VAT during the transition from the simplified tax system to the OSNO: taxation procedure

How to make the transition from the simplified tax system to the OSNO in 2020-2021

The simplified tax system and the OSNO are such different taxation systems that it is very difficult to compare them.
OSN provides for the maintenance of full accounting with the accrual and payment of all types of taxes. The simplified tax system allows for the payment of a minimum amount of taxes. How to switch from simplified tax system to OSN? A transition from one tax regime (STS) to another (OSN) is possible in the following cases:

• Termination of the use of the simplified tax system on a voluntary basis when submitting a notification to the tax office (clause 6 of article 346.13 of the Tax Code of the Russian Federation). It must be sent to the Federal Tax Service no later than January 15 of the year from the beginning of which the regime change takes place. The notification is submitted in form No. 26-2-3 (approved by order of the Federal Tax Service dated November 2, 2012 No. ММВ-7-3/829).

Important! It is mandatory to submit a notice of voluntary departure from the simplified tax system, according to the Ministry of Finance. Without doing this, you cannot begin to apply the general taxation regime. You can find out how the latest judicial practice on this issue is shaping up from the analytical collection from K+, having received free access to the system.

• Forced termination of the use of the simplified tax system as a result of exceeding the maximum permissible level of annual income or violation of other conditions for the use of the simplified tax system (clause 4 of article 346.13 of the Tax Code of the Russian Federation). A notice of termination of the use of the simplified tax system is submitted within the first 15 days of the quarter following the one in which the conditions for the use of the simplified tax system were violated. The notification is submitted in form No. 26-2-2 (approved by order of the Federal Tax Service dated November 2, 2012 No. ММВ-7-3/829).

Important! If you are late or do not submit this notice at all, you may be fined 200 rubles. (Clause 1 of Article 126 of the Tax Code of the Russian Federation, letter of the Ministry of Finance dated December 6, 2017 No. 03-11-11/81211). For the director of an organization (chief accountant or other official), an administrative fine of 300 rubles is also possible. up to 500 rub. (Part 1 of Article 15.6 of the Code of Administrative Offenses of the Russian Federation).

Loss of the right to a simplified system

First, about why in 2021 an organization may lose the opportunity to work under a simplified taxation system. All restrictions and conditions for payers of the simplified tax system are given in Article 346.12 of the Tax Code of the Russian Federation.

1. First of all, this is exceeding the annual income limit of 150 million rubles. From 2021, this amount remains unchanged because the deflator coefficient has been suspended. The Ministry of Finance plans to introduce transitional limits on income and the number of employees with increased tax rates. If the number of employees is 101-130 people and / or the income is from 150 to 200 million rubles, then rates of 8% and 20% will be applied for the simplified tax system Income and the simplified tax system Income minus expenses, respectively.
2. The second serious limitation for simplifiers is the number of employees, the average number of which should not exceed 100 people.

In addition, the organization loses the right to a simplified taxation system from the moment:

• opening a branch;
• the beginning of activities not permitted for the simplified tax system (banks, pawnshops, insurance, non-state pension funds, gambling, production of excisable goods, microfinance organizations, employment agencies and some others);
• when the share of participation in the LLC of another organization exceeds 25% of the authorized capital;
• the organization becomes a party to the production sharing agreement.

If one of these events occurred during the year in which the LLC was a simplified tax payer, then you must submit a notification to your tax office in form No. 26.2-2. This document was approved by order of the Federal Tax Service of Russia dated November 2, 2012 No. ММВ-7-3/ [email protected] ).

The loss of the right to use the simplified tax system must be reported no later than the 15th day of the month following the quarter in which the conditions were violated. For example, if a limited liability company opened a branch on June 20, 2021, then Form No. 26.2-2 must be submitted no later than July 15, 2021.

In this case, the right to the simplified tax system is considered lost from the beginning of the quarter when the violation occurred. So, for the LLC from our example, which opened a branch on June 20, the transition to OSNO is recognized at the beginning of the second quarter, that is, from April 1, 2021.

In addition, no later than the 25th day of the month following the quarter in which the right to the simplified system was lost, the last declaration under this regime must be submitted. Within the same time frame, it is necessary to pay the tax based on the results of the last reporting period using the simplified tax system.

What does it mean to “go wild”?

