on the PSN.
7. We enter the number of sheets of the application and attachments to it.

Below you need to fill out the left block. It is intended to confirm the entered data. Here you need to indicate:

• code "1" or "2". “1” - if filled out by the individual entrepreneur himself, “2” - if filled out by a representative of the individual entrepreneur;
• Full name - only for the representative;
• phone number;
• signature, date;
• the name and details of the paper that certifies the authority of the representative (most often this is a power of attorney).

The lower right block will have to be filled out by an employee of the Federal Tax Service.

Sheet 2

Here you need to enter the TIN again and indicate the name of the activity that the individual entrepreneur plans to engage in. Below you need to enter the code for this activity.

Next, we note whether our activities will be carried out with or without the involvement of employees. In the first case we put “1”, in the second “2”. If hired workers are planned, then we note their average number. Otherwise, set “0”. Then we note the tax rate.

If the rate is reduced, you must provide a link to the legislative norm of the constituent entity of the Russian Federation where it is applicable.

Sheet 3

We fill it out if you plan to conduct business outside your place of registration. On this sheet we also indicate the TIN and sheet number.

Next, enter the following information in the appropriate fields:

• code of the subject of the Russian Federation where the individual entrepreneur will work;
• Federal Tax Service code at the place of business of the individual entrepreneur;
• postcode;
• again the code of the subject of the Russian Federation;
• address (everything is simple here).

If you intend to conduct business in several places, you need to fill out a form for each of them. There are three such blocks on the sheet.

Sheet 4

It is filled out if the individual entrepreneur intends to work using vehicles in the field of transporting goods or passengers. All types are listed in paragraphs. 10, 11, 32 and 33 and paragraph 2 of Art. 346.43 Tax Code of the Russian Federation. Such a sheet will need to be filled out for each vehicle.

How long does it take to file a patent waiver application?

The deadline for filing an application for termination of an individual entrepreneur’s patent may be different, depending on the conditions of closure:

We recommend reading: Reporting of individual entrepreneurs on a patent with and without hired employees.

Procedure for filling out the document

The new patent application form consists of five pages. For all activities, the first three pages must be completed. Then, if you provide transport services, you must additionally fill out sheet A. For retail trade and catering or when renting out premises, in addition to the first three mandatory pages, fill out sheet B. When providing services, only the first three pages are filled out.

The document is filled out in the following order:

On the first page, the full name, INN and OGRNIP of the individual entrepreneur, residential address and code of the Federal Tax Service to which the individual applied with the application are indicated. The date from which the individual entrepreneur begins to apply the patent and the period of its validity (from 1 to 12 months) are also indicated. At the bottom of the first sheet the number 1 or 2 is placed, depending on whether the individual entrepreneur fills out the document personally or his authorized representative. Next, a stamp (if available), date and signature are affixed, and a contact telephone number is indicated.

On the second page, the corresponding type of activity and the identification code of the type of business activity established by law of the constituent entity of the Russian Federation are written down.

The identification code consists of six digits:

• the first two digits are selected from the Tax Code of the Russian Federation, Article 346.43, paragraph 2, in accordance with the type of activity;
• the second two digits are the code of the subject of the Russian Federation;
• the next two digits are the serial number of the type of activity defined in the regional Law on the application of PSN.

For example, for the city of Sevastopol when providing hairdressing services, the identification code is 039203. This is how the identification code is determined, according to the instructions. But when personally filling out and sending the application for the application of the patent, the inspector corrected the identification code in the application, saying that the last four digits are the code of the Federal Tax Service, to which the application for the application of the PSN is submitted.

Therefore, we advise our readers to contact their Federal Tax Service when determining the identification code. For some unknown reason, very often local Federal Tax Service Inspectors act contrary to the requirements of the instructions for filling out forms.

Then it is indicated whether the individual entrepreneur plans to work independently or with the involvement of hired workers. In the second case, the average number of employees must be indicated. The following indicates a tax rate of 6% (or less: a number of regions have adopted laws on the application of a reduced PSN rate).

The final paragraph of the second page is a link to the norm of the Law of the subject of the Russian Federation. In this paragraph, you must write the number and date of the local Law that adopted a certain tax rate for the patent.

On the third page, the location of the activity is indicated, the OKTMO code and address are filled in.

The fourth page (Sheet A) is necessary for those individual entrepreneurs who use vehicles in their activities. Depending on the type of vehicle that the individual entrepreneur will use, the numbers 01 are placed in line No. 010; 02; 03; 04:

01 – freight transport; 02 – passenger transport; 03 – water passenger transport; 04 – water freight transport.

There you must also indicate the identification number, make, registration plate, carrying capacity and number of seats of the vehicle.

The fifth page (Sheet B) must be filled out by those individual entrepreneurs who plan to generate income using the premises, for example, engage in trade or rent out the premises. The codes of the type of object and the characteristic of the object are entered in the corresponding columns. The corresponding codes are given in the footnotes at the bottom of this sheet.

Sample application for refusal of a patent

In order for a patent to cease to be valid, you need to submit an application to the tax office, using Form 26.5-3 (in case of early abandonment of the patent or loss of the right) or Form 26.5-4 (upon completion of activities under the patent). The application form can be taken from the tax office in paper form and filled out by hand. We recommend downloading the application on our website, filling it out electronically and printing it out - it will be easier and faster.

applications to terminate the activities of an individual entrepreneur on a patent. applications for loss of the right to use PSN.

All fields in the application are filled in by the entrepreneur or his authorized representative, with the exception of the area “To be filled out by a tax authority employee.”

simplified tax system

Both organizations and individual entrepreneurs can work under the simplified taxation system. But this type of tax is more suitable for small and medium-sized businesses, as it has restrictions. You also need to remember that you can change the simplified tax system to another tax system only after the end of the tax year.

