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That is why so much attention is paid to the choice of tax regime. Which tax regime should an individual entrepreneur choose in 2020?
In Russia, a lot of attention is paid to the development of small and medium-sized businesses. For this purpose, entrepreneurs are given the right to choose the optimal business organization.
This is expressed in the absence of a single tax rate for businessmen. Which taxation system is most beneficial for individual entrepreneurs in 2020, and how to choose the appropriate regime?
Key Aspects
The most common question from novice businessmen is “I’m opening an individual entrepreneur, which tax system should I choose?” It is advisable to select a mode at the registration stage.
Initially, you should explore all available options, taking into account the specifics of the activity. It is necessary to familiarize yourself with all the limitations, pros and cons of each tax system.
Otherwise, the entrepreneur will have to face increased tax payments, which will offset all the benefits from the business.
Changing your tax regime is not always easy. Some modes are available for use only from the next calendar year.
Other options allow transitions at any time. In certain cases, it is possible to combine modes.
If an individual entrepreneur did not bother choosing a regime during registration, then by default he is registered for tax purposes as a taxpayer according to.
The general regime does not imply restrictions on types of activities, number of employees and other criteria.
But you will need to pay all taxes without exceptions and maintain strict reporting. Often it is the wrong choice of taxation that leads to the closure of a business.
What you need to know
An individual entrepreneur is an individual who has the right to conduct business activities and receive systematic income.
Entrepreneurship means conducting any non-prohibited business at your own peril and risk. An individual's ordinary income is taxed at the standard rate of 13%.
Taxation of formal businesses allows for lower tax rates. It is important to know that there is no such thing as a “tax rate for individual entrepreneurs”.
Taxation of an entrepreneur depends entirely on the chosen regime. In this case, the tax is calculated taking into account the type of activity, volume of income, number of employees, etc.
What are the types
Choosing a mode requires no less attention than choosing housing for ordinary housing. The difference is that changing the regime is sometimes more difficult.
Taxes under the chosen system will be paid over more than one day. And if you make the wrong choice, you will have to suffer considerable losses until the opportunity to change the regime arises.
In Russia, as of 2020, there are five tax regimes available to individual entrepreneurs. This:
The main mode is considered to be OSNO. The absence of restrictions allows it to be used by any individual entrepreneur in any area of business.
Other systems belong to the category of special modes. The specificity is expressed in the conditions of application and requirements for the taxpayer.
The main criteria by which the check for the possibility of using a special regime is carried out are:
- Kind of activity;
- amount of income;
- number of employees.
How does the transition from one mode to another occur? The rules for changing the tax system are somewhat different:
| BASIC | In this case, special registration is not required. When registering, an entrepreneur is subject to general taxation unless he or she declares a desire to use a different regime. |
| simplified tax system | It is allowed to register an individual entrepreneur under a simplified regime immediately upon initial application or within a month after receiving the registration certificate. In other cases, the transition to the simplified tax system is possible only from the beginning of the new year |
| UTII | Registration is carried out as in the simplified mode. The transition is possible at any time with notification to the Federal Tax Service within five days from the date of actual application |
| PSN | You can initially register a patent. To switch, you need to contact the tax office ten days before the start of use. |
| Unified agricultural tax | As a rule, this mode is selected initially, since it is intended for a limited range of activities |
Important! After switching to a different regime, the individual entrepreneur is not automatically deregistered from the previous taxation system. You need to contact the tax authorities with a corresponding request.
Otherwise, there will be a combination of regimes, which will require a report on each of them and, accordingly, payment of taxes.
The legislative framework
The Russian tax system for individual entrepreneurs provides one main system and four special regimes. The general taxation system (GTS) is provided for -.
It consists of local, regional and federal taxes. The system is applied automatically if the taxpayer has not chosen a special regime.
The main differences are the highest tax burden and the volume of reporting. OSNO is available to absolutely all individual entrepreneurs. Special regimes imply more favorable taxation.
But special conditions for use must be observed. Special tax regimes are regulated by the following standards:
Each of the special regimes involves the payment of a special tax, which replaces some OSNO taxes.
