What taxes do not need to be paid when applying the simplified tax system?
In general, organizations that have switched to the simplified system are exempt from income tax and property tax. Individual entrepreneurs - from personal income tax and personal property tax. In addition, both do not pay value added tax (except for VAT on imports). Other taxes and fees must be paid in accordance with the general procedure. Thus, “simplified” workers must make payments for compulsory insurance from employees’ salaries, withhold and transfer personal income tax, etc.
However, there are exceptions to the general rules. So, from January 1, 2015, some “simplified” residents need to pay property tax. From this date, the exemption from payment of this tax does not apply to real estate for which the property tax base is determined as the cadastral value. Such property may include, for example, retail and office real estate (clause 1 of article 378.2 of the Tax Code of the Russian Federation, clause 3 of article 346.11 of the Tax Code of the Russian Federation).
Features of taxation on the simplified tax system
When using the simplification, a business entity has the opportunity not only to significantly reduce the amount of tax payments, but also to replace several taxes with a single one.
Let's consider what taxes need to be paid, and from which the subject will be exempt:
| Must be paid if simplified payment is used | Exempt from payment when using simplification |
| Single tax, which is calculated when using a simplified tax | – |
| VAT, but only if the subject acts as an agent or accrues VAT on its own initiative | VAT |
| – | Income tax |
| Property tax, but only for those objects that are recorded at cadastral value | Property tax |
| Personal income tax | Personal income tax for individual entrepreneurs regarding types of activities under a simplified regime |
| Transport tax (when there is a base) | – |
| Land tax (when there is a base) | – |
| Water tax (when there is a base) | – |
In addition, for some types of activities reduced rates for payment of social contributions are established. Also, for some types of insurance (usually health insurance and social insurance), 0% rates apply. At this point in time, this reduction is valid until the end of 2018.
Limitations on the number of employees, the cost of fixed assets and shares in the authorized capital
Does not have the right to switch to a simplified system of organization and individual entrepreneurs if the average number of employees exceeds 100 people. The ban on the transition also applies to companies and entrepreneurs whose residual value of fixed assets exceeds 150 million rubles.
In addition, in general, the simplified tax system cannot be applied to enterprises if the share of participation of other legal entities in them is more than 25%.
Keep records and submit reports according to the simplified tax system via the Internet (for new individual entrepreneurs - a year free of charge)
Clarifications on the simplified tax system
- for limited liability companies, all tax payments must be made exclusively by non-cash payments;
- Documentary evidence of expenses deducted from income is required;
- the presence of restrictions on expenses for which the tax base can be reduced (list in Article 346.16 of the Tax Code of the Russian Federation).
- the need to maintain accounting records for legal entities;
- low probability of official partnership with individual entrepreneurs and organizations that are VAT payers;
- the need for timely payment of advance payments according to the data in the Book of Expenses and Income;
- requirement to conduct cash transactions in accordance with paragraph 4 of Article 346.11
- restrictions defined by the Tax Code of the Russian Federation for the simplified tax system: - for individual entrepreneurs: the number of personnel must be less than 100 people, income less than 1.5 million rubles, residual value of fixed assets less than 150 million rubles. — for commercial organizations (LLC, etc.): no branches, equity participation of other companies no more than 25%. To switch to the simplified tax system, there is a limit on income for the last 9 months of activity - 112.5 million rubles.
And one more important point - organizations and enterprises listed in the register of Article 346.12 (3) of the Tax Code of the Russian Federation cannot apply the simplified tax system. When switching to a simplified taxation system, an organization or individual entrepreneur is required to notify the tax authorities in the prescribed manner and within the established time frames defined in paragraphs 1 and 2 of Article 346.13.
The simplified taxation system in 2021 will inevitably continue its legislative evolution, taking into account public opinion and judicial practice of tax disputes.
How to switch to simplified tax system
Organizations that do not fall into the above categories can switch to the simplified tax system if their income for the period from January to September did not exceed 112.5 million rubles, multiplied by the deflator coefficient. In 2021, its value is 1.032 (see “Deflator coefficients approved for 2021”). This means that in order to switch to the simplified tax system from 2022, it is necessary that income for January-September 2021 does not exceed 116.1 million rubles (112.5 million rubles x 1.032).
If this condition is met, you must submit a notification to the tax office no later than December 31, and from January of the next year you can apply the “simplified tax system”.
Entrepreneurs who do not fall into the above categories can switch to the simplified tax system, regardless of the amount of income for the current year. To do this, they need to submit a notification to the tax office no later than December 31, and from January next year, individual entrepreneurs will have the opportunity to apply a simplified taxation system.
Newly created enterprises and newly registered individual entrepreneurs have the right to apply a simplified system from the date of registration with the tax office. To do this, you must submit a notification no later than 30 calendar days from the date of tax registration.
Violation of the deadlines for filing an application for the use of the simplified tax system deprives the company or entrepreneur of the right to use the simplified system.
