Tax holidays for newly registered, created individual entrepreneurs on the simplified tax system, patent: what is it, who is entitled to benefits under the law - grace period for different types of activities, how to get an entrepreneur

Tax holidays - 2020-2021

Tax holidays for individual entrepreneurs are an opportunity not to pay tax under a simplified tax regime or a patent for two years after state registration as an individual entrepreneur, subject to certain conditions (clause 4 of article 346.20, clause 3 of article 346.50 of the Tax Code of the Russian Federation).
This bonus:

allows individual entrepreneurs to reduce the tax burden;
makes it possible to use saved funds for business development.

Individual entrepreneurs acquired the right to pay tax under the simplified tax system and special tax system at a rate of 0% back in 2015. Are there tax holidays for starting individual entrepreneurs at present? Yes, I have. Initially, the validity period of this event was set until 12/31/2020, but it has now been extended until 01/01/2024. Thus, individual entrepreneurs will have the opportunity to take advantage of this tax preference for a long time if they:

work in a region where a regulatory act on tax holidays has been adopted;
use simplified taxation system or PSN;
carry out business activities in the field of personal services, production, scientific and (or) social spheres, provide personal services or provide places for temporary residence;
the share of income from preferential activities is at least 70%.

Regional authorities may establish additional restrictions on the use of preferential holidays for individual entrepreneurs—for more details, see below.

Who and under what conditions can “go” on a tax holiday?

Tax holidays are a period established by law during which newly registered individual entrepreneurs using the simplified tax system or special tax system can apply zero tax rates established in connection with the adoption of Federal Law No. 477-FZ of December 29, 2014 on amendments to Part 2 of the Tax Code of the Russian Federation.

Tax holidays in 2021 will be available to individual entrepreneurs who comply with a number of requirements:

The individual entrepreneur must be registered for the first time.
An individual entrepreneur must use one of two taxation systems - simplified taxation system and PSN. If a general taxation system or special regimes are applied, a newly registered entrepreneur can switch to the simplified tax system or special tax system within two years in order to take advantage of the benefit.
The activities of individual entrepreneurs must be related to the production, social, scientific spheres, and consumer services (subjects can establish types of activities within each sphere at their own discretion, it needs to be clarified).

In 2021, entrepreneurs providing premises for temporary use, that is, hotels (Clause 4 of Article 346.20 of the Tax Code of the Russian Federation), may take a tax holiday. It is known that small hotels and guest houses in Crimea can take advantage of this opportunity from January 1, 2021.

The share of services, works or goods subject to a 0% tax rate must be at least 70% of total income.

Tax holidays are valid for no more than two tax periods from the date of registration of an individual entrepreneur.

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Details

Regions have the right to independently determine specific types of activities that are subject to tax benefits and set restrictions on their use depending on two factors:

number of employees;
income limit.

It is important to remember that tax holidays apply exclusively to taxes paid under the simplified tax system and special tax system, while they do not exempt entrepreneurs from other taxes (excise taxes, land, transport taxes, etc.). Also, individual entrepreneurs, despite tax holidays, must pay insurance premiums for compulsory pension insurance for themselves and their employees.

Please note that at the end of the year you need to submit a report according to the simplified tax system indicating the rate of 0%.

The tax holiday will end on January 1, 2024. So first-time entrepreneurs have three years to take advantage of them and save money.

Are there regional restrictions for starting entrepreneurs?

When introducing tax holidays on their territory, regional authorities have the right to establish restrictions:

by types of activities covered by vacation;
by number of employees and/or income received;
by the duration of the tax holiday (this can be one tax period or two);
according to the period of validity of the regional law on tax holidays ─ it can be valid until the end of the officially established period (until December 31, 2023), and in some regions the law has already expired.

Regions that do not consider it necessary to introduce this regime on their territory have the right not to adopt a law on tax holidays for individual entrepreneurs. In such a situation, entrepreneurs are deprived of the opportunity to apply a 0% rate, even if all other criteria are met.

We described in this publication how to find a list of regions with current laws on tax holidays for individual entrepreneurs.

Example 1

IP Samolov I.G. works in the territory where the law on tax holidays is in force. The date of registration with the tax authorities is 01/16/2020, and the date of entry into force of the law is 01/25/2020. An entrepreneur cannot count on tax holidays, since he registered as an individual entrepreneur before the law came into force.

