Insurance premiums in the Tax Code. From 2021

Introductory part

The commented changes were made in two documents. The first is Federal Law No. 243-FZ dated 07/03/16. It provides the following:

• in January 2021, the Tax Code will be supplemented with Chapter 34, which is called “Insurance premiums.” It includes articles 419 to 432, which set out the rules for calculating and paying contributions;
• The first part of the Tax Code of the Russian Federation has been changed. The essence of the amendments boils down to the following: all the basic principles that apply to taxes will also apply to insurance premiums from 2021.

The second document is Federal Law dated July 3, 2016 No. 250-FZ. It introduces a number of amendments to reflect the transfer of control over contributions from funds to tax authorities. These amendments provide, among other things, the following:

• On January 1, 2021, Federal Law No. 212-FZ of July 24, 2009 on insurance premiums will cease to apply;
• On January 1, 2021, a new version of the Federal Law dated 01.04.96 No. 27-FZ “On individual (personalized) accounting in the compulsory pension insurance system” (hereinafter referred to as the Law on Personalized Accounting) will come into force;
• On January 1, 2021, a new version of the Federal Law of December 29, 2006 No. 255-FZ “On compulsory social insurance in case of temporary disability and in connection with maternity” will come into force;
• On January 1, 2021, a new version of the Federal Law dated July 24, 1998 No. 125-FZ “On compulsory social insurance against accidents at work and occupational diseases” (hereinafter referred to as the Law on Compulsory Social Insurance against Accidents at Work) will come into force.

The procedure for calculating and paying insurance premiums

For payer-employers, the procedure for calculating and paying insurance premiums has remained virtually unchanged. They must calculate and pay insurance premiums monthly. The deadline for paying insurance premiums remains the same: no later than the 15th day of the next calendar month in which payments were made to individuals.

The amount of insurance premiums is determined in rubles and kopecks and is calculated separately in relation to insurance premiums for compulsory pension insurance, insurance premiums for compulsory social insurance in case of temporary disability and in connection with maternity, and insurance premiums for compulsory medical insurance.

The billing period, as before, is the calendar year, and the reporting periods are the first quarter, half a year, nine months of the calendar year (Article 423 of the Tax Code of the Russian Federation).

In addition, the offset principle of spending compulsory social insurance funds in case of temporary disability and in connection with maternity is preserved. In this regard, from January 1, 2017, the payer will also be able to reduce the amount of insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity by the amount of expenses incurred by him for the payment of compulsory insurance coverage for this type of compulsory social insurance.

Moreover, if, at the end of the settlement (reporting) period, the amount of expenses incurred by the payer for the payment of insurance coverage for compulsory social insurance in case of temporary disability and in connection with maternity (minus the funds allocated to the policyholder by the Federal Social Insurance Fund of the Russian Federation in this period) exceeds the total amount of calculated insurance contributions for this type of insurance, the resulting difference will be subject to offset by the tax authority against upcoming payments for compulsory social insurance in case of temporary disability and in connection with maternity on the basis of confirmation received from the Federal Insurance Service of the Russian Federation of the expenses declared by the payer for the payment of insurance coverage for the corresponding settlement (reporting) period or compensation to the Federal Social Insurance Fund of the Russian Federation in the prescribed manner.

Verification of the correctness of the declared expenses for the payment of insurance coverage for compulsory social insurance in case of temporary disability and in connection with maternity is reserved for the Federal Social Insurance Fund of the Russian Federation. To carry out these checks, data from calculations of insurance premiums on calculated insurance contributions for compulsory social insurance in case of temporary disability and in connection with maternity and on the amount of expenses of payers for insurance payments will be sent by the tax authority to the Federal Social Insurance Fund of the Russian Federation.

