Types of activities falling under the simplified tax system in 2021

Who has the right to apply the simplified tax system

All issues related to the simplified taxation system are regulated by Chapter 26.2 of the Tax Code of the Russian Federation. The simplified taxation system involves exempting the taxpayer from a number of tax payments:

Who does not have the right to apply the simplified tax system

The following organizations (individual entrepreneurs) do not have the right to apply the simplified taxation system (Article 346.12 of the Tax Code of the Russian Federation):

• organizations with branches;
• banks;
• insurers;
• non-state pension funds;
• investment funds;
• professional participants in the securities market;
• pawnshops;
• organizations engaged in the extraction and sale of mineral resources;
• organizations engaged in the production of excisable goods;
• organizations engaged in gambling activities;
• notaries and lawyers conducting private activities;
• organizations that have switched to agricultural tax;
• organizations in which the share of participation of other organizations is more than 25%;
• organizations with more than 100 employees;
• organizations whose residual value of fixed assets exceeds 150 million rubles;
• state and budgetary institutions;
• organizations that have not notified the tax authorities about the transition of the simplified tax system by December 31 or no later than 30 calendar days after tax registration for newly created organizations;
• microfinance organizations;
• private employment agencies.

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.

When can you lose the right to use the simplified tax system?

Entrepreneurs may lose the right to use the simplified tax system in cases where:

• at the end of the tax period, income exceeded 150 million rubles;
• the average number of employees exceeded 100 people;
• the residual value of fixed assets amounted to more than 150 million rubles.

The taxpayer must notify the tax authorities of the loss of the right to use the simplified tax system within 15 days after the end of the reporting period (first quarter, half a year, nine months), i.e. must be reported on time:

• until April 15;
• until July 15;
• until October 15.

In this case, the declaration must be submitted no later than the 25th day of the month following the reporting period, i.e.:

• until April 25;
• until July 25;
• until October 25.

If an organization operating under the simplified tax system has ceased to exist, it is necessary to submit a declaration to the tax authorities by the 25th day of the month following the month of termination of activity. Tax payment must be made during the same period.

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.

Who and under what conditions can apply the simplified tax system?

The taxpayer has the right to apply the simplified tax system, provided that the following requirements are met:

• the rules for applying the simplified tax system specified in Article 346.12 in relation to the types of activities of the organization are not violated (the list is indicated in the section “Who does not have the right to apply the simplified tax system?” of this article);
• the share of participation of third parties does not exceed 25%
• the average number of employees is no more than 100 people per year;
• the residual value of fixed assets as of January 1, 2017 does not exceed 150 million rubles;
• the amount of income does not exceed 150 million rubles for 9 months from the beginning of the tax period.

Example 3. ABC LLC in the reporting period for the first quarter of 2021 indicates income equal to 152 million rubles. Thus, ABC LLC is obliged to begin conducting its activities in accordance with the general taxation system from the 2nd quarter. If ABC LLC does not voluntarily express a desire to change the taxation system, it will be forced to work in accordance with the general taxation system.

The procedure for recognizing expenses for the simplified tax system

Expenses for the simplified tax system are recognized if they meet the requirements specified in clause 1 of Art. 252 of the Tax Code of the Russian Federation, and have a closed list contained in clause 1 of Article 346.16 of the Tax Code of the Russian Federation. In general terms they are divided into:

• expenses taken into account in the manner prescribed for calculating corporate income tax;
• expenses taken into account in a special manner.

Expenses are recognized on a cash basis

(by date of expenses incurred).

Features of the recognition of certain types of expenses are established in clause 2 of Article 346.17 of the Tax Code of the Russian Federation.

In order to take into account the consumption, check for compliance with the mandatory conditions

:

1. The expense is economically justified and aimed at generating income;
2. It corresponds to the list of expenses Art. 346.16 Tax Code of the Russian Federation;
3. There is a document confirming the expense (if paying in cash);
4. There is a document from the supplier (work completion certificate, delivery note);
5. The supplier was paid in full.

The validity of the expenditure plays an important role. He has the right to pay for any expenses, but he can only accept them as tax accounting expenses that were appropriate for doing business.

And if for income tax the list of expenses is quite vague, then for expenses on the simplified tax system you need to strictly adhere to the list in Art. 346.16 Tax Code of the Russian Federation.

Criteria for a simplified taxation system

In order to make a decision to switch to a simplified taxation system, an entrepreneur needs to very clearly understand the criteria of the simplified tax system:

Deadlines for submitting reports and paying taxes under the simplified tax system

The calculation of tax under the simplified tax system is carried out incrementally from the previous one and is taken into account in advance payments; the final payment will be calculated in the tax return. The timing of advance payments does not depend on the status of the taxpayer (legal entity or individual entrepreneur):

The deadline for submitting a tax return for the tax period and paying the finally calculated tax depends on the status of the taxpayer:

The tax return is submitted after the end of the tax period, i.e. next calendar year.

In case of violation of the deadlines for submitting a tax return and payment of the simplified tax system or violation of the deadlines for making advance payments, tax legislation provides for fines and penalties for negligent taxpayers.

Transition period and new rates

The introduction of a transition period for those taxpayers on the simplified tax system who slightly exceed the specified limits is currently being discussed. They will be subject to higher tax rates. If the income from the beginning of the year falls within the range of 150–200 million rubles and/or the number of employees is 101–130 people, the right to the simplified tax system is retained. In this case, starting from the quarter in which the limits were exceeded, an increased tax rate is applied. It is equal to 8% for the “income” object and 20% for the “income minus expenses” object. If the income exceeds 200 million rubles and/or the number of employees becomes more than 130 people, the right to “simplified” will be lost.

The increased tax rate will apply not only this year, but also next year. If at the end of it the income drops below 150 million rubles and the number of employees is 100 people, the right to regular simplified tax rates will return.

Note! The transition period has not yet been introduced - the bill is at the discussion stage and is being prepared for consideration by the Cabinet of Ministers of the Russian Federation.