The procedure for switching to the simplified tax system
The law specifies several ways to begin using the simplified tax regime.
When registering an LLC or individual entrepreneur
If a future business entity is only collecting all the necessary documents for registering an individual entrepreneur or opening an LLC, then he can submit an application to start using the simplified regime in a general package.
In this situation, along with forms confirming completion of the registration procedure, he will also be given a notice of application of the simplified tax system.
Attention: if at the time of opening a business there are still doubts about choosing a system, then this can be done within 30 days from the moment you receive the forms for registering an LLC or individual entrepreneur.
Transition from other modes
The Tax Code allows existing business entities to change the current tax regime to a simplified system.
But such a step is allowed only from January 1 of the calendar year. Therefore, in order to make the transition, you must complete and submit an application to the tax authority before December 31 of the current year. In it, the business entity indicates that it meets the criteria defined in the Tax Code for the application of the simplified tax system. The latter are calculated based on October 1 of the current year.
So, in order to start applying the simplified regime from January 1, 2019, it is necessary that as of October 1, 2021, the income received does not exceed 112.5 million rubles.
Another opportunity to start using a simplified version is not provided for by law.
How long do you need to use the “simplified”
A taxpayer who has switched to the simplified tax system must apply it until the end of the tax period, that is, until December 31 of the current year inclusive. Until this time, you cannot voluntarily refuse the simplified tax system. You can change the system at your own request only from January 1 of the next year, which must be notified in writing to the tax office.
Early transition from the simplified system is possible only in cases where a company or entrepreneur has lost the right to the simplified system within a year. Then the refusal of this system is mandatory, that is, it does not depend on the desire of the taxpayer. This happens when income for a quarter, half a year, nine months or a year exceeds 200 million rubles, multiplied by the deflator coefficient. In 2021, its value is 1.032 (see “Deflator coefficients approved for 2021”). This means that in 2021 the limit is 206.4 million rubles (200 million rubles x 1.032).
Also, the right to the simplified tax system is lost when the criteria for the cost of fixed assets or share in the authorized capital are no longer met. Or when the average number of employees for a quarter, half a year, 9 months or a year exceeded 130 people.
In addition, the right to a “simplified tax” is lost if an organization falls into a “forbidden” category in the middle of the year (for example, opens a branch or begins to produce excisable goods).
The termination of the application of the “simplified tax” occurs from the beginning of the quarter in which the right to it was lost. This means that an enterprise or individual entrepreneur, starting from the first day of such a quarter, must recalculate taxes using a different system. Penalties and fines are not charged in this case. In addition, if the right to a simplified system is lost, the taxpayer must notify the tax office in writing of the transition to a different taxation system within 15 calendar days after the end of the relevant period: quarter, half-year, nine months or year.
If the taxpayer ceases to engage in activities for which he applied the simplified system, then within 15 days he must notify his inspectorate about this.
Conditions for applying the simplified tax system in 2021
The simplified taxation system (STS) can be used by taxpayers (companies and individual entrepreneurs) who meet the requirements established by the Tax Code of the Russian Federation, namely:
- income for the tax (reporting) period - no more than 150 million rubles.
- the residual value of fixed assets in accordance with accounting data is no more than 150 million rubles.
- the average number of employees for the tax (reporting) period is less than 100 people
Additional requirements have been established for companies:
- share of participation in the authorized capital of other organizations – no more than 25%
- no branches (representative offices allowed)
Objects “STS income” and “STS income minus expenses”. Tax rates
A taxpayer who has switched to a simplified system must choose one of two objects of taxation. Essentially, these are two ways of calculating a single tax.
The first object is income. Those who choose it summarize their income for a certain period. Then they are multiplied by the tax rate. If revenues do not exceed 150 million rubles, and the average number of personnel does not exceed 100 people, the rate is 6%. Starting from the quarter in which income (calculated on an accrual basis from the beginning of the year) turned out to be more than 150 million rubles. and (or) the average number of employees turned out to be more than 100 people, a rate of 8% must be applied.
The second object of taxation is income reduced by the amount of expenses (“income minus expenses”). Here the tax amount is calculated as the difference between income and expenses multiplied by the tax rate. If revenues do not exceed 150 million rubles, and the average number of personnel does not exceed 100 people, the rate is 15%. Starting from the quarter in which income (calculated on an accrual basis from the beginning of the year) turned out to be more than 150 million rubles. and (or) the average number of employees turned out to be more than 100 people, a rate of 20% must be applied.
The Tax Code of the Russian Federation gives regions the right to set a reduced tax rate depending on the category of taxpayer. A rate reduction can be entered both for the “income” object and for the “income minus expenses” object. You can find out what preferential rates are accepted in your region by contacting your tax office.