Taxable object, taxable base and amount of contributions

The rules by which you need to calculate the amount of pension, medical contributions, as well as contributions to the Social Insurance Fund (except for contributions for injuries) will remain virtually unchanged. Thus, the taxable object will continue to be payments and other remuneration in favor of individuals accrued under employment and civil law contracts. The taxable base, as now, will be determined separately for each individual on an accrual basis from the beginning of the year. The maximum amount of the base for contributions in case of temporary disability and in connection with maternity will also remain (the size of the maximum amount is indexed annually). For pension contributions, a reduced rate will remain in relation to payments accrued in excess of the limit. All tariffs and benefits will remain the same.

The only innovation is provided for daily allowances. Now the entire amount of daily allowance fixed in the collective agreement or in a local regulation is exempt from these contributions. From January 2021 the situation will change. It will be possible not to pay contributions only for amounts not exceeding 700 rubles for domestic business trips, and for amounts not exceeding 2,500 rubles for foreign trips. This is enshrined in paragraph 2 of Article 422 of the Tax Code of the Russian Federation (see “Excessive daily allowances will be subject to insurance contributions”).

Plus, there will be clarification on how to determine the taxable base for income in kind. According to the current rules, the base includes the cost of goods, work or services specified in the contract. Starting next year, we will determine the price according to the rules of Article 105.3 of the Tax Code of the Russian Federation, that is, based on market prices. It is separately stipulated that VAT is not excluded from the taxable base (clause 7 of Article 421 of the Tax Code of the Russian Federation).

With regard to contributions “for injuries” everything will remain the same. Daily allowances will be released in full, and income in kind will be taken into account in the database at negotiated prices.

Base for calculating insurance premiums

The base for calculating insurance premiums is defined as the amount of payments and other remunerations that are subject to taxation, accrued by payers of insurance premiums for the billing period in favor of individuals, with the exception of amounts not subject to insurance premiums, for example: benefits, compensation, financial assistance, etc. (Article 421 of the Tax Code of the Russian Federation).

In this case, the base for calculating insurance premiums is determined separately for each individual at the end of each calendar month from the beginning of the billing period on an accrual basis.

This base has a limit, after which insurance premiums are not charged. The exception is insurance premiums paid by the main category of payers when applying the insurance premium rate for compulsory pension insurance in the amount of 22%. In this case, insurance premiums are also levied on payments in excess of the established maximum value of the base of insurance contributions for compulsory pension insurance in the amount of 10% in excess of the specified amount.

The maximum value of the base for calculating insurance premiums is subject to annual indexation from January 1 of the corresponding year based on changes in the average salary in the country. For the period 2015–2021, the maximum value of the base for calculating insurance contributions for compulsory pension insurance increases annually by the increasing coefficients established for the corresponding year:

• in 2021 – 1.9;
• in 2021 – 2.0;
• in 2021 – 2.1;
• in 2021 – 2.2;
• in 2021 – 2.3.

What reports to submit to the Federal Tax Service?

Starting in 2021, fee payers will begin to report not only to the funds, but also to the tax authorities. For this purpose, a single quarterly calculation is being introduced, which will replace several existing forms at once: RSV-1, RSV-2, RV-3 and 4-FSS (see “Federal Tax Service: reporting on insurance premiums will be combined into a single calculation”, at the time of publication of this article, the form has not yet been approved). Policyholders will submit a single calculation to the Federal Tax Service no later than the 30th day of the month following the billing or reporting period (Clause 7, Article 431 of the Tax Code of the Russian Federation). Companies and individual entrepreneurs with an average number of employees of more than 25 people are required to submit calculations in electronic form via telecommunications channels. All other payers of contributions will be able to report on paper (clause 10 of Article 431 of the Tax Code of the Russian Federation).

Fill out, check and submit insurance premium calculations online

It is important that the total amount of pension contributions in the calculation coincides with the amount of contributions for each insured person. Otherwise, such calculation is considered invalid.

Please note that there is no need to report contributions to the tax authorities for 2021 and earlier periods.

What reports should be submitted to the funds?

Reporting to funds will remain the same, but will be somewhat different. In addition to the abolition of the forms RSV-1, RSV-2, RV-3 and 4-FSS, which was mentioned above, other innovations will appear.