Example 2

Individual entrepreneur I. E. Kasimov registered with the tax office on 02/01/2020 with the expectation that by the end of 2021 he would be able to save on the cost of the patent by taking advantage of tax holidays. The tax authorities gave him a notice to pay the patent at the regular (non-zero) rate. The fact is that the regional law was in force only from 2017 to 2021. And from 2021 in this region, the zero rate for individual entrepreneurs does not apply.

Tax holidays for LLCs

The original bill provided for the introduction of tax holidays for both individual entrepreneurs and LLCs. However, in the end it was decided to provide this opportunity only to individual entrepreneurs.

One of the reasons why tax holidays were not introduced for LLCs is the difficulty of controlling entrepreneurs who want to unlawfully take advantage of the benefit.

The fact is that tax holidays are provided only to first-time registered entrepreneurs. If the number of registrations and liquidations of individual entrepreneurs is easy to track using the TIN of an individual, then the situation with organizations is more complicated. Each organization receives its own individual number upon registration. In this regard, it will be difficult to track the purpose for which a new organization is registered: for the purpose of developing a new business or receiving benefits.

As for individual entrepreneurs, the tax service intends to conduct thorough monitoring of newly registered individual entrepreneurs in order to identify re-registrations in the names of wives, children, relatives, and so on.

How to apply for tax exemption and how to report?

How to apply for tax holidays for individual entrepreneurs? Do I need to notify the tax authority that an individual entrepreneur is subject to tax holidays? The law does not require this. But it is better for the entrepreneur to check with his inspection whether any additional papers are needed from him in this regard.

Practice shows that sometimes additional clarification is indispensable - inspectors may not see any reason to apply a zero rate to individual entrepreneurs. This may be due to technical difficulties in correctly qualifying individual activities.

Tax authorities may deny an individual entrepreneur a zero rate if the wording in the regional law and the name of its type of activity look different. Then the individual entrepreneur can give the necessary explanations in writing, which will help convince controllers and obtain the right to a zero rate.

Attention! Hint from ConsultantPlus It is possible that you paid the cost of a patent or tax under the simplified tax system, and then found out about tax holidays. If they apply to you, then... (for more details, see K+).

Holidays for individual entrepreneurs exempt them from taxes, but do not require reporting - individual entrepreneurs using the simplified tax system as usual submit a declaration at the end of the year indicating a zero tax rate. Entrepreneurs with a patent do not need to report to the tax office.

The individual entrepreneur is not required to submit any additional reports related to the application of the zero rate during the holidays.

Is it possible to save on insurance premiums?

Paying insurance premiums for individual entrepreneurs is a serious financial burden. Unfortunately, tax holidays do not apply to insurance premiums. This means that from the very beginning of his activities, the entrepreneur is fully obliged to fulfill all the obligations of the insurer to extra-budgetary funds - this equally applies to contributions from the salaries of individual entrepreneurs’ employees, and to the entrepreneur’s contributions for himself.

Officials, when asked about the exemption of individual entrepreneurs from paying contributions during tax holidays, note the following (letter of the Ministry of Finance of Russia dated October 18, 2017 No. 03-11-11/68194):

The status of an individual entrepreneur is not only the opportunity to exercise certain rights and guarantees, but also the assumption of risks and responsibilities: according to the rules of doing business, fulfilling tax and non-tax obligations, including the payment of insurance premiums.
At the expense of insurance contributions received by extra-budgetary funds, insurance guarantees are provided for the insured persons: for the payment of pensions, temporary disability benefits, social benefits in connection with maternity, etc.

Officials proceed from the fact that the state does not force a citizen to engage in one or another type of business activity. Before receiving the status of an individual entrepreneur, he himself assesses his readiness for this process in terms of education, skills, finances and property, including the ability to bear the burdens inherent in an individual entrepreneur.

Tax holidays for entrepreneurs in the Leningrad region

Tax rate - 0%!

In the Leningrad region, there are tax holidays for newly registered individual entrepreneurs. This support measure allows the application of a zero tax rate for 2 years (two tax periods) to entrepreneurs who operate in priority areas - production, social, scientific and in the field of consumer services to the population.

Who is eligible for tax holidays?

entrepreneurs registered as individual entrepreneurs for the first time
Individual entrepreneurs using the simplified taxation system (STS) or the patent taxation system (PTS)
Individual entrepreneurs carrying out certain types of activities (the list under the simplified tax system and PSN is different)
entrepreneurs whose income from “preferential” activities amounts to at least 70% of total income

Attention! At a tax rate of 0%, payment of insurance contributions to the Pension Fund, Medical Insurance Fund, Social Insurance Fund, as well as personal income tax for employees is made in the prescribed manner. In addition, the individual entrepreneur pays insurance premiums for himself in a fixed amount, which is calculated in accordance with Art. 430 of the Tax Code of the Russian Federation.

