In 2021, all debts on taxes and insurance premiums will be written off from individual entrepreneurs

What is written off during an amnesty: taxes or contributions?

They have been talking about an amnesty for individual entrepreneurs on contributions to the Pension Fund and taxes for the second year now.
Individual entrepreneurs have the opportunity to get rid of debts on payments to the budget and extra-budgetary funds thanks to the Law “On Amendments...” dated December 28, 2017 No. 436-FZ. This law allows amnesty of debt not only for individual entrepreneurs, but also for other categories of persons (companies, ordinary citizens - not individual entrepreneurs, private practitioners). For each group of persons, the law provides for different conditions for granting tax amnesty based on the timing of debt formation and their types. What individual entrepreneurs are written off under the tax amnesty, see below:

Law No. 436-FZ for individual entrepreneurs provides for an amnesty for both tax debt and insurance premiums. At the same time, individual entrepreneurs should not forget that timely payment of taxes is the main responsibility of the taxpayer. Forgiveness of tax debts is a one-time government measure aimed at supporting business.

Who is eligible for tax amnesty?

The tax amnesty does not apply to legal entities. Groups of citizens whose debts are subject to write-off are specified in the current Federal Law No. 436-FZ. They are as follows:

• individuals who have debts to pay transport, land tax, property tax (all amounts that arose by January 1, 2015 are taken into account, including penalties that arose due to non-payment of mandatory fees);
• Individual entrepreneurs and individuals who were in the past individual entrepreneurs, but for certain reasons moved away from business (all debts are subject to write-off, including penalties and fines that arose before January 1, 2015 due to non-payment of taxes, with the exception of some of them) ;
• business entities, former individual entrepreneurs, notaries, lawyers, other privately practicing individuals (the entire amount of debt incurred for insurance premiums before January 1, 2021, fines and penalties that arose due to their late payment are written off, provided that the amount of insurance premiums contributions were calculated eightfold).

All interested citizens can find out detailed information about arrears and the procedure for writing off debts through the website of the Federal Tax Service, having one of the following access options:

• qualified electronic signature;
• registration card for entering your personal account (to receive it you need to register on the Federal Tax Service website);
• account on the State Services portal.

Debt write-off amount

The main feature of the amnesty for individual entrepreneurs in 2021 is that the maximum and minimum amounts of taxes are not limited to specific indicators. All arrears incurred for the period established by law will be written off. So, let’s say an individual or individual entrepreneur has a debt in the amount of 240 thousand rubles. In addition, for late mandatory payments he was assessed fines and penalties of 23 thousand rubles. The citizen’s total debt to the budget is 263 thousand rubles. This entire amount is subject to write-off.

For what period of time was amnesty declared for individual entrepreneurs?

Federal Law No. 436-FZ, adopted on December 28, 2021, clearly defines the specific time frame during which the debts of individual entrepreneurs and individuals will be written off. The amnesty applies to the following types of debt:

• unpaid insurance contributions to the Pension Fund of the Russian Federation (PFR), penalties and fines on them, generated before January 1, 2021;
• debts on mandatory tax contributions incurred by individuals or entrepreneurs under the simplified tax system, OSNO, PSN and other taxation systems as of January 1, 2015.

What debts will be written off for individual entrepreneurs in 2019

The amnesty in 2021 involves writing off bad debts that arise due to the fact that a citizen does not fulfill his obligations to pay taxes and fees provided for by the legislation of the Russian Federation. These include:

• property tax debts, fines and penalties,
• debts on mandatory fees associated with doing business, with the exception of mineral extraction tax, excise taxes, taxes on export and import transactions, penalties and fines.

Debts on insurance premiums to the Pension Fund for the period before January 1, 2021 are subject to write-off only if insurance premiums were calculated using the following formula:

• C = 8 × minimum wage × T × H, where: the minimum wage is the value of the minimum wage that is in effect in a certain tax period, C is the amount by which the individual entrepreneur’s debt to the budget will be reduced, H is the number of months of doing business, T is the insurance premium rate.

Failure to pay the following types of mandatory contributions can lead to the formation of a bad debt:

1. For individuals:

• transport (every citizen to whom the vehicle is registered is obliged to pay this fee);
• on property (levied on all owners of real estate without exception, which is considered an object of taxation and is located on the territory of the Russian Federation);
• land (this fee is levied on land plots owned or owned by the right of perpetual use).

2. For individual entrepreneurs:

• depending on the fiscal regime used.

The reasons for the formation of bad debt are as follows:

• the entrepreneur does not have the material or financial capabilities to repay the arrears in full;
• declaring an individual entrepreneur bankrupt;
• the bailiffs issued a decision to end the enforcement proceedings;
• an individual is excluded from the Unified State Register of Individual Entrepreneurs;
• the statute of limitations has expired;
• liquidation of a company or organization;
• the death of the debtor has occurred;
• the individual is deprived of his liberty.

Taxes subject to write-off in all taxation systems

Individual entrepreneurs in Russia use one of five fiscal regimes. The types and number of fees directly depend on which system is used. The table shows the entire list of mandatory payments that a taxpayer, under a certain fiscal regime, undertakes to pay to the budget:

The tax amnesty in 2021 involves the complete write-off of individual entrepreneurs' debts arising as a result of non-payment of listed taxes on the date specified in federal law. In addition, businessmen are exempt from paying fines and penalties that will be assessed for late and unfulfilled obligations. There are no conditions regarding the amount of debt. The Federal Tax Service undertakes to automatically cancel the entire amount of debt incurred by the entrepreneur before January 1, 2015.

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Amnesty on insurance premiums for individual entrepreneurs

If an individual entrepreneur’s debt to the state arose due to non-payment of contributions to the Pension Fund and the Social Insurance Fund, then the tax office will write it off, but for the period before January 1, 2021. Fines calculated for non-payment of mandatory contributions to the budget are also subject to write-off. Only those entrepreneurs who did not conduct business activities and did not submit reports to the tax office can count on a tax amnesty on contributions. Under such conditions, mandatory fees were calculated to the maximum extent in accordance with the laws on compulsory insurance.

To calculate the amount of contributions for individual entrepreneurs if they do not provide data to the Federal Tax Service of the Russian Federation, the Pension Fund uses the following formula: 8 minimum wage x 26% (insurance premium rate) x 12 (number of months in a year). In this case, the amount of the mandatory payment may exceed 154 thousand rubles per year. The tax amnesty will help ease the financial burden of a businessman. If contributions were paid before 2021, and reports were submitted to the tax service on time, but one or more mandatory payments were missed, then insurance debts from individual entrepreneurs will not be written off.

Will individual entrepreneurs forgive debts on insurance premiums for injuries, as well as excise taxes and mineral extraction tax?

The tax amnesty for individual entrepreneurs does not include debt on excise taxes, mineral extraction tax and taxes payable when moving goods across the border.

Legislators also did not include insurance premiums for injuries on the list of amnestied debts. Only contributions accrued in accordance with the Law “On Insurance Contributions...” dated July 24, 2009 No. 212-FZ (currently not in force) are subject to write-off. Contributions paid by insurers as part of insurance against industrial accidents and occupational diseases (“injuries”) are regulated by another law - “On compulsory social insurance...” dated July 24, 1998 No. 125-FZ.

Nevertheless, the individual entrepreneur was luckier than others. Among the debts subject to amnesty are both overdue tax obligations and contributions, as well as penalties and fines accrued on these amounts. Companies and private practitioners are less fortunate - they cannot count on having their tax debts written off.

If OKVED IP or LLC falls into the list of affected activities, then all taxes and contributions for the second quarter of 2020 will be written off, with some exceptions. For the list of debited payments, see the typical situation from ConsultantPlus. If you do not have access to the K+ system, get a trial online access for free.

Is it possible to write off the debts of an individual entrepreneur?

Yes, it's possible. Depending on the size and duration of unfulfilled obligations, this may be an administrative procedure for writing off or a judicial procedure through bankruptcy.

For example, overdue taxes and contributions older than 5 years are written off by the tax authorities. The fiscal amnesty allows you to write off old debts without a statement, and all formalities are required to be completed by the tax office. In order to completely get rid of debts to banks, microfinance organizations and suppliers through bankruptcy, the individual entrepreneur must confirm the signs of insolvency. We will describe all the methods below.

Which entrepreneurs have their tax debts and contributions to the Pension Fund written off?

Tax amnesty 2021 for individual entrepreneurs is a legal opportunity to get rid of “old” debts for entrepreneurs:

• currently in force;
• who ceased their business activities, but had arrears in contributions and taxes as of a certain date.

The amnesty affects the debt of individual entrepreneurs, which is registered with them as follows:

• as of 01/01/2015 - for taxes;
• 01/01/2017 - for contributions.

This means that debts under the specified obligations of the individual entrepreneur that arose after the deadlines mentioned above are subject to payment. This applies equally to both working entrepreneurs and those who have lost their individual entrepreneur status.

The procedure and timing of the amnesty for the debts of individual entrepreneurs

Amnesty for individual entrepreneurs' debts began in 2021. The law establishes a simple mechanism for writing off debts. This should be done by tax authorities at the place of residence of the debtor entrepreneur. The law does not oblige the individual entrepreneur to perform any actions.

The deadlines for carrying out the procedure for writing off debts are not established by law, and this event may drag on indefinitely. Therefore, if an individual entrepreneur is interested in writing off debt as quickly as possible within the framework of a tax amnesty, he will still have to participate in this process. Namely, on your own initiative, reconcile existing debt with controllers.

It wouldn’t hurt to inquire at the tax office about the existence of tax and insurance debts that are eligible for the amnesty. If such amounts are discovered, it is better not to leave the process of writing them off without control. Despite the fact that Law No. 436-FZ does not provide for any obligations in the tax amnesty procedure for individual entrepreneurs, write a statement in free form and submit it to the inspectors. In the application, state your request to write off debts within the framework of Law No. 436-FZ.

The Federal Tax Service recommends obtaining information about the amount of debt written off through the “Personal Account of Taxpayer-Individual Entrepreneur” service. If such information is not currently available in your personal account, please contact the tax office directly to clarify the information.

Find out more about the tax amnesty on our forum.

Options for writing off entrepreneurial debts

Freeing an individual entrepreneur from debt means that his creditors will not receive money. Therefore, it is difficult to imagine that an entrepreneur would have his debts forgiven without any conditions. This is possible within the framework of the tax amnesty that the state has been implementing since 2021.

Tax amnesty

Law No. 436 amended the Tax Code of the Russian Federation to allow getting rid of old tax debts. Here's the gist of this program:

• for taxes of individuals and individual entrepreneurs that arose before 2015, the Federal Tax Service will write off debts if they were not collected through the court;
• in the same way, arrears on insurance premiums that arose before 2017 are written off;
• no need to submit an application and confirm the delay, the Federal Tax Service will do everything on its own.

The purpose of the program is obvious. If the tax inspectorate can no longer collect a bad and outdated debt, there is no point in reflecting it in documents and programs, or spending public money on sending demands and letters.

The fiscal amnesty applies not only to closed individual entrepreneurs, but also to existing individual entrepreneurs and individuals.

Bankruptcy

Bankruptcy can be used not only by an individual, but also by an existing entrepreneur. After completing the bankruptcy case, the individual entrepreneur will be deregistered with the Federal Tax Service, all his licenses and permits will be canceled, and his debts will be written off - both business and personal consumer.

To write off debts, you will have to go through a property sale procedure, where the property can be sold

• involved in business activities, for example, equipment, trademark;
• personal: car, parking space, part of the real estate except the only home.

After completion of the bankruptcy procedure, all debts of the entrepreneur will be written off

Read more about the sale of property in this article.

Expiration of the statute of limitations

You can forget about debts if the creditor misses the statute of limitations for collection. According to the Civil Code of the Russian Federation, judicial collection is carried out within three years. This period is counted from the moment of violation of the obligation. But there are a number of nuances for applying the consequences for missing the statute of limitations:

• if the creditor files a claim for an overdue debt, and the defendant does not declare a missed deadline, the court will confirm the debt and issue a writ of execution or order;
• if, after the expiration of the statute of limitations, the defaulter signs an acknowledgment of debt, a reconciliation act or another similar document, the three years for collection will begin to flow again;
• even after the statute of limitations has expired, the creditor may use other means of influence (for example, banks often sell outdated debts to collectors).

Since the creditor is interested in repaying the debt, you should not count on missing the statute of limitations.

If there is already a decision or court order that has entered into force regarding the debt, the consequences of missing the statute of limitations cannot be applied.

Other grounds for writing off debts

An entrepreneur can get rid of debt in other ways, although they are used quite rarely:

• forgiveness of individual entrepreneur's debts by creditors - in this case, obligations are terminated without any compensation. It happens that it is more profitable for a counterparty to forgive a small debt and carry on with business;
• compensation, that is, the transfer of property for repayment, according to a written agreement with the creditor;
• transfer of debt to another person (this also requires the consent of the creditor).

We did not include debt write-off due to death in this list, since it is unlikely to suit an individual entrepreneur or individual.

Refinancing or restructuring will get rid of part of the debt if you reach an agreement with banks, creditors, and collectors.

Can an individual entrepreneur get rid of unaffordable debts?

The best way to write off the debts of an individual entrepreneur is through bankruptcy proceedings.

Law No. 436-FZ and the Ministry of Finance on writing off debts of individual entrepreneurs on contributions to the Pension Fund

The tax amnesty for individual entrepreneurs on insurance premiums provides for the following (Article 11 of Law No. 436-FZ):

The decision to write off arrears, penalties and fines is drawn up in any form and must contain the full name, TIN of the entrepreneur, and the amount of contributions to be written off.

Officials of the Ministry of Finance explained additional conditions for recognizing debt on contributions as bad and subject to write-off - the amnesty also applies to individual entrepreneurs’ contributions for themselves, accrued based on the maximum amount (8 minimum wages), for which the entrepreneur did not report (letter dated January 26, 2018 No. 03-11 -11/4394).

You will find the formula for calculating the insurance obligations of individual entrepreneurs in the material “Insurance premiums for the year - what amount to pay.”

How to initiate bankruptcy so that individual entrepreneurs have their debts written off

To declare oneself financially insolvent, an entrepreneur must collect the relevant documents to submit to the court:

• certificates from the unified state registrar of individual entrepreneurs (USRIP) and from the tax service (it is valid for only 5 days from the date of receipt);
• a detailed list of property (both the individual entrepreneur himself and that owned personally by an individual);
• a list of creditors that appeared both as a result of commercial activities and as a result of personal obligations of a citizen;
• documents confirming debts (supply agreements, provision of services, receipts, loan agreements and others);
• receipt for payment of state duty (300 rubles) and financial manager services (25 thousand rubles);
• information about open bank accounts with information about the amounts in them;
• current balance from accounting.

Based on the collected documents, an application for bankruptcy of the individual entrepreneur is written. It reflects all the information specified in the documentation proving the non-viability of the business, with a request to declare the individual entrepreneur bankrupt. The application must indicate the SRO from among whose participants the arbitration manager will be appointed.

Order a legal consultation

The application is submitted to the arbitration court in person, by mail, through the Arbitration Court website or with the help of a representative acting on the basis of a notarized power of attorney. After filing bankruptcy documents, interest, fines and penalties on debts cease to accrue.

After receiving the application, the court will set a date for the first court hearing. It will consider the feasibility of bankruptcy of an individual entrepreneur and select a financial manager. All necessary procedures will be carried out by him, since only the financial manager is an intermediary between the court, creditors and debtor.

The main goal of the financial manager is to balance the forces and maintain balance between the parties. In other words, satisfy the financial requests of creditors without infringing on the rights of the debtor. The individual entrepreneur bankruptcy procedure itself takes place in several stages.

Debt restructuring

Restructuring is used if it is possible to revive the enterprise and restore its operation. That is, the court will take the path “let’s give the individual entrepreneur one more chance” if it sees that the debtor’s financial situation is not completely hopeless.

As part of this procedure, a financial plan for overcoming the crisis is drawn up. This plan should be formed taking into account the interests of creditors and the capabilities of the debtor. Restructuring can take up to three years.

A prerequisite for such an agreement is the approval of the long-term plan by the debtor. The financial manager takes the necessary measures to overcome the crisis, notifies creditors, and holds joint meetings to resolve disagreements.

At the first meeting, all parties review the strategic restructuring plan. If the viability of this document is low, then the manager applies for a different solution, that is, bankruptcy of the individual entrepreneur.

Necessary conditions for introducing restructuring:

• the individual entrepreneur has a stable source of income;
• the owner of the individual entrepreneur has no criminal record for economic crimes (an expunged criminal record is allowed);
• absence of administrative penalties or offenses in a similar area;
• bankruptcy of an individual entrepreneur is not fictitious or intentional.

The restructuring plan being formed includes a prorated payment method. During the process, the manager controls the following issues:

1. Information about the status of the current accounts of the debtor-individual entrepreneur and its owner, movement on them.
2. Amounts of deposits and cash balances on them, officially registered both for individual entrepreneurs and individuals.
3. Information about the debtor's property and transactions with it.

The financial manager in case of bankruptcy of an individual entrepreneur also periodically holds meetings of creditors, analyzes the current affairs and financial situation of the debtor, and analyzes previously completed transactions.

The main task during restructuring is the fulfillment by the debtor-entrepreneur of his obligations on time according to the established plan.

The manager monitors the debtor’s solvency throughout the restructuring period. If the conditions are not met, then the procedure is canceled and the following one is introduced - the sale of the debtor’s property.

But in practice, debt restructuring is an unnecessary procedure that only delays the entrepreneur’s bankruptcy and increases the amount of expenses. To skip it, the applicant only needs to submit a corresponding request when filing an application or during the first court hearing.

Property sale procedure

The sale of property is carried out much more often than the restructuring of individual entrepreneurs’ debts. When a private business is in a hopeless situation, then selling property to pay off debts and finally write them off is the best way out.

The financial manager is also involved in the implementation procedure. The debtor's movable and immovable property, whether owned by him in full or as part of an equity participation, is subject to sale. Not up for auction:

• the only housing, with the exception of the one that is mortgaged or pledged;
• personal belongings, pets and livestock;
• equipment for the disabled;
• awards and prizes;
• food and fuel;
• equipment necessary for commercial activities (if their cost does not exceed 100 minimum wages).

The financial manager engages an independent expert to evaluate the property. If the parties do not agree with the assessment, then the creditors or the owner of the individual entrepreneur himself has the right to attract his own expert, paying for his services from his own funds.

Next, trades or auctions are organized to sell the debtor’s assets. The manager conducts a full assessment and inventory of all the bankrupt’s property, draws up a long-term implementation plan and approves it in the arbitration court. After the sale of property, funds are distributed in the following order:

1. Alimony, manager's remuneration, payment for the services of third-party specialists.
2. Salaries for employees, severance pay.
3. Payment of utilities, repair fees, loan payments and obligations to counterparties.
4. Other expenses, including current payments.

Even if after the sale of the property the debt is not fully repaid, the court releases the entrepreneur from his obligations. If the manager has not sold individual rights or things, and the creditor has no claims to them, then after the end of the legal proceedings they are returned to the use of the debtor.

Expensive personal belongings of an entrepreneur-citizen, as well as assets related to the financial activities of the individual entrepreneur and citizen, are also subject to sale at auction.

You can write off the debts of an individual entrepreneur through declaring him bankrupt

To do this, you need to prove to the court that your idea to create your own business turned out to be unviable. But you go bankrupt not because of the malicious intent of “taking out a loan with the goal of not paying it back,” but because of a drop in demand for your goods or services. They wanted to work for themselves, but didn’t dare.

Alternative to bankruptcy: settlement agreement

A settlement agreement is the shortest and most beneficial way out of the situation for all parties. It is relevant if the debtor is able to assume all obligations and repay debts to creditors, without resorting to a debt restructuring procedure. A settlement agreement is usually concluded in the following cases:

• when the individual entrepreneur restores the ability to pay debts;
• upon full payment of the debt by the entrepreneur;
• if creditors wish to waive claims;
• when drawing up a payment schedule to pay off debts.

The settlement agreement will be a solution for the businessman, since it restores all the rights of the entrepreneur to dispose of property. When choosing this solution, the arbitration court does not interfere in the further activities of the individual entrepreneur.

The nuances of bankruptcy of an entrepreneur through court

The positive aspects of selling property are:

• writing off existing debts of individual entrepreneurs;
• the ability to travel outside the country (at the time of bankruptcy, the court often imposes a travel ban; a similar ban is also imposed by bailiffs as part of enforcement proceedings);
• the possibility of further registration of property as the personal property of an individual;
• lack of regular communication with intrusive creditors, collectors and bailiffs;
• restoration of control over the remaining property.

However, it is important to consider all the consequences of bankruptcy of an individual entrepreneur:

• first of all, the threat of implementation extends to the assets of the entrepreneur and the personal property of the citizen;
• until the end of the judicial proceedings, a ban on leaving the country is possible;
• The individual entrepreneur will be liquidated, and all licenses, permits, certificates and patents issued to the entrepreneur will also be cancelled;
• an individual entrepreneur does not have the right to re-register an individual entrepreneur with the tax authority for five years from the date of the court decision.

It is important to take into account that in case of bankruptcy of an individual, a ban on re-registration of an individual entrepreneur is not imposed. Lawyers recommend closing the individual entrepreneur and only then going bankrupt as an individual. face.

Are debts submitted for collection forgiven?

Individual entrepreneurs have the right to count on the write-off of those debts within the framework of the tax amnesty for which collection procedures have been initiated and interim measures have been taken. It doesn’t matter that the documents on these debts have already been transferred to bailiffs, courts or banks - the debts must still be written off.

The Federal Tax Service issued a special letter on this matter, in which it deciphered the actions of the inspectors (letter of the Federal Tax Service of Russia dated April 16, 2018 No. KCH-4-8/71146). After a decision is made to write off the debts of an individual entrepreneur as part of a tax amnesty, controllers are obliged to:

• revoke the order to write off the debt from the individual entrepreneur’s accounts;
• cancel the decision to suspend transactions on individual entrepreneur accounts;
• inform the bailiffs of the information from the decision made to cancel the decision to collect the tax or notify them of the updated amount of the debt (if the debt is partially written off).

We describe the method of obtaining information about tax debts, the collection of which is at the stage of enforcement proceedings, in the material “How to find out tax debts.”

Results

Tax amnesty for individual entrepreneurs - 2021 allows you to get rid of old debt not only for taxes, but also for insurance premiums.
Debts are written off without the participation of the entrepreneur by the tax authority at his place of residence. An individual entrepreneur can speed up this process by initiating a reconciliation with controllers and submitting an application to them with a request to write off debts as part of the amnesty. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.