Firstly, the deadline for submitting the monthly SZV-M form will change. Now it is supposed to be submitted to the Pension Fund no later than the 10th day of the month following the reporting month. In 2021 and beyond, this form must be submitted no later than the 15th day of the month following the reporting month (new edition of clause 2.2 of Article 11 of the Law on Personalized Accounting).

Fill out, check and submit the SZV-M for free via the Internet

Secondly, next year there will be a new annual report in which information about the length of service must be indicated (at the moment the form has not been approved). The deadline for submission is no later than March 1 of the year following the reporting year (new edition of clause 2 of Article 11 of the Law on Personalized Accounting). Information for 25 people or more is submitted to the Pension Fund in electronic form via telecommunication channels. Information for a smaller number of insured persons can be submitted on paper.

Thirdly, from next year you will have to report to the Social Insurance Fund only on contributions “for injuries”. The deadlines for submission will be the same as for 4-FSS: in the case of electronic reporting - no later than the 25th day of the month following the reporting one, and in the case of “paper” reporting - no later than the 20th day of the month following the reporting one. As now, policyholders with an average number of more than 25 people will be required to report electronically via the Internet, all others will be able to submit reports on paper (new edition of paragraph 1 of Article 24 of the Law on Compulsory Social Insurance against Accidents at Work).

Please note that the listed innovations do not apply to reporting for 2021 and earlier periods. Primary and updated calculations for these periods should be submitted to the funds using the “previous” forms and formats.

Composition of reporting on insurance premiums

The new type of reporting form is subject to the same rules as for filing tax returns. All words in it are written in capital letters, with dashes or zeros placed in unnecessary cells. KND form 1151111 contains a title page and three sections. The first subsection includes several mandatory pages that are filled out by all individual entrepreneurs. These include:

1. Calculation 1.1 and 1.2 of the first subsection (in Appendix No. 1) (amounts for pension and health insurance).
2. Appendix No. 2 of the first part of the report (maternity and calculation of sick leave).
3. Section No. 3 (passport data and other information about employees).

The remaining pages of the form are used only when necessary.

Reimbursement of social insurance expenses

In 2021, employers will still have the right to reimburse benefits (except for the first three days on a “non-maternity” ballot) from the Social Insurance Fund. The policyholder will be able to transfer contributions minus benefits. If the amount of contributions turns out to be less than the amount of benefits, then the difference is allowed to be offset against the payment of contributions in subsequent periods, or to request the missing funds from the Social Insurance Fund.

The expenses will be checked as follows. Tax authorities, having received a single quarterly calculation from the policyholder, will transfer the information to the territorial body of the Social Insurance Fund. Inspectors from social insurance will verify the accuracy of the declared expenses by conducting a desk or on-site inspection. They will report the results to the tax authorities. If the result is negative, the Federal Tax Service will send the policyholder a demand for payment of the missing contributions. If the audit result is positive, the expenses will be accepted, and the tax office, if necessary, will offset or return the difference between contributions and expenses. We would like to add that the above algorithm will be applied until December 31, 2021 inclusive. And not everywhere, but only in regions that have not yet joined the pilot project for paying benefits directly from the Social Insurance Fund. Starting from January 2019, the reimbursement procedure will become a thing of the past, since all regions without exception will begin to receive benefits directly from social insurance.

Contribution checks

Starting from January 2021, tax officials will conduct desk and on-site audits of contributions (except for contributions for injuries). Moreover, employees of the Federal Tax Service will check the correctness of the calculation and payment of contributions according to the same rules by which they now check the calculation and payment of taxes. The verification of expenses for compulsory social insurance, as before, will be carried out by the FSS (we talked about this above). Thus, the same period can be checked twice: first time by the tax office, second time by social insurance.

The pension fund will control only personalized reporting, namely the SZV-M form and new annual information about the length of service. The transition period rules are as follows. Reviews of contributions (except for “injury” contributions) scheduled in 2017 and beyond, but relating to 2021 and earlier periods, will be carried out by the funds. Having discovered violations and arrears, fund employees will report them to the tax authorities, and they will take appropriate measures.