Moreover, under any regime, employers are expected to pay insurance premiums for their employees. Individual entrepreneurs pay similar fees for themselves.
Which tax system to choose when registering an individual entrepreneur
The choice of tax regime is carried out in two stages:
There is no universal way to determine the optimal mode. It is not always possible to analyze the structure of revenue, especially at the beginning of activity, when there is no revenue yet.
Meanwhile, such regimes as patent and imputation involve levying a tax on a predetermined amount. And it is not a fact that the individual entrepreneur will be able to achieve the required income.
If the business is relatively established and the results are consistently high, then it is more advisable to choose an inflexible tax, since the increase in profit above the imputed income will not be taxed.
After performing the calculations and comparing the results, it is necessary to pay attention to the existing limitations.
The general regime is allowed for use by all entrepreneurs without exception. But this system is often unprofitable for individual entrepreneurs.
There are special regimes for small businesses. They allow you to reduce the tax burden, which is especially important when starting a business.
At the same time, the legislator provided for the possibility of manipulation of tax regimes in relation to the time factor.
This means that it will not be possible to change the selected system at any time at the individual’s request.
BASIC
In a technical sense, OSNO is the most complex tax process. An entrepreneur will need to have accounting skills and knowledge or have an appropriate specialist on staff.
The list of reporting documentation is quite extensive and includes:
Also included in reporting under the general taxation regime are:
- accounting and according to which VAT is calculated;
- personnel book;
- reporting for personnel;
- reporting on insurance premiums.
There are also quite a lot of taxes on OSNO:
Depending on the type of activity and the specifics of the work, additional taxes may be required. For example, water taxes, contributions for employees, etc.
But OSNO also has its advantages against the backdrop of such strict requirements. In particular, there are no restrictions on the volume of profit and the number of employees.
In addition, individual entrepreneurs choose OSNO for the reason of paying VAT, if they plan to cooperate with organizations that can declare VAT deductible.
simplified tax system
Under the simplified taxation regime, personal income tax, VAT and property tax are not paid.
Tax payments are reduced to the payment of a single tax, depending on the selected simplified tax system option:
The tax base is chosen by the entrepreneur himself. When expenses are limited, the “income” mode is optimal.
When costs exceed 60% of the profit received, it is better to prefer “income minus expenses”. The single tax is paid once a year, and advance payments are made quarterly.
When using the simplified tax system of 6%, you can reduce the tax on the amount of insurance premiums. In some cases, it is possible to reduce the tax to 0.
The simplified tax system of 15% also allows you to reduce tax, but by assigning insurance premiums to the cost column. The simplified tax system is prohibited for use if:
- the number of employees exceeds 100 people;
- annual income more than 60 million rubles;
- Unified agricultural tax is applied;
- there are branches;
- The types of activities do not correspond.
The disadvantages of the simplified tax system include the mandatory requirement and the ban on the sale of goods subject to VAT.
UTII
When choosing UTII, a tax rate of 15% is paid not on actual income, but on imputed income.
The amount of potential profit is determined at the legislative level for each type of activity.
Individual entrepreneurs are exempt from paying personal income tax, VAT, property tax, and there is no need to use cash register machines. Tax can be reduced on insurance premiums, as well as on the simplified tax system.
Full accounting is not mandatory; it is enough to limit yourself to documents such as:
- tax return;
- reporting for employees;
- accounting of physical indicators;
- additional reporting.
The disadvantages of UTII are the restrictions on types of activities. For example, construction, manufacturing and wholesale trade are not compatible with UTII.
In addition, in some regions this regime does not apply (since 2020 it has been canceled in Moscow).
Exceeding the number of employees by more than one hundred people leads to the abolition of UTII. But the most important thing is that tax is paid even with actual losses.
PSN
For individual entrepreneurs, especially beginners, the patent system is the most understandable. Taxation comes down to paying for the cost of the patent.
Moreover, the validity period of the patent is chosen independently and ranges from one month to a year.
You can work without a cash register; you don’t need to keep reports. The real income of the entrepreneur does not matter.
This option is ideal for a temporary and seasonal business or when the individual entrepreneur is not sure of continuing the activity and wants to test the possibility of generating income.