Also note that the first tax period is considered to be the year of registration of the individual entrepreneur.

The list of activities for which individual entrepreneurs have the right to tax holidays is shown below; it is also posted on the federal tax service portal www.nalog.ru

How to start applying the 0% rate

When registering an individual entrepreneur, check whether you can use tax holidays for the chosen type of activity
if you plan to use the simplified tax system, submit a notification of tax registration using the form and simply apply the zero rate in the future
if you are going to apply a patent, then submit an application for a patent in the recommended form and indicate on the second page of the application the applicable tax rate of 0%, as well as a link to the law according to which this rate is applied - Law of the Leningrad Region dated July 20, 2015 No. 73-OZ “On amendments to the regional laws “On establishing the tax rate levied in connection with the application of the simplified taxation system in the territory of the Leningrad region” and “On the patent taxation system in the territory of the Leningrad region.”

Types of business activities under a simplified taxation system*

(5% tax on income reduced by expenses)

Agriculture (agricultural production (processing), fishing, fish farming.
Production of food products, including drinks.
Textile and clothing production.
Production of leather, leather goods and footwear production.
Wood processing and production of wood products.
Production of cellulose, wood pulp, paper, cardboard and products made from them.
Chemical production.
Production of rubber and plastic products.
Production of other non-metallic mineral products.
Metallurgical production and production of finished metal products.
Production of machinery and equipment.
Production of electrical equipment, electronic and optical equipment.
Production of vehicles and equipment.
Other productions.
Operation of other places for temporary residence.
Providing tourist excursion services.
Education.
Health and social service provision.
Physical education and health activities.
Activities related to the use of computer technology and information technology.
Research and development.

Types of business activities under the patent taxation system**

(exemption from value added tax, income of individuals, property of individuals)

Repair and sewing of clothing, fur and leather products, hats and textile haberdashery products, repair, sewing and knitting of knitwear.
Shoe repair, cleaning, painting and sewing.
Manufacturing and repair of metal haberdashery, keys, license plates, street signs.
Repair and maintenance of household radio-electronic equipment, household machines and household appliances, watches, repair and manufacture of metal products.
Furniture repair.
Photo studio, photo and film laboratories services.
Services for installation, electrical, sanitary and welding works.
Services for training the population in courses and tutoring.
Services for the supervision and care of children and the sick.
Production of folk arts and crafts.
Other production services (services for processing agricultural products and forest products, including grain grinding, peeling cereals, processing oil seeds, making and smoking sausages, processing potatoes, processing customer-supplied washed wool into knitted yarn, dressing animal skins, combing wool, grooming of domestic animals, repair and production of cooper's dishes and pottery, protection of gardens, vegetable gardens and green spaces from pests and diseases; production of felted shoes; production of agricultural implements from customer's material; engraving work on metal, glass, porcelain, wood, ceramics; production and repair of wooden boats; repair of toys; repair of tourist equipment and inventory; services for plowing vegetable gardens and sawing firewood; services for the repair and production of eyeglasses; production and printing of business cards and invitation cards for family celebrations; bookbinding, stitching, edging, cardboard work ; charging gas cartridges for siphons, replacing batteries in electronic watches and other devices).
Production and restoration of carpets and rugs.
Residential cleaning and housekeeping services.
Conducting physical education and sports classes.
Services of chefs for preparing dishes at home.
Services related to the marketing of agricultural products (storage, sorting, drying, washing, packaging, packing and transportation).
Services related to the maintenance of agricultural production (mechanized, agrochemical, land reclamation, transport work).
Engagement in medical or pharmaceutical activities by a person licensed for these types of activities.
Rental services.
Excursion services.
Providing services for slaughter, transportation, distillation, grazing.
Production of leather and leather products.
Collection and procurement of food forest resources, non-timber forest resources and medicinal plants.
Drying, processing and canning of fruits and vegetables.
Production of dairy products.
Production of fruit and berry planting materials, growing vegetable seedlings and grass seeds.
Production of bakery and flour confectionery products.
Commercial and sport fishing and fish farming.
Silviculture and other forestry activities.
Translation and interpretation activities.
Activities caring for the elderly and disabled.
Provision of services (performance of work) for the development of computer programs and databases (software and information products of computer technology), their adaptation and modification.
Repair of computers and communication equipment.
Furniture manufacturing.

