Deadline for submitting an application to switch to the simplified tax system from 2021

Advantages of the simplified tax system

The most important benefit of the simplified taxation system is the low tax rate. It depends on the chosen object of taxation:

• 6% for simplified taxation system Income;
• from 5% to 15% for simplified taxation system Income minus expenses.

This is significantly lower than the rates in force in the general taxation system:

• up to 20% on income tax for organizations or 13% personal income tax for individual entrepreneurs;
• up to 18% (and from 2021 to 20%) for value added tax.

In addition, if the tax object “Income” is selected, then the calculated tax is reduced by the amount of insurance premiums paid. Moreover, individual entrepreneurs without employees can take into account the entire amount of contributions for themselves, and employers can reduce the tax payment by no more than 50%.

You can find specific examples of how advance tax payments and the single tax on the simplified tax system are reduced here.

Another special feature of the simplified taxation system is that only one annual declaration is submitted. And if the object of taxation is “Income”, then you can handle the accounting yourself, without an accountant.

Naturally, the state does not provide such preferential conditions to all taxpayers, but only to those who can be classified as small businesses. The conditions established for the transition to the simplified tax system in 2021 are indicated in the article of the Tax Code of the Russian Federation.

Advantages of switching to simplified tax system

Legal entities, as well as individual entrepreneurs who are at the very beginning of their business activities, can choose one of two tax system options: a general system or a simplified one.

A simplified taxation system is a tax regime that implies a special procedure for paying taxes to the state budget. This system is aimed mainly at representatives of small and medium-sized businesses.

The simplified system has a number of advantages over the general taxation system. In this case, the Tax Code of the Russian Federation allows us to significantly reduce the tax burden, which greatly simplifies the preparation and submission of reports to the Federal Tax Service.

It is very beneficial to use this mode for small industries. In this case, the company will receive the following benefits:

1. Less load. Companies do not need to transfer such (for many, very unaffordable) payments as VAT, property tax (there are exceptions - see paragraph 2 of Article 346.11 of the Tax Code of the Russian Federation), and the income tax turns out to be less.
2. Selecting an object of taxation (“income” or “income minus expenses”), which allows you to adapt the fiscal burden to the indicators of your economic activity. Even if the company made a mistake in its choice, it can later switch to the second type and change the object of taxation; this can be done at the beginning of the next calendar year.
3. Tax rates are not so high, 6 and 15% respectively. According to Art. 346.20 of the Tax Code of the Russian Federation, regional authorities can make these rates even lower. And the subjects of the Russian Federation actively use these powers (in Moscow, for example, for companies using the “income minus expenses” scheme, a rate of 10% is provided - Moscow Law No. 41 dated October 7, 2009).
4. If during the period of application of the “simplified tax” fixed assets (FPE) and intangible assets (IMA) are acquired, during the year their cost is included in expenses (clauses 1 and 2 of clause 3 of Article 346.16 of the Tax Code of the Russian Federation).
5. Companies keep tax records in a ledger for accounting income and expenses, which is easy to fill out and does not need to be certified by the Federal Tax Service. The tax return is submitted “simplified” only at the end of the calendar year. And when choosing the object of taxation “income”, you can handle the accounting yourself, without an accountant.

The Russian government provides such benefits only to those merchants whose activities are classified as small businesses.

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Who can work on the simplified system

Conditions and new criteria for choosing a simplified taxation system are established annually. True, in the last couple of years a certain stability has been established in this sense, i.e. The requirements for simplified taxation system payers do not change fundamentally.

The criteria for applying simplified taxation are specified in Chapter 26.2 of the Tax Code:

• the average number of employees is no more than 100 people;
• the taxpayer does not have the right to engage in certain types of activities (for example, banking and insurance, pawnshops, mining, except for common ones, etc.);
• annual income should not exceed 150 million rubles (a few years ago the limit was only 60 million rubles);
• the organization has no branches;
• income received by an existing business for 9 months of the current year when switching from OSNO to simplified tax system from 2021 cannot exceed 112.5 million rubles;
• the residual value of fixed assets does not exceed 150 million rubles (until 2021, the limit was set at 100 million rubles).

Regarding the latter condition, the Federal Tax Service recently expressed an ambiguous opinion. The fact is that in subclause 16 of clause 3 of Article 346.12 of the Tax Code of the Russian Federation, the limit on the residual value of fixed assets is indicated only for organizations. Accordingly, individual entrepreneurs did not comply with this limit and made the transition from the OSNO to the simplified tax system, even having fixed assets for a large amount.

However, in a letter dated October 19, 2021 No. SD-3-3 / [email protected] , the Federal Tax Service noted that in order to be able to switch from OSNO to the simplified tax system, the limit on fixed assets must be observed not only by organizations, but also by individual entrepreneurs. Moreover, this conclusion of the tax authorities is supported by judicial acts, including decisions of the Supreme Court.

In addition, the Ministry of Finance has established new income and employee limits for simplified tax payers from 2021. However, those who will earn more than 150 million rubles and employ more than 100 people will be required to pay tax at a higher rate: 8% for the simplified tax system for Income and 20% for the simplified tax system for Income minus expenses.

But, of course, the majority of newly registered LLCs easily fit into the simplified limits on income and number of employees. This means they have the right to switch to a preferential regime and pay taxes at a minimum.