PSN is similar to UTII, but the list of available activities has been expanded to include small-scale production.
The disadvantages of the patent system are the limitation on the number of employees (up to 15 people) and the amount of annual income (up to 60 million rubles).
Unified agricultural tax
A fairly favorable regime with a tax rate of 6%, calculated from the difference between income and expenses.
The declaration is submitted once a year, and the calculated tax is paid once every six months. But such preferential conditions are not available to everyone.
Only entrepreneurs engaged in the production of agricultural products or whose activities are related to fish farming are allowed to apply the Unified Agricultural Tax.
It is difficult for beginners in business to determine which taxation system will be optimal.
The step-by-step algorithm for choosing a tax regime for individual entrepreneurs includes the following steps:
- Determination of permitted activities for each mode.
- Studying the conditions for applying the regime and checking for compliance.
- Request to the Federal Tax Service about the possibility of applying specific regimes in a certain territory.
- Analysis of potential clients to check the percentage of income from VAT payers and check for the possibility of using/non-using cash registers.
- Calculation of the tax burden for each mode in order to select the lowest value.
Retail or wholesale
In wholesale trade, it is possible to combine OSNO and UTII or simplified tax system and UTII. The only condition for combining modes is separate accounting of business operations. For retail trade, UTII or simplified tax system are optimal.
The imputed tax was developed specifically for trade in beverages and food products in order to increase the convenience of calculations for taxes and fees.
The simplified tax system allows you to simplify the calculation and choose the appropriate option based on the amount of costs. When planning the choice of UTII, you need to take into account that for retail trade the tax is calculated based on the area of the retail premises.
When using large areas, the mode is not always beneficial. If, for example, an individual entrepreneur has a small cafe with a small hall, then UTII is ideal for him.
But a large store, even with a minimum number of goods, is absolutely unprofitable.
If the individual entrepreneur has a small number of employees or the complete absence of any, PSN is optimal. But here you need to take into account the likely income of the entrepreneur.
In addition, you need to clarify the cost of the patent, since the amount may differ in different regions. When trading is carried out through an online store, it is more advisable to work according to the simplified tax system.
Passenger cargo transportation
Engaging in cargo transportation allows an individual entrepreneur to choose OSNO, USN, UTII.
The optimal system is determined by calculating the profit margin. When income is significant, it is better to pay UTII, since in this case additional profit above potential income is not taxed.
When the income of an individual entrepreneur is not stable, characterized by seasonality and low profit, then the simplified tax system is most preferable, since the tax is paid on the actual income received.
OSNO is suitable for an individual entrepreneur who is engaged in passenger cargo transportation, having a large staff of employees and a large number of vehicles.
Video: taxes simplified tax system, UTII or OSN - Which taxation system to choose for an individual entrepreneur or LLC business
Freight transportation is often accompanied by other services in the transport sector. You can also run a business by repairing vehicles.
Which taxation system should I choose for a self-employed auto service? The provision of services allows you to use UTII with a consistently high income or PSN at the beginning of your activity.
Salon
Activities to provide household services to the population allow the use of UTII. This mode is most optimal for a hairdresser.
The calculation of the single tax is based on the number of employees. At the same time, the basic profitability for household services is 7,500 rubles per employee.
That is, the fewer employees an individual entrepreneur has, the lower the tax. Most hairdressing salons opened by individual entrepreneurs are characterized by a minimum.
Usually this is the individual entrepreneur himself and 2-3 other people. Another option for a small hairdresser could be a patent. This mode is often chosen by beginning entrepreneurs.
It is unlikely that a newly opened hairdressing salon will allow you to generate income above the maximum limit, but the cost of the patent will most likely more than cover it.
Beauty saloon
In addition, the salon usually has more staff than a regular hairdresser.
An individual entrepreneur opening a beauty salon can choose PSN or UTII if the requirements for the number of employees are met.
Among other things, it is worth taking a closer look at the 6% simplified tax system, especially when starting a business from scratch and having unstable income.
If, during registration and immediately after it, the individual entrepreneur does not take care of choosing a mode, then he will have to work on OSNO.
Other
Individual entrepreneurs can operate in different areas. For any type of activity, you can choose the optimal taxation system, taking into account the basic parameters of the business.