*Types of business activities for the purpose of applying a tax rate of 0 percent are established by regional law No. 78-oz dated October 12, 2009 “On establishing the tax rate levied in connection with the use of a simplified taxation system in the territory of the Leningrad region” (as amended by the regional Law of July 20, 2015 No. 73-oz).

The proposed list contains the names of sections/subsections of the all-Russian classifier of types of economic activities (OK 029-2001 (NACE Rev. 1), codes of the all-Russian classifier of services to the population (OK 002-93), that is, types of business activities that individual entrepreneurs can actually carry out for the purpose of applying a tax rate of 0% is significantly higher.

**Types of business activities under the patent taxation system for the purpose of applying a tax rate of 0% are established by regional law dated November 7, 2012 No. 80-oz “On the patent taxation system in the Leningrad region.”

Back

How to calculate the share and what to do if it is insufficient?

Entrepreneurs often find it difficult to calculate the share of a preferential activity. But the possibility of applying a zero rate depends on the correctness of the calculations. How to correctly calculate this indicator if an individual entrepreneur has several types of activities, including both preferential and non-preferential ones? Let's explain with examples.

Example 3

IP Safiullin D.K. registered in a region where tax holidays apply. He applies the simplified tax system “income minus expenses” and is engaged in three types of activities, only one of which is included in the list of preferential ones.

Based on the results of the expired tax period, individual entrepreneur D.K. Safiullin received income in the total amount of 9,589,968 rubles, including:

activity 1 (preferential) - RUB 7,544,997;
activity 2 - 1,078,540 rubles;
activity 3 — 966,431 rub.

Calculation of the share from preferential activities:

7,544,997 / 9,589,968 = 0.787 or 78.7%

The calculated figure exceeds the legally established limit of 70%, which means that individual entrepreneur D.K. Safiullin is not obliged to pay the simplified tax system for this period.

Example 4

The income of individual entrepreneur D.K. Safiullina for the past year amounted to 9,589,968 rubles, including:

activity 1 (preferential) - 6,357,100 rubles;
activity 2 - RUB 2,386,219;
activity 3 — 846,649 rub.

Calculation of the share from preferential activities:

6,357,100 / 9,589,968 = 0.663 or 66.3%

The lower limit allowed by law has not been reached: 66.3% <70%, which means that IP Safiullina D.K. does not have the right to a zero tax rate. According to paragraph 4 of Art. 346.20 of the Tax Code of the Russian Federation, he is obliged to pay the simplified tax system at a rate of 15% on the basis of “income minus expenses”.

Features of applying tax holidays

Learn the specifics of tax holidays before you start saving. An entrepreneur who violates the rules for applying benefits will be forced by tax authorities to recalculate taxes and pay them in full (Clause 4 of Article 346.20 of the Tax Code of the Russian Federation).

The main rules for using tax holidays:

Tax holidays apply for two consecutive periods. You will not be able to take advantage of holidays in 2021 and 2020. Vacations must be continuous, for example, 2021 - 2019;
Income from preferential activities exceeds 70% of total income. The condition is important for individual entrepreneurs who conduct several types of activities. Let's say you are engaged in sewing production, including custom-made ones, and at the same time sell finished products in a store at the workshop. In this case, you need PSN for clothing production and a single tax on imputed income (UTII) in trade. If income from custom sewing exceeds 70% of total revenue, feel free to use tax holidays. When income from product sales exceeds 30% of total income, you are no longer entitled to the benefit;
The income level does not exceed the limit provided for in your tax system. The Tax Code limited the level of income of entrepreneurs on the simplified tax system to 150 million rubles and a patent to 60 million rubles (Article 346.13 of the Tax Code of the Russian Federation, Article 346.45 of the Tax Code of the Russian Federation). Regions can reduce the limit at their discretion (Article 346.12 of the Tax Code of the Russian Federation, Article 346.43 of the Tax Code of the Russian Federation), but no more than 10 times;
The number of employees does not exceed the limit established for the individual entrepreneur taxation system. The Tax Code established a limit on the number of employees for the simplified tax system of 100 people, and 15 for the PSN (Article 346.13 of the Tax Code of the Russian Federation, Article 346.45 of the Tax Code of the Russian Federation). Regions can change these figures at their own discretion (clause 4 of article 346.20, clause 3 of article 346.50 of the Tax Code of the Russian Federation): in Moscow, the maximum possible number of individual entrepreneur employees on the simplified tax system has been reduced to 15 people;
Tax holidays are available to manufacturing entrepreneurs, as well as those whose activities are related to science, education and sports. If you are engaged in trade, tax holidays are not for you. Regional authorities may accept the list of preferential activities proposed by the state in full, or they may retain benefits only in priority areas for the region;
Register an individual entrepreneur at the beginning of the year to save as much as possible on taxes. Individual entrepreneurs began working on the simplified tax system in November 2018. The tax period ended on December 31. The second tax period is 2021. Thus, an individual entrepreneur will be able to take advantage of the benefit in just 14 months. Entrepreneurs who register in January are exempt from paying tax for 24 months. Their tax savings last 10 months longer;
Don't forget to pay taxes that are not exempt from tax holidays. The benefit applies only to tax paid under the simplified tax system or special tax system. This means that you still have to pay tax on real estate with a cadastral valuation, land and transport tax, excise taxes and insurance premiums. Transport tax is paid by those who use motor vehicles in their business activities. For full-time employees and the individual entrepreneur himself, contributions are paid to the Pension Fund and the Social Insurance Fund. And, of course, do not forget to withhold and transfer personal income tax from employees’ salaries.