“Flying off the simplified system” is what people call the loss of the right to use the simplified tax system. To do this, you need to exceed at least one of the taxpayer’s performance indicators:

• OS cost - 150 million rubles. in 2020-2021;
• average number of employees - 100 people;
• established income limit: in 2021 - 150 million rubles, for 2021 this amount will be indexed;

Important! Starting from 2021, exceeding income and headcount limits does not immediately lead to dismissal from the special regime. As of 01/01/2021, transitional provisions are in effect that allow in such a situation to retain the right to simplification, albeit on slightly less favorable terms. See our article for more details.

• start engaging in activities incompatible with the simplified tax system, for example, producing excisable goods, organizing a pawnshop (clause 3 of article 346.12 of the Tax Code of the Russian Federation);
• acquire a branch (in this case, the presence of a representative office or other separate division does not interfere with the use of the simplified tax system);
• exceed the 25 percent share of participation of legal entities in the management company of a simplified company;
• become a participant in a simple partnership agreement or trust management of property (clause 3 of Article 346.14 of the Tax Code of the Russian Federation).

If you lose the right to use the simplified tax system, you need to calculate and pay the taxes used under the OSNO. This is done according to the rules that are prescribed in the Tax Code of the Russian Federation for newly created organizations or newly registered individual entrepreneurs. You will not have to pay fines and penalties for late payment of monthly payments during the quarter in which you switched to OSNO.

During the transition period from the simplified tax system to the OSN, it will be necessary to determine:

1. The amount of accounts receivable, since under the cash method and under the accrual method, income will differ.
2. Accounts payable for taxes, employee salaries, and to suppliers.
3. Outstanding accounts payable.
4. Residual value of the property.

All these indicators will help in calculating tax bases and taxes themselves.

How to calculate and pay taxes, as well as submit reports in case of loss of the right to the simplified tax system, is explained in detail in the Ready-made solution from ConsultantPlus. If you do not yet have access to the system, get it absolutely free and go to the material.

What to do if the tax office has reported non-compliance with the conditions of the simplified tax system, read here.

Transition from simplified to imputation (until 01/01/2021)

Important! Starting from 2021, the UTII regime has been abolished.

The transition from the simplified tax system can be not only to the special tax system, but also to other tax regimes, for example, UTII, if this corresponds to the type of activity being carried out (clause 2 of article 346.26 of the Tax Code of the Russian Federation). However, such a transition can only be made from the beginning of the next year, since voluntary refusal of the simplified tax system during the tax period is not allowed (clause 3 of article 346.13 of the Tax Code of the Russian Federation). At the same time, you will have to notify the Federal Tax Service of your intention to apply UTII within the first 5 working days of the year (clause 3 of Article 346.28 of the Tax Code of the Russian Federation).

The list of activities to which UTII can be applied is established by local city or district authorities. She also makes a decision regarding the size of the single tax rate, which depends not on the results of economic activity, but on its types.

Organizations that have switched to imputation, just as under the simplified tax system, are required to submit financial statements to the tax office. The set of mandatory taxes for companies and individual entrepreneurs remains the same as under the simplified tax system (payments to extra-budgetary funds, personal income tax), but the simplified tax system tax is replaced by the UTII tax.

Just as with the simplified tax system, income tax, property tax (in the absence of property valued at cadastral value), VAT are not payable on UTII, but if there is a base, land, transport and water taxes are paid.

The tax base for UTII is deciphered in Art. 346.29 Tax Code of the Russian Federation. Adjustment factors are applied to it. The monthly tax amount is determined by multiplying the tax base by 15%. The single tax is reduced by the amount of insurance premiums paid - by 100% (individual entrepreneurs working alone) or 50% (firms and individual entrepreneurs hiring workers).

Features of the transition from a simplified taxation system to a general one: we recognize income and expenses

Revenue unpaid under the simplified tax system must be included in income in the 1st month of application of the simplified tax system (subclause 1, clause 2, article 346.25 of the Tax Code of the Russian Federation, letter of the Federal Tax Service of the Russian Federation dated 01/09/2018 No. SD-4-3/6).

All advances that the “simplified” person received before the transition from the simplified tax system to the OSNO are included in the taxable base for a single tax. This is done even if the goods are shipped in advance after the transition from the simplified tax system to the general taxation system (subclause 1, clause 1, article 251 of the Tax Code of the Russian Federation). The costs of such shipment will reduce the income tax base (letter of the Ministry of Finance dated January 28, 2009 No. 03-11-06/2/8).

Expenses during the transition from the simplified tax system to OSNO (in the first month of application of the new regime) include unpaid debt for services rendered (subclause 2 of clause 2 of article 346.25 of the Tax Code of the Russian Federation), unpaid wages and unpaid insurance premiums (letters from the Ministry of Finance of the Russian Federation dated 05/03/2017 No. 03-11-06/2/26921, dated December 22, 2014 No. 03-11-06/2/66188).

