Expense accounting
A problem may arise when carrying out activities with a selected taxation regime, in which costs are taken into account. If the assigned codes do not have the required value, then it will not be possible to write off the expenses.
To understand, let's consider a common situation. For example, when organizing a company, a code was specified that allowed retail trade. Subsequently, it was decided to engage in services. There is no code for the provision of services in the Unified State Register of Legal Entities. When providing data on costs for this area of activity, the tax service may refuse calculations. There is no data on such activities in the state register, and expenses cannot be taken into account.
How to choose the right OKVED for your activity
Having examined the question of why OKVED is needed, we should consider the rules for choosing this cipher. This step is performed at the stage of filing an application for tax registration as a business entity. Each entrepreneur has the legal right to specify several ciphers. During the registration procedure, the future businessman must choose both the main and additional areas of his activity.
In order to better understand this procedure, we should consider a practical example. Let's imagine a company that sells food products. This direction is considered as an economic activity. Such a company can also sell clothing and non-food products. These activities will be considered additional activities.
During the registration procedure, an entrepreneur can specify several codes, while the work of the enterprise will proceed only in the main direction. This step is taken by businessmen who plan to further expand their business to new markets. It should also be noted that each entrepreneur is given the right to delete unused codes and add new codes.
Once selected codes can be changed, deleted or supplemented
What is the difference between OKVED and OKVED 2? This question worries many entrepreneurs. The prefix “2” denotes a new edition of the document in question . According to the established rules, companies registering after two thousand and sixteen must use the new edition of the document to select the desired code. Having decided on the direction of his business, an entrepreneur should take a special reference book, which contains information about various types of economic activities. Codes from this directory are indicated in registration documents.
There are often situations when OKVED does not contain codes corresponding to the chosen direction. In such a situation, you should get specialist advice regarding the choice of activity and specific group. The entrepreneur also has every right to indicate the code corresponding to the “Other services” section.
Extra reporting
Many areas of activity require additional reporting. The necessary information is taken from the Unified State Register of Legal Entities, where OKVED codes are indicated. If, through inattention or error, you entered a code that involves space exploration, do not be surprised if you receive a notification about providing statistical data on this activity.
This applies not only to specific, but also to simple codes. For example, your organization has been assigned codes for retail trade and services. But in reality, you are only engaged in providing services. Rosstat will require reporting on retail trade. Your words that you do not carry out such activities will not have any meaning. The code is indicated, which means you must provide information to Rosstat. Do not forget that there are fines for failure to submit reports, and in some cases they can be significant. Simply ignoring reporting can result in unexpected expenses. In addition, if you want to fill out the documentation yourself, without the necessary experience and knowledge, you will have to spend a lot of time.
Additionally, with problems with Rosstat, troubles with tax services may arise. For example, when registering an LLC or individual entrepreneurship, you indicated UTII as taxation, but additionally indicated the codes for which OSNO reporting is required, then the tax service will require the submission of the necessary reports.
When checking, it will be taken into account that the organization or individual entrepreneur carries out activities not only in those areas that provide for UTII. If codes have been indicated that require additional reporting, then in order to avoid misunderstandings and troubles, provide zero reporting. If the necessary data is not available, the tax authorities may issue a fine and legal proceedings will be required. To prove you're right.
How many codes to choose
OKVED codes should be selected for those types of activities that the individual entrepreneur plans to carry out in the near future. If you select several suitable codes, then during state registration of an individual entrepreneur one of them should be indicated as the main one, and the rest as additional ones (we will talk about why this is necessary below). Tax authorities do not limit the maximum number of codes for one individual entrepreneur, but you should not indicate too many codes. It is best to choose no more than 20. After registering as an individual entrepreneur, you can add or remove extra ones.
Register as an individual entrepreneur and keep accounts for a year and submit all reports for free
Refusal of registration
In existing legislation there are certain restrictions on the implementation of certain types of activities. If you inadvertently indicate the wrong value, the relevant authorities will simply refuse registration.
It must be remembered that a new version of codes has been introduced since 2021. When specifying old options, non-acceptance of documents is most likely. Remember that the required code must consist of at least four characters and correspond to the group of activities. A small inaccuracy or error may result in refusal of registration. Correction will require spending additional time and possibly money.
What is OKVED: deciphering the abbreviation
OKVED is an all-Russian classifier of types of economic activity, part of the national standardization system of the Russian Federation and developed by the Ministry of Economic Development.
This classifier is used in the Republic of Belarus, Ukraine, Kazakhstan and other countries.
When registering a business, an individual entrepreneur or organization must choose a code suitable for the future type of activity. Regardless of whether an individual entrepreneur or, for example, a legal entity is registered, the codes for them will be the same. That is, the classification of an organization is not affected by the form of ownership.
OKVED is divided into 17 parts, groups, subgroups, types and classes. They will be discussed in detail below.
Time
When sending documents to the registration authorities, it is necessary to correctly understand what activities the organization will be engaged in. If further development is not provided for in time, then after some time it will be necessary to make changes to existing documents.
It may take some time to complete the required applications, submit documents to the IRS, and make changes. Any inaccuracy may result in refusal. Before making a decision, we advise you to contact specialists who will help you choose codes and fill out the necessary documents. This will help you avoid mistakes and achieve the desired result with less effort.
Video: What is OKVED and how to choose it
The video explains in detail what OKVED is, why it is needed, what “pitfalls” there are when using it, and how to choose the right one. At the same time, you need to remember that OKVED is not just statistics, but a code that can directly affect your expenses.
If you decide to organize a company and want to choose an activity code, first decide on the focus of your business, then which tax regime is most preferable for you, and based on this analysis, consider the codes and choose the most suitable ones. If you have immediate plans to expand your activities, immediately add subcodes to your selection.
Responsibility
In existing legislation there is no punishment for activities that do not comply with the codes. Adopted court decisions prove that if an organization carries out activities according to unspecified codes, then it does not bear any responsibility for such actions.
But on the other hand, it is worth considering that with such actions, an organization or an individual entrepreneur can be held liable in accordance with Art. 14.25 Code of Administrative Offenses of the Russian Federation. For failure to provide or provision of false information about an organization or entrepreneur, a fine may be imposed on the culprit. The amount can reach five thousand rubles.
If for some reason you had to start an activity or you forgot to indicate any code, we recommend that you submit an application to make the necessary changes or additions within three days. In this case, no punishment or fine is provided.
Online resources for selecting OKVED codes
As mentioned above, in 2021 there is only one edition of the Classifier - OKVED-2. Therefore, it is extremely important to select valid codes from the new directory. The easiest way to do this is with the help of electronic versions of the Classifier. They are presented on many portals, but for reliability it is better to use proven resources.
Official site
Website: okved.rf
Here it is easy to find a 100% current and reliable version of the Classifier with the ability to quickly switch between sections, groups, subgroups, etc. You can search by specific group number or activity name. The codes that suit you can be instantly added to your Favorites and then printed. And also on the site you will find the old edition of the Classifier (OK-029 2001 Rev. 1).
The current electronic version of the Classifier with convenient navigation through sections can be found on the official OKVED website
Those individual entrepreneurs who were previously registered and worked using old codes will find the code converter useful. The system analyzes both editions and shows which encodings correspond to these types of activities in OKVED-2.
Using the code converter, you can find out new codes corresponding to the types of activities that you registered previously
Third party services
Website: www.eregistrator.ru
eREGISTRATOR is a large company specializing in online preparation of registration documents in the Russian Federation. You can also find the current electronic version of OKVED on the organization’s website. But the main advantage of the service is the business packages section, where there are ready-made collections of codes for almost any type of activity.
Using code in reporting
The first edition of the classifier in question was valid until the beginning of two thousand and seventeen. This means that when filling out accounting and tax reports, officials had the right to indicate codes taken from both the new and old registers. The final transition to OKVED 2 took place in January two thousand and seventeen. Together with the new edition of OKVED, entrepreneurs must use a new type of OKDP (Classifier of types of activities, products and services).
Contributions to the budget
When filling out a tax return, an entrepreneur should indicate the details of his company. One of the important details is the OKVED code, which reflects the direction of the entrepreneur’s activity. This code is indicated on the title page of the tax return. As mentioned above, the code in question includes from two to six characters. These symbols are divided into several pairs using dots.
It should be noted that today the current legislation does not contain information on the level of responsibility for incorrectly indicating the code in tax reporting. This means that regulatory authorities do not impose penalties on an entrepreneur who made a mistake. In order to find out which code to indicate in the documents, you need to carefully study the registration certificate. This document contains information about the codes specified during business registration. You can also obtain the necessary information using a special reference book.
The classification of a company according to OKVED is not affected by either the form of ownership or the source of investment
How to change the code
The need to change and add codes may arise when expanding your business and developing new markets. In order to change the OKVED code, you should contact the registration authority. To make changes to existing documents, an entrepreneur must submit an appropriate application.
Let's look at the steps that need to be taken to change the main cipher. First of all, the entrepreneur should choose a new code. Changes associated with the choice of a new cipher must be recorded in the local acts of the organization. Next, the tax service submits an application to change the type of activity. According to the established rules, this application must be certified by a notary. After this, the entrepreneur needs to pay the state fee and provide a check to the FMS employees.
At the end of the above procedure, the business owner is given a certificate confirming the change in the OKVED code. After receiving this certificate, the entrepreneur receives a legal basis for conducting new activities.