Control of contributions “for injuries” for all periods without exception will remain with the Social Insurance Fund.

Fines

Starting from 2021, tax authorities will begin to punish violations related to contributions (except for contributions for injuries). Moreover, all sanctions provided for tax violations will also apply to contributions. In particular, for failure to submit a calculation of contributions, the policyholder will be fined on the basis of Article 119 of the Tax Code of the Russian Federation, for a gross violation of the rules for accounting for the base of contributions - on the basis of Article 120 of the Tax Code of the Russian Federation, etc.

FSS employees will continue to be punished for violations related to “injury” contributions. The types of sanctions are listed in the new edition of the Law on Compulsory Social Insurance against Occupational Accidents. For example, for refusing to provide documents for verification, the policyholder will be fined 200 rubles. for each document not submitted (Article 26.31 of the said Law).

The pension fund will be able to apply two types of sanctions: for failure to provide annual information about the length of service (500 rubles for each insured person), and for violation of the procedure for submitting reports in the form of electronic documents (1,000 rubles). This is spelled out in the new version of Article 17 of the Law on Personalized Accounting.

Basic requirements for the report form

The accountant needs to know the composition of payments to individuals, which are not subject to contribution. Such income includes:

• benefits from the labor exchange or other government agencies (for example, unemployment);
• compensation from the state : provision of housing, money for housing and communal services, purchase of food, fuel, payment of expenses for professional sports, personnel training and others;
• amounts of monetary assistance paid once for compensation of damage from a natural disaster and in some other cases;
• voluntary formation of the funded part of employee pensions and other payments reflected in Article 422 of the Tax Code of the Russian Federation.

There are certain requirements for filling out the calculation form:

1. Columns and fields are filled in strictly in accordance with their purpose.
2. Page numbering starts from zero (“001”, “020”).
3. For kopecks, columns are provided next to the main amount in rubles.
4. When filling out electronically, the Courier New font is set.
5. Text fields are filled in from the first empty cell, starting from the left.
6. Zeros are placed in the number boxes, and dashes are used if there is no data.

Refund of overpaid insurance premiums

In January of next year, policyholders will retain the right to a refund of overpayments on premiums, but it will be the tax authorities who will return it, not the funds. The refund procedure will be the same as for taxes, but a new condition will appear. If overpaid pension contributions are reflected in personalized reporting, and the Pension Fund of the Russian Federation posted them to personal accounts, the tax authorities will not return the overpayment. This rule is enshrined in the newly created paragraph 6.1 of Article of the Tax Code.

Excessively paid contributions “for injuries” will be returned by the Social Insurance Fund. In the new edition of the Law on Compulsory Social Insurance against Accidents at Work, Article 26.12 will appear, which provides an algorithm for offsetting and returning overpayments. This algorithm is similar to that applied to other contributions.

Blocking accounts

It is not entirely clear whether employees of the Federal Tax Service will be able to block the current account of the policyholder if he does not submit the payment for contributions. From the new wording of paragraph 11 of Article of the Tax Code of the Russian Federation it follows that the blocking rules apply to contribution payers. However, in paragraph 3 of Article of the Tax Code of the Russian Federation, which lists all acceptable grounds for blocking, payment of contributions not submitted on time is not listed.

It is possible that legislators will soon eliminate this contradiction. If this does not happen, then disputes will most likely arise between tax authorities and policyholders, which will be resolved in court.

What will change for separate divisions

Significant innovations are provided for organizations and individual entrepreneurs that have opened separate divisions. Let us remind you that now it is necessary to pay fees and submit reports at the location of the unit only if it has its own current account and a separate balance sheet.

Starting next year, the requirement to have an account and balance will be abolished. This means that in 2021 and beyond, separate divisions located in Russia and accruing remuneration and other payments in favor of individuals will begin to transfer contributions (except for contributions “for injuries”) and submit calculations at the place of their registration. This is stated in paragraph 11 of Article 431 of the Tax Code of the Russian Federation.