The Tax Code of the Russian Federation does not link the possibility of classifying unpaid goods, works, and services as expenses under the simplified tax system with the use of one or another object of taxation under the simplified tax system (“income” or “income minus expenses”). That is, expenses that were incurred when applying the simplified tax system, including with the object “income,” but were paid after the transition to OSNO, are taken into account when calculating income tax. The procedure for accounting for expenses on goods causes controversy. In order to take into account the costs of them for the simplified tax system, the goods must not only be paid for, but also sold. Therefore, goods that were purchased and paid for under the simplified tax system, and sold after the transition to OSNO, are allowed by senior judges to be taken into account during the period of their sale, that is, when calculating income tax (letter of the Federal Tax Service of the Russian Federation dated 01/09/2018 No. SD-4-3/6 , ruling of the Supreme Court of the Russian Federation dated March 6, 2015 No. 306-KG15-289). Previously, the Ministry of Finance expressed a different position - expenses should be taken into account on the date of transition (letter dated July 31, 2014 No. 03-11-06/2/37697). Now the position of the department coincides with the opinion of the Supreme Court (letters of the Ministry of Finance of the Russian Federation dated November 14, 2016 No. 03-03-06/1/66457, dated January 22, 2016 No. 03-03-06/1/2227). This is especially beneficial for those who used the simplified tax system with the object “income”, because before switching to OSNO they cannot use expenses to reduce tax.

If a taxpayer has accounts receivable using the simplified tax system, the return of which is impossible, then losses from their write-off are not taken into account. It cannot reduce the tax base for the simplified tax system (Article 346.16 of the Tax Code of the Russian Federation) and attribute it to expenses for the special tax system (subclause 2 of clause 2 of Article 346.25 of the Tax Code of the Russian Federation) will also not work (letter from the Ministry of Finance dated February 20, 2016 No. 03-11-06 /2/9909, dated June 23, 2014 No. 03-03-06/1/29799).

Read about the procedure for accounting for expenses during a voluntary transition from the simplified tax system to the OSN in the material “From the simplified tax system to the OSN: adding up last year’s expenses.”

Is it possible to transfer a loss received under the simplified tax system if the object of taxation under the simplified tax system changes?

If an organization or individual entrepreneur received a loss during the period of application of the simplified tax system “income minus expenses”, and in the next tax period changed the object of taxation to “income”, it will not be possible to carry forward the loss to the future. It will not be possible to carry forward a loss to the future if an organization or individual entrepreneur received a loss during the period of application of the simplified tax system “income”, and in the next tax period changed the object of taxation to “income minus expenses”. This is explained by the fact that, according to paragraph 7 of Art. 346.18 of the Tax Code of the Russian Federation, it is possible to reduce the tax base for a single tax only if the taxpayer uses “income minus expenses” as an object of taxation and the loss was received during the period of application of the object of taxation “income minus expenses”.

To learn how to change the object of taxation “income” to “income minus expenses,” read the material “Procedure for switching from the simplified tax system of 6% to the simplified tax system of 15% .

Determination of the residual value of fixed assets and intangible assets during the transition from the simplified tax system to the OSNO

If the simplifier makes the transition to OSNO voluntarily from the beginning of next year, then problems with fixed assets do not arise. Property purchased under the simplified tax system is written off in equal shares during the tax period - a year.

If the transition from the simplified tax system occurs before the end of the year, the balance of the cost of the acquired fixed asset will be recorded. With the object “income minus expenses”, this balance of the property value not written off as “simplified” expenses must be transferred to tax accounting on OSNO as the residual value of fixed assets (letter of the Ministry of Finance of the Russian Federation dated March 15, 2011 No. 03-11-06/2/34). When switching to OSNO from the simplified version with the object “income”, you also have the right to determine the residual value of the OS (clause 3 of Article 346.25 of the Tax Code of the Russian Federation, clause 15 of the Review approved by the Presidium of the Supreme Court of the Russian Federation on July 4, 2018, letter of the Ministry of Finance dated June 14, 2019 No. 03 -04-05/43643, Federal Tax Service dated July 30, 2018 No. KCH-4-7/14643). To do this, from the original cost of the object, you need to subtract the expenses that could have been incurred if you had used the object “income minus expenses”.

Examples of calculating the residual value of fixed assets for each of these cases can be viewed by obtaining free access to ConsultantPlus.