Payment modes of the simplified tax system

To pay taxes under the simplified tax system, you can choose one of two objects of taxation: income - tax is paid on the amount of income, or income minus expenses - tax is paid on the amount of income reduced by the amount of expenses incurred.

Tax must be paid in advance for each reporting period. In general, the tax period under the simplified tax system is 12 months, that is, the state receives the entire tax amount at the end of the calendar year. But to ensure uniform payments, taxes must be paid every quarter, and at the end of the year a declaration on the service’s annual income must be submitted.

Taxes under the simplified tax system must be paid by April 25, then by July 25 and by October 25. Submit a tax return and pay tax at the end of the year - before March 31 for organizations, and until April 30 for individual entrepreneurs.

It will be possible to change the object of taxation only from the next tax year and upon a written application to the Federal Tax Service.

Taxi at the object of simplified taxation system income

• The tax rate of the simplified tax system on the amount of income is 6%
• The rate may be reduced to 1% in certain regions
• The amount of income for calculating tax is taken for the reporting period: if you report for a quarter, then the tax is paid on income for the quarter, if for 9 months, then calculate the tax on income for 9 months

Taxi services under the simplified tax system income minus expenses

• The rate is equal to 15% of the difference between income and expenses for the reporting period
• In some regions the tax rate may be reduced
• Individual entrepreneurs under the simplified tax system “income minus expenses” can pay only 1% tax if the amount of taxes for the year is less than 1% of the income received for the year

An example of a year-end calculation:

• Over the year, the service received an income of 1,000,000 rubles. Expenses for the year amounted to 800,000 rubles.
• Tax base = 1,000,000 ₽ – 800,000 ₽ = 200,000 ₽
• Tax amount = 200,000 ₽ * 15% = 30,000 ₽
• The tax amount is 0.3% of the service’s annual income, which is less than 1%, which means the minimum tax rule of 1% of income applies.
• This means that the tax at the end of the year = 1,000,000 ₽ * 1% = 10,000 ₽

Individual entrepreneur on the simplified tax system for taxi 2021: conditions

Restrictions on the simplified tax system for individual entrepreneurs

• The service must have fewer than 100 employees
• Annual income should not exceed 150 million rubles
• The residual value should not exceed 150 million rubles

What taxes does the simplified tax system replace for individual entrepreneurs?

• personal income tax (NDFL)
• property tax for individuals, except for property tax based on cadastral value
• value added tax (VAT)

Reduced percentage

• In some regions of Russia, individual entrepreneurs have a reduced rate under the simplified tax system (you can check the rate for your region on the Federal Tax Service website)
• Individual entrepreneurs under the simplified tax system “income minus expenses” can pay only 1% tax on income if the amount of taxes for the year is less than 1% of the income received for the year.
• For individual entrepreneurs without employees under the simplified tax system “income”, a tax deduction for fixed insurance premiums is available in full

USN IP taxi: do you need a cash register?

We already wrote above that services should now use online cash registers and either issue printed receipts to customers or show a QR code with a link to the receipt at the end of the trip. But Law 54-FZ provides an exception for individual entrepreneurs who have not hired employees: individual entrepreneurs without employees may not use cash registers until July 1, 2021.

An online cash register for individual taxis on the simplified tax system is needed if:

• your service is registered as a legal entity;
• As an individual entrepreneur, you work with hired employees.

An online cash register for individual taxis on the simplified tax system is NOT needed if:

you, as an individual entrepreneur, did not hire employees - you can work on the simplified tax system without a cash register until 2021.

Taxi organizations on the simplified tax system: conditions

Restrictions on the simplified tax system for organizations

• The service must have fewer than 100 employees
• Annual income should not exceed 150 million rubles
• The residual value should not exceed 150 million rubles
• A service cannot have branches
• The authorized capital of the organization cannot contain more than 25% participation of other legal entities
• To switch to the simplified tax system, the service’s income during the last year should not exceed 112.5 million rubles

What taxes does the simplified tax system replace for organizations?

• corporate income tax, except tax on dividends
• property tax for organizations, except for property tax based on cadastral value
• value added tax (VAT)

Application options and routes

The paper is submitted to the service, which is geographically located at the place of registration of the individual entrepreneur. When an activity claiming PSN is carried out at a different address, the paper can be submitted to absolutely any branch of the Federal Tax Service.

Individual entrepreneurs have access to several options for providing the relevant application paper:

• mail (this is the simplest and most cost-effective option);
• a special version that assumes electronic form;
• personal appeal to specialized authorities.

This can be done through independent efforts or through a representative who will perform all actions for you.

List of documents for registration of a patent

After filling out the application, you must prepare a package of documents for the tax service.

1. The questionnaire (application) may differ in format for different subjects of the Russian Federation, therefore, it is better to check an online example on the regional website of the Federal Tax Service;
2. Policy and passport, it is better to prepare copies along with the originals;
3. For non-residents of the Russian Federation, provide a migration card for the purpose of visiting the Russian Federation;
4. For non-residents, a certificate of absence of infectious diseases and a certificate of proficiency in Russian must be provided;
5. Matte color photo 3x4;

This is a complete list of documents if the individual entrepreneur is applying for a patent for the first time. For residents of the Russian Federation, points 3 and 4 can be skipped.

Package of documents

If you submit an incomplete package of documents, the tax authorities may return and refuse receipt. In some cases, additional certificates or documents are required. Typically, tax authorities will explain why something in addition to the standard package is required. Often, this happens to foreign citizens.

Also, the list of required documents may change in different regions. You can find out the exact list from the Federal Tax Service.