You need to select an object of taxation before switching to the simplified tax system. Next, the selected object is applied throughout the entire calendar year. Then, starting from January 1 of the following year, you can change the object, having previously notified your tax office no later than December 31. Thus, you can move from one object to another no more than once a year. There is an exception: participants in a joint activity agreement or a property trust management agreement are deprived of the right to choose; they can only use the “income minus expenses” object.
Unified agricultural tax
The Unified Agricultural Tax (USAT) is a special tax regime that is intended for agricultural producers. Only those individual entrepreneurs and organizations whose income from agricultural activities is more than 70% have the right to apply the unified agricultural tax.
The Unified Agricultural Tax allows one single tax to replace the following taxes of the general taxation system: on property, on the profit of organizations / personal income tax of entrepreneurs. It is necessary to pay VAT, but if you have a small income, you can get an exemption from paying it under Article 145 of the Tax Code of the Russian Federation.
Read more about the single agricultural tax.
How to account for income and expenses
Taxable income under the simplified tax system is revenue from the main type of activity (income from sales), as well as amounts received from other types of activities, for example, from leasing property (non-operating income). The list of expenses is strictly limited. It includes all popular cost items, in particular, wages, cost and repair of fixed assets, purchase of goods for further sale, and so on. But at the same time, the list does not include such an item as “other expenses”. Therefore, tax authorities are strict during audits and cancel any expenses that are not directly mentioned in the list. All income and expenses should be recorded in a special book, the form of which is approved by the Ministry of Finance.
Under the simplified system, the cash method of recognizing income and expenses is used. In other words, income is generally recognized when money is received in the current account or cash register, and expenses are recognized when the organization or individual entrepreneur repays the obligation to the supplier.
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How to calculate a single “simplified” tax
First of all, you need to determine the tax base (that is, the amount of income, or the difference between income and expenses). The tax base is calculated on an accrual basis from the beginning of the tax period, which corresponds to one calendar year. In other words, the base is determined during the period from January 1 to December 31 of the current year, then the calculation of the tax base begins from scratch.
In addition, it is necessary to transfer advance payments to the budget based on the results of the reporting periods (quarter, half-year, 9 months).
Tax (advance payment) is calculated this way.
If income does not exceed 150 million rubles, and the average number of personnel does not exceed 100 people, we proceed as follows. We take the tax base for the reporting (tax) period and multiply it by the rate of 6% or 15%. From the resulting value we subtract the advance payment for previous reporting periods.
If in the middle of the year the income fell into the range of “more than 150, but less than 200 million rubles.” or the average number of employees falls in the range from 101 to 130 people, we follow the algorithm:
1. We are looking for the tax base for the period preceding the quarter in which income exceeded 150 million rubles, or the average number of employees exceeded 100 people. We multiply this base by the rate: 6% or 15%;
2. We calculate the taxable base for the entire reporting (tax) period. From it we subtract the base obtained in the previous step. We multiply the found number by the rate: 8% or 20%.
3. Add up the numbers obtained from steps 1 and 2.
Taxpayers who have chosen the “income minus expenses” object must compare the resulting single tax amount with the so-called minimum tax. The latter is equal to 1% of income. If the single tax, calculated in the usual way, turns out to be less than the minimum, then the minimum tax must be transferred to the budget. In subsequent tax periods, the difference between the minimum and “regular” taxes can be taken into account as expenses. In addition, those for whom the object is “income minus expenses” can carry forward losses to the future.
When to transfer money to the budget
The advance payment is transferred to the budget no later than the 25th day of the month following the reporting period.
At the end of the tax period, it is necessary to transfer the total amount of a single “simplified” tax to the budget, and different payment deadlines are established for organizations and entrepreneurs. Thus, legal entities must transfer money no later than March 31 of the next year, and individual entrepreneurs must transfer money no later than April 30 of the next year. When transferring the final tax amount, all advance payments made during the year should be taken into account.
In addition, taxpayers who have chosen the “income” object reduce advance payments and the final amount of tax on compulsory pension and health insurance contributions, contributions for compulsory insurance in case of temporary disability and in connection with maternity, for voluntary insurance in case of temporary disability of employees, and also for sick leave payments for employees. In this case, the advance payment or the final tax amount cannot be reduced by more than 50%. In addition to this, from January 1, 2015, it was possible to reduce the tax by the full amount of the trade tax paid.
Automatically generate a tax payment invoice based on the data from the declaration and submit reports via the Internet
How to report under the simplified tax system
You need to report on a single “simplified” tax once a year. Companies must submit a declaration under the simplified tax system no later than March 31, and entrepreneurs no later than April 30 of the year following the expired tax period. Reporting on the results of the quarter, half a year and nine months is not provided.
Taxpayers who have lost the right to simplified tax treatment must submit a declaration no later than the 25th of the next month.
Companies and individual entrepreneurs that have ceased to engage in activities falling under the simplified tax regime must submit a declaration no later than the 25th of the next month.