Should an individual entrepreneur keep records of income and expenses during the holidays using the simplified tax system?

Clause 1.2 of the Procedure for filling out the book of income and expenses, approved by Order of the Ministry of Finance of Russia dated October 22, 2012 No. 135n, states that taxpayers are required to ensure the completeness, continuity and reliability of recording the indicators of their activities necessary for calculating the tax base. Under these circumstances, there is no need to calculate the tax base for the tax - when multiplied by a rate of 0 percent, you will still get a zero value.

Why keep records then? Do tax holidays for individual entrepreneurs using the simplified tax system give them the right not to draw up a book of income and expenses (KUDiR)?

There is no direct answer to this question in tax legislation. However, a simplifier should not refuse to keep records for the following reasons:

the procedure for filling out the KUDiR does not provide for the possibility for individual entrepreneurs to be exempt from keeping records of income and expenses for the purpose of calculating the tax base, to which a 0% rate is applied;
For the absence of a completed book, individual entrepreneurs can be fined 10,000 rubles. (clause 2 of article 120 of the Tax Code of the Russian Federation).

In addition, information from KUDiR is necessary for the entrepreneur himself. If the income limit established in the regional law is exceeded or the share of income from preferential activities is less than 70%, the individual entrepreneur loses the ability to calculate tax at a rate of 0% and must determine tax liabilities in the usual manner.

Results

Tax holidays for individual entrepreneurs are valid in 2021, and will continue to be valid in 2021-2023.
They allow entrepreneurs on a simplified basis or a patent to apply a zero rate for the simplified tax system or PSN if a number of conditions are met: registration as an individual entrepreneur occurred for the first time after the regional authorities adopted the law on tax holidays, the share of income from preferential activities is at least 70%, and the types of activities themselves are listed in the regional law. The same law may establish additional restrictions on the average number and maximum allowable income. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Peculiarities of applying the tax holiday regime by type of individual entrepreneur activity

During the holidays, entrepreneurs are only exempt from paying the single tax under the simplified tax system (including the minimum tax) or the cost of a patent, but other taxes and insurance premiums must be paid for themselves and hired personnel. There is absolutely no need to submit any separate applications. In the declaration under the simplified tax system at the end of the reporting year, it is enough to indicate a zero rate, and when filing an application for a patent, form No. 26.5-1, the individual entrepreneur indicates a rate of 0%, referring to the regional law on tax holidays. You can find a sample application form here.

The zero rate for PSN or simplified tax system is valid for only 2 tax periods in a row. For the simplified tax system, this is the year of registration of the individual entrepreneur and the subsequent one, since the tax period for the “simplified tax system” is equal to the calendar year. For PSN - two consecutive patent validity periods, for example, if the first patent is applied for 4 months, and the next one for 10 months, the tax exemption will be valid for only 14 months.

Law No. 477-FZ allows regional authorities to set not only the duration of tax holidays for individual entrepreneurs by type of activity, but also to introduce additional restrictions on the number of employees and the amount of annual revenue. Regions can set any duration of holidays: one year or the required two grace years. As of today, the holidays have already ended in some regions. In some regions, tax holidays are not provided at all, or are applied only for one special regime: only for the simplified tax system or only for a patent.