The Tax Code of the Russian Federation has a rule on calculating the residual value of fixed assets and intangible assets when switching from the simplified tax system to the OSNO. It concerns objects that were acquired before the application of the simplified tax system during the period of work at OSNO. That is, they bought property on OSNO, then switched to the simplified tax system, and then returned to OSNO. On the date of return to income tax, the tax residual value of fixed assets and intangible assets is calculated as the difference between the residual value of these objects upon transition to the simplified tax system and the expenses written off during the period of application of the simplified tax system (clause 3 of Article 346.25 of the Tax Code of the Russian Federation).

For more information about fixed assets, see this article.

Voluntary transition to a common tax system

If the transition to OSNO occurs on a voluntary basis, then this can only be done from the beginning of the new year by reporting a refusal from the simplified tax system in form No. 26.2-3. The deadline for submitting this notification is no later than January 15 of the year in which the organization begins to operate on a general basis.

For example, in order to become an OSNO payer from 2021, the notification must be submitted no later than 01/15/20. If you are late to submit Form No. 26.2-3, you will have to work on the simplified system until the end of the year.

Filling out the notification is very simple. The document indicates only the organization codes (TIN and KPP), the tax office code, the full name of the LLC and the year from which the taxpayer refuses the simplification.

In this case, the declaration under the simplified tax system is submitted in the usual manner - before March 31 of the year following the reporting year. Within the same period, the annual tax must be paid minus advance payments.

The tax office does not issue any special confirmation of the transition to a common system. The organization ends up on OSNO by default, due to the termination of activities as part of the simplification.

VAT upon transition from simplified tax system to OSNO

When the application of the simplified tax system is terminated (regardless of the reason for this termination), the company or individual entrepreneur becomes a VAT payer and acquires the obligation to accrue it. During the transition period, you need to take into account when the money arrived. If an advance payment for a product was received before the transition to OSNO, and its purchase occurred later, then VAT must be charged only on sales. If an advance is received after the transition from the simplified tax system to OSNO, VAT is calculated from the amount of the advance and accrued for sale. Moreover, after shipment, VAT on the advance payment can be included in deductions.

Read more about the rules for VAT refund on a simplified basis in this article .

See also the article “What to do with “input” VAT on fixed assets when transitioning from the simplified tax system to the general taxation regime?”.

When switching from the simplified tax system, VAT must be charged from the beginning of the quarter in which the transition to OSNO took place, even if this happened in the last month of the quarter. The company must calculate and pay tax to the budget for the entire quarter.

Invoices during the transition from the simplified tax system to the OSNO

It is necessary to pay attention to the fact that re-issuance of invoices with the inclusion of VAT is possible only for those shipments whose issuance period (5 days) expires in the month when the transition to OSNO became necessary. This is regulated by the fact that invoices from the date of shipment are issued exactly within this period (clause 3 of Article 168 of the Tax Code of the Russian Federation). Similar explanations are given by the letter of the Federal Tax Service dated 02/08/2007 No. MM-6-03/ [email protected] If the seller loses the right to the simplified tax system, then he will have to pay VAT at his own expense. It will not be possible to take this amount into account in expenses for income tax (Article 170, paragraph 19 of Article 270 of the Tax Code of the Russian Federation).

Some arbitration courts come to the conclusion that it is correct to re-issue invoices with the allocation of VAT from the beginning of the entire tax period for VAT, which includes the loss of the right to the simplified tax system (Resolution of the Federal Antimonopoly Service of the Volga District dated May 30, 2007 No. A12-14123/06-C29 was supported by the YOU RF in definition dated 06.08.2007 No. 9478/07).

Results

You can switch from the simplified tax system to the general taxation system on a voluntary basis from the beginning of the new year or if you lose the right to a simplified tax system. As a result of this, the volume of both accounting and tax accounting will increase, as well as the number of taxes paid.

Sources:

• Tax Code of the Russian Federation
• Review of judicial practice of the Supreme Court of the Russian Federation No. 2 (2018)

You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Conclusions (+ video)

The simplified taxation system has many advantages. Despite this, many businessmen prefer the standard method of calculating taxes. It is important to note that, unlike voluntary regime change, forced transfer can be carried out at any time during the reporting period. At the time of changing the tax payment system, it is very important to comply with all the requirements of regulatory authorities regarding tax and accounting reports. The use of the classical form of taxation provides an opportunity for an entrepreneur to use additional methods of business development that are not available to other tax payers.