Also, from 2021, policyholders will have a new obligation - to report to the Federal Tax Service at the location of the parent organization that the Russian division is vested with the authority to calculate payments and rewards to individuals. This must be done within one month from the date of vesting of powers (newly created sub-clause 7, clause 3.4 of Article of the Tax Code of the Russian Federation). True, the new obligation applies only to units that began making payments to individuals in 2017 and later. If the reward was accrued before, no messages need to be made.

Submit a message via the Internet about vesting a separate division with the authority to calculate payments to individuals Submit for free

There are no changes to “injury” contributions. Simply put, segregated units in 2021 and beyond will only pay and report these fees if they have an account and balance.

Payers of insurance premiums

The Tax Code distinguishes two categories of insurance premium payers (Article 419 of the Tax Code of the Russian Federation):

• payers making payments and other remuneration to individuals (organizations, individual entrepreneurs, individuals who are not individual entrepreneurs);
• payers who do not make payments and other remuneration to individuals, namely individual entrepreneurs, lawyers, notaries engaged in private practice, arbitration managers, appraisers, patent attorneys and other persons engaged in private practice in accordance with the legislation of the Russian Federation.

The list of their responsibilities is quite wide (clause 3.4 of Article 23 of the Tax Code of the Russian Federation):

• payment of insurance premiums established by the Tax Code of the Russian Federation;
• keeping records of objects subject to insurance premiums, the amounts of calculated insurance premiums for each individual in whose favor payments and other remuneration were made;
• submission to the tax authority at the place where insurance premium payments are recorded;
• submission to the tax authorities of documents necessary for the calculation and payment of insurance premiums;
• submission to the tax authorities, in cases and in the manner provided for by the Tax Code of the Russian Federation, information about insured persons in the individual (personalized) accounting system;
• ensuring for six years the safety of documents necessary for the calculation and payment of insurance premiums;
• a notification to the tax authority at the location of the Russian organization that pays insurance premiums about vesting a separate division with the authority to accrue payments and rewards in favor of individuals within one month from the date of vesting it with the corresponding powers;
• other duties provided for by the legislation of the Russian Federation on taxes and fees.

What has changed for individual entrepreneurs and other “individuals”

Citizens who work for themselves will continue to pay fixed payments for health insurance. Premiums for temporary disability and maternity insurance will remain voluntary for them. As now, they will not pay “injury” contributions. There is one change regarding pension contributions. It applies to “individuals” who received income over 300,000 rubles. As now, they will add 1% of the amount of income exceeding 300,000 rubles to the fixed amount of contributions. As now, information about income will be received by inspectors from tax returns. But they will cancel the rule according to which, in case of failure to submit a declaration, auditors charge contributions in the maximum amount. In other words, starting next year, a failed declaration will not result in an increase in contributions “for oneself” for individual entrepreneurs.

As for reporting, there are not many changes. Entrepreneurs and other “individuals” will still not submit payments for fixed contributions. But for the heads of peasant (farm) households, new deadlines are provided. They will submit payments no later than January 30 of the year following the billing period (currently the deadline for submission is the last day of February).

Insurance premiums in 2021 for individual entrepreneurs

In 2021, self-employed citizens will pay fixed payments for health insurance, as was the case previously. Contributions for insurance in case of temporary disability and in connection with maternity will also remain voluntary. Self-employed citizens do not need to pay insurance premiums.

The change is provided for pension contributions. This applies to individual entrepreneurs who received income of more than 300,000 rubles. As before, 1% of the amount of income that exceeds 300,000 rubles must be added to the fixed amount of contributions.

Tax inspectors will continue to receive income data from declarations. At the same time, the rule according to which a maximum fine is charged for failure to submit a declaration is cancelled.

Reporting on contributions for individual entrepreneurs has not changed - they will again submit calculations for fixed contributions. And the heads of peasant (farm) households will submit reports on new deadlines. Thus, they will need to submit their calculations no later than January 30 of the year following the billing period. Previously, the deadline for submitting reports was the last day of February.