For example, you can consider the following types of activities:
| Production | Such activities require active cooperation with consumers and suppliers. For wholesale or medium-sized batches of products, it is important for buyers to have documents with accrued VAT. Therefore, the optimal choice is BASIC. If production is expressed in small volumes, then it is better to use the simplified tax system |
| Construction | The most common mode is the general mode. Since the cost of construction projects is high, the application of a simplified regime is impossible |
| Services | The choice here is quite simple, since any mode can be used. When providing services to the population, UTII is more often used. If services are provided to legal entities, then the simplified tax system is applied |
- Sergey Abramov
One of the most important questions when registering an individual entrepreneurship is the question of which taxation system to choose for an individual entrepreneur. Let us consider the systems that currently exist and are regulated by Russian tax legislation.
BASIC
The general tax system, or OSNO, is the “default” system. If the individual entrepreneur did not specify which tax system he wants to use during registration and registration, then OSNO begins to be used automatically. Entrepreneurs who work under OSNO keep full accounting records, including a ledger of income and expenses, and also pay all general taxes. These include value added tax (VAT), personal income tax and property tax.
simplified tax system
The simplified taxation system is a simplified taxation system. You can choose it voluntarily when registering an individual entrepreneur. It is necessary to notify the authorized division of the Federal Tax Service that the future entrepreneur has chosen the simplified tax system. In this way, the financial burden can be significantly reduced.
An entrepreneur who has chosen the simplified tax system is exempt from paying VAT and personal income tax, as well as from paying property tax. The single tax is paid by the entrepreneur once per annual quarter. In addition, a tax return is filed every year. In addition, you can reduce the total amount of tax paid by paying insurance premiums. For individual entrepreneurs with employees, the maximum percentage reduction is 50%. For those who do not hire workers, there is no such restriction, and individual entrepreneurs can pay significantly less taxes than under OSNO.
When deciding, you should make sure that the types of activities of the individual entrepreneur are not included in the special list of those types of activities for which choosing the simplified tax system is prohibited. This list is given in Article 346.26 of the Tax Code of the Russian Federation. In addition, there is a restriction on annual income: it should not be more than 60 million rubles multiplied by the deflator coefficient. In 2014, the target should be 67 million per year. If the amount of income is less, then you can safely choose the simplified tax system.
UTII
- This is a single tax on imputed income. If the simplified tax system is sometimes called simplified, then UTII is called imputation. Since 2013, UTII can be voluntarily selected if we are talking about those types of activities that are listed in paragraph 2 of Article 246.26 of the Tax Code. To work on the basis of UTII, you must register with the Federal Tax Service inspection, whose tasks include monitoring the territory of registration of individual entrepreneurs.
So, what is better – simplification or imputation? To answer this question, you need to understand how UTII is calculated. It is paid quarterly. The amount of tax depends on the basic income, and rates are set separately for each type of activity. In addition, actual indicators such as the number of employees, the area of the trading area, and so on play a role in the formation of the tax.
The calculation is adjusted taking into account special coefficients K1 and K2, and is also multiplied by a rate of 15%. UTII can also be reduced at the expense of insurance premiums - for individual entrepreneurs with employees, similar to the simplified tax system, a limit of 50% applies, for individual entrepreneurs without employees there is no such restriction.
In most cases, you don’t have to face a dilemma: simplified tax system or UTII - which is better for individual entrepreneurs. After all, UTII is used only for certain types of activities listed in the Tax Code. For other types of activities, you will have to choose OSNO, choose the simplified tax system (if possible) or, as an option, prefer the patent taxation system.
Patent taxation
It has become an equivalent option for individual entrepreneurs since the beginning of 2013. Only individual entrepreneurs can use it - it is not available to persons conducting economic activities in a different organizational form.
At its core, this system is similar to UTII, since it is valid for certain types of activities. However, they are established not at the municipal, but at the regional level. The characteristic difference of a patent is that there is no need to pay taxes quarterly and calculate them based on actual indicators.
An individual entrepreneur simply buys a patent for a period of one month to one year - and there is no need to submit any declarations to the Federal Tax Service. It is enough to pay for the patent on time. Income from activities for which a patent was acquired is recorded in a separate ledger. The amount of the patent is not reduced by insurance premiums, as with the simplified tax system or UTII.
What's better?
Every entrepreneur will be faced with the question of what to choose: simplified tax system, UTII or OSNO. As practice shows, both the simplified tax system and UTII turn out to be more profitable for the entrepreneur. The patent system is too specific in most cases, and OSNO will have to be used if the income is more than a certain amount.
Since UTII is used only for certain types of activities, it is best to give preference to the simplified tax system. This is the least expensive and least troublesome option. If the individual entrepreneur is not engaged in wholesale trade, and his clients do not require invoices, then “simplified” will be just the ideal choice.
STS options
When deciding which taxation system to choose for individual entrepreneurs in 2014, you should separately consider the issue related to the simplified tax system. Namely, what should act as an object of taxation. There are two options:
- net income (tax rate is 6%);
- income minus expenses (the tax rate is usually 15%, sometimes it can vary depending on the type of activity and other factors).
To decide which of these two options to choose, it is necessary to estimate the planned income, as well as the approximate amount of expenses and the ability to confirm them using reporting documents (waybills, invoices, checks, and so on). A complete list of expenses that are taken into account when calculating tax according to the simplified tax system is given in Article 346.16 of the Tax Code of the Russian Federation.
Taxation of net income
Selecting net income as an object of taxation is a beneficial decision in the following cases:
- The amount of expenses is small, or the expenses are quite difficult to document. In order not to get confused with documentation that can confirm the amount of expenses, you can choose this option of the simplified tax system.
- The individual entrepreneur plans to conduct its activities without employees.
- The entrepreneur plans to pay suppliers of raw materials or products using electronic payment systems. Documenting expenses in this case may be difficult.
Choosing this option is beneficial for those individual entrepreneurs who are engaged in the provision of services or any other activity that does not involve significant expenses. This may include, but is not limited to, any information or consulting activity. Having assessed the expected volume of income, the individual entrepreneur may well come to the conclusion that it would be beneficial for him to pay taxes at a lower rate.
Taxation of income less expenses
It is best to choose the option in which amounts representing the difference between income and expenses will be taxed; it is beneficial in the following cases:
- The expected volume of expenses will be very large and will constitute a significant share of income (you should focus on a share of at least 60%).
- Expenses can be easily confirmed by reporting documentation, that is, the individual entrepreneur will not have any problems with filing tax returns.
- Expenses will be regular, easily predictable and just as easily recorded.
- If in the region where the individual entrepreneur is registered, a preferential tax rate is established for the type of activity he has chosen. It is necessary to focus on cases in which income from benefits will be at least 70% of the entrepreneur’s total income.
Thus, choosing the simplified tax system with the choice of income minus expenses as the object is beneficial for those cases when an individual entrepreneur plans to engage in trade or production, in which a significant part of the finances is spent on the purchase of equipment and raw materials. This option should be chosen in cases where, despite a higher tax rate, it would be more profitable to tax the difference between income and expenses.
Bottom line
As practice shows, it is best to choose the simplified tax system, especially at first, while the amount of income is relatively small. If the activity chosen by the entrepreneur is included in a special list, then it is best to give preference to UTII. Choosing OSNO for beginning entrepreneurs is usually a rather unprofitable and inconvenient option.
Changes: January, 2020
Which taxation system should I choose for individual entrepreneurs? The choice of the optimal taxation system for an individual entrepreneur (hereinafter referred to as n/o) depends on several factors, in particular, on the type of activity that the individual entrepreneur plans to carry out, the main contractors (individuals or legal entities), the volume of planned revenue, the number of hired workers, etc.
Currently, tax legislation provides for the application 4 main tax regimes:
- OSNO (General mode n/a);
- USNO (Simplified mode n/o);
- UTII (Unified tax on imputed income);
- PSN (Patent system n/a).
Each of these systems has its own characteristics and conditions of use. Let's look briefly at each of them.
General or traditional system n/o
OSNO is one of the most complex, both in terms of the number of taxes required to be paid and in terms of the requirements for maintaining tax and accounting records and non-regulatory systems. This regime is deliberately chosen by taxpayers who are not subject to other non-regulatory systems, or who have high profits and are interested in crediting input VAT.
Who is switching to OSN
- Individual entrepreneurs who have lost the right to apply such regimes as the simplified tax system, UTII and PSNO (often due to exceeding the income limit, the maximum number of hired workers or failure to pay the cost of a patent on time);
- Individual entrepreneurs who did not submit an application to use a different n/o system during registration;
- Individual entrepreneurs whose maximum income exceeds the maximum established for special non-profit regimes, such as PSN and simplified tax system;
- Individual entrepreneurs working with legal entities and individual entrepreneurs using OSNO and interested in input VAT.
There are no special conditions limiting the use of this regime for individual entrepreneurs.
Types of taxes for individual entrepreneurs on OSN
OSN involves the payment of three main taxes:
- VAT;
Basic rate 18% (preferential rates 0% and 18%). Quarterly reporting - until the 25th day of the month following the reporting quarter. Advance payments are also due at the end of each quarter. It is obligatory for VAT payers to maintain tax accounting registers: books of sales and purchases;
- personal income tax;
The basic rate is 13%, for non-residents - 30%. Reports are submitted once a year, by April 30 of the year following the reporting year. During the year, the individual entrepreneur must pay 3 advance payments and, at the end of the year, calculate and contribute tax to the budget. The tax is paid by July 15 of the year following the reporting year.
- Property tax for individuals.
When paying this tax, individual entrepreneurs are treated like individuals, and therefore do not submit reports and pay the tax on the basis of notifications received from the tax authorities. The tax payment deadline is no later than December 1 of the year following the reporting year.
Simplified system n/a
The simplified tax system is currently one of the most profitable non-regulatory systems, characterized by simplified accounting and tax accounting, as well as a reduced tax burden.
Who switches to simplified taxation system
- Individual entrepreneurs whose activities are not subject to UTII and PSN;
- Individual entrepreneurs whose income and number of employees do not exceed established limits
Restrictions for use and switching to mode
- An individual entrepreneur can switch to a simplified regime from another regime only if the income for 9 months of the year in which the application for transition is submitted did not exceed 112.5 million rubles. (without taking into account the deflator coefficient).
Each year, the specified limit is adjusted by the deflator coefficient (hereinafter referred to as the increasing coefficient) established for a given tax period. In 2017, this coefficient is 1.425. In this connection, the income limit limiting the transition to this regime from 2018 is RUB 160,312,500;
- Individual entrepreneurs whose income in the tax period (year) does not exceed the limit of 150 million rubles can use the simplified tax system. (without taking into account the increasing factor). In 2017, this limit is RUB 213,750,000.
- The maximum number of employees should not exceed 100 people, and the cost of fixed assets should not exceed 150 million rubles.
Types of taxes for individual entrepreneurs using the simplified tax system
Individual entrepreneurs using the simplified tax system pay only one tax - a single one. The rate at which the tax is calculated depends on the selected object n/a:
- Object “income” - rate 6%;
The tax is calculated without taking into account expenses (except for paid insurance premiums).
- Object “income minus expenses” - rate 15%.
The tax is calculated based on the difference between income and expenses.
The declaration for the simplified tax system is submitted once a year, before April 30 of the year following the reporting year.
During the year, individual entrepreneurs pay advance payments based on the results of the 1st quarter, half a year and 9 months, and at the end of the year they calculate and pay tax.
Non-individual entrepreneurs are exempt from accounting on this system.
A single tax on imputed income
UTII is a rather specific non-taxable income regime, characterized by a certain list of activities for which it can be applied and the peculiarity of paying tax based on imputed rather than actual income. Real income does not matter for this system. UTII is also one of the most favorable, in terms of tax burden, non-tax regimes.
Who switches to using UTII
Individual entrepreneurs for whom the use of this regime, due to the peculiarities of conducting business, are more profitable than the use of other non-profit systems, switch to paying UTII.
Restrictions on the use of UTII
UTII does not have restrictions on the level of income, since the tax is calculated from imputed and not actually received income.
The main restrictions on the application of this regime are the number of employees, no more than 100 people, as well as the maximum share of participation of other organizations - no more than 25%.
In addition, for certain types of activities, restrictions may be established on the number of hired workers and the area of premises used for conducting activities.
Also, it should be noted that UTII can only be applied in the territory of the region in which it was introduced. For example, in Moscow the use of UTII is prohibited.
Types of taxes for individual entrepreneurs on UTII
Also, as in the case of the simplified tax system, one tax is subject to payment on UTII - imputed.
The tax is calculated based on the basic profitability of the selected type of activity, physical indicator, as well as coefficients K1 and K2. The rate under this system is 15%.
Reporting on UTII is quarterly, tax is also paid based on the results of each quarter.
Patent system n/a
A special feature of this non-regulatory regime is the acquisition for a certain period, from a month to a year, of a permit (patent) to conduct a certain type of activity.
Also, as in the case of UTII, the amount of income actually received does not matter for tax calculation purposes. Although, unlike UTII, the use of the patent taxation system is limited by an income limit - no more than 60 million rubles. per year (without taking into account the increasing factor).
Restrictions on the use of PSNO
Only those individual entrepreneurs whose income does not exceed 60 million rubles can apply PSN. per year, and the total number of employees is no more than 15 people. Also, the application of the regime is limited to a certain list of activities for which a patent can be acquired. Currently, this list includes 63 types of activities.
The cost of a patent is calculated based on the potential income established for each type of activity. The amount of income depends not only on the type of activity, but also on the place where it is carried out, the number of employees, vehicles, and the area of the premises in which the activity is carried out.
The tax (the cost of the patent) is paid either in two parts (if the patent is acquired for a period of more than six months), or in full (if the patent is acquired for a period of up to six months.
PSNO is the only non-automatic system that does not provide reporting.
Selecting a non-profit system for individual entrepreneurs based on specific examples
For a more clear comparison of the current N/O modes, let’s consider the effectiveness of each of them using a specific example. We will choose the most optimal scientific and technical system for such types of activities as:
- Cargo transportation;
- Salon;
- Online store;
- Cafe.
Note: in the examples under consideration, only special modes will be compared, as the most popular. Also, preferential rates and tax holidays that apply to certain types of activities in certain regions of the Russian Federation will not be taken into account.
- USNO;
- UTII;
Entrepreneurs who have the right of ownership (possession, use or lease) of no more than 20 vehicles can apply “imputation” for activities related to the transportation of goods. Also, in the region where it is planned to conduct this activity, legislative acts should provide for the possibility of using UTII for cargo transportation.
- PSNO;
The patent system does not establish restrictions on the number of vehicles for this type of activity. However, it contains a condition on the maximum income - no more than 60 million rubles. (without taking into account the increasing coefficient) and the number of employees - no more than 15 people.
Conclusion: the most profitable non-tax system for this type of activity can be considered UTII, the tax burden on this regime is almost two times less than on the PSN, three times less than on the simplified tax system 6% and more than 10 times lower than on the simplified tax system 15%.
Possible systems for use:
- USNO;
The use of the “simplified tax” for this type of activity has restrictions on the maximum income - no more than 150 million rubles. (without taking into account the increasing coefficient) per year and the total number of employees - no more than 100 people. The legislation does not establish other conditions for the application of the simplified tax system for this type of activity.
- UTII;
The provision of cosmetology and hairdressing services by the Tax Code, for the purposes of UTII, is classified as the type of activity “provision of household services”.
The Tax Code of the Russian Federation does not establish any specific restrictions on this type of activity, other than the number of employees (no more than 100 people). Also, in the region where this activity is planned, legislative acts should provide for the possibility of using UTII.
- PSNO;
The patent system classifies the activities of a hair salon as “hairdressing and cosmetic services.” The main conditions for the application of PSN for this type of activity is the maximum income - no more than 60 million rubles. (without taking into account the increasing coefficient) and the number of employees - no more than 15 people.
Conclusion: the most profitable tax system for this type of activity can be considered UTII, the tax burden in this regime is 1.5 times less than on the PSN, almost two times less than on the simplified tax system 6% and more than 6 times lower, than on the simplified tax system 15