Refusal to apply the simplified tax system

Refusal after the fact . As practice shows, the presence of a written notification from the tax authority about the right to apply the simplified tax system does not always protect the taxpayer from subsequent claims by inspectors. In some cases, tax authorities declare that the use of a taxation system previously approved by them is unjustified. In this case, you should defend your case in court. The Federal Arbitration Court of the East Siberian District, considering such a claim (Resolution dated March 12, 2009 N A33-1275/08-F02-874/09), took into account the following facts: - from the moment of registration in this capacity, the entrepreneur submitted declarations to the tax office on a single tax; — the tax inspectorate has not provided evidence that the entrepreneur for a number of years belonged to taxpayers who do not have the right to use the simplified tax system; — the case materials confirm that the entrepreneur received a notification from the tax inspectorate about the possibility of applying the simplified tax system. Refusal due to the taxpayer's non-compliance with legally established criteria . It happens that the tax authority mistakenly gives permission to apply the simplified tax system, despite the fact that the business entity does not have legal grounds to apply this taxation system. The taxpayer, having made a mistake in good faith, applies the simplified tax system. But after some, often long, time, the tax authority suddenly discovers that it issued the permit incorrectly and demands payment of taxes under the general taxation system with huge fines. The courts do not have a uniform approach to such situations. For example, the Federal Antimonopoly Service of the Volga District, in its Resolution dated July 17, 2008 in case No. A57-210/08-33, recognized the demands of the tax inspectorate as unfounded, since in this case the actions of the tax authority itself led to the use of the simplified tax system by the taxpayer. The Federal Arbitration Court of the North-Western District, in its Resolution dated 05/07/2010 in case No. A42-8932/2009, proceeded from the opposite. The court indicated that, due to the prohibition established by the Tax Code of the Russian Federation, the organization did not have the right to apply the simplified tax system in the disputed period. The right to use the simplified tax system is related to the taxpayer’s compliance with the requirements specified in Art. 346.12 of the Tax Code of the Russian Federation, and not with the fact of sending a notification by the tax inspectorate. In addition, the notification of the tax authority about the transition to the simplified tax system does not have the nature of an explanation on the application of tax legislation. Refusal on grounds not provided for by law . Initially, we will stipulate that the tax authority does not have the right to refuse the transition to the simplified tax system on grounds other than those provided for in Chapter. 26.2 Tax Code of the Russian Federation. Let's imagine a situation: an enterprise decided to switch to the simplified tax system and submitted a corresponding application to the tax authority on February 15, and on March 3 received a refusal from the tax authority on its application. The reason for the refusal was the presence of a personal income tax debt to the budget in the amount of 6 rubles. In this situation, the tax authority did not have the right to refuse the transition to a simplified system on this basis, since this is not provided for in Chapter. 26.2 Tax Code of the Russian Federation.

When can you switch to simplified work?

Many aspiring businessmen know that small businesses in Russia have the right to operate at reduced tax rates. And the choice of a preferential tax system often occurs even before documents for business registration are submitted to the Federal Tax Service.

If you have not yet decided on the tax system or are in doubt about your choice, we recommend that you contact us for a free consultation.

Free tax consultation

So, if you have already decided that you want to work on a simplified system, but have not yet submitted documents for registration of an individual entrepreneur or LLC, then together with them you can submit an application for the simplified tax system. And even if registration with the Federal Tax Service has already taken place, but no more than 30 days have passed since that date, then you still have time for the transition.

How to switch to the simplified tax system if you did not know about this possibility, so you ended up on the general taxation system (OSNO)? Unfortunately, the opportunity to transfer for an existing business is only available once a year.

To formalize the transition from OSNO to simplified tax system, you must submit a notification before December 31. Then you will be able to apply the simplified version from January 1, 2022. But, of course, provided that you comply with the limits of income, employees, fixed assets and do not violate other established requirements.

Create an application for the simplified tax system for free

And another procedure for switching to a simplified tax regime was provided for UTII payers. If in the middle of the year they stop the type of activity for which they pay tax on imputed income, then they have the right to switch to the simplified tax system in another line of business without waiting for January 1. In this case, the application can be submitted within 30 days from the date of deregistration as a UTII payer. However, you cannot simply switch from imputation to the simplified tax system for the same type of activity in the middle of the year.

For clarity, we have collected the timing of the transition to the simplified tax system in different situations in a table.

How to report the transition to a simplified mode

The transition to the simplified tax system is of a notification nature. This means that if you meet the conditions listed above, then you simply need to notify the Federal Tax Service of your choice of a simplified regime. To do this, an application in form 26.2-1 is submitted to the tax office where the individual entrepreneur or LLC is registered with the tax authorities. We have already discussed the deadlines for submitting notifications in the table.

Form 26.2-1 was approved by Order of the Federal Tax Service of Russia dated November 2, 2012 N ММВ-7-3/ [email protected] , but continues to be valid now. Filling out the application is very simple, and if you fill out documents for registering an individual entrepreneur or LLC in our service, it will be prepared automatically.

We also advise you to read the detailed instructions for filling out an application for a simplified regime.

The tax office does not document the transition to a simplified regime. Typically, proof of this is the Federal Tax Service stamp on the second copy of the notification. But for greater confidence, you can request an information letter from the tax authorities in form 26.2-7. This document confirms that the taxpayer actually submitted a notice of transfer and submits returns under the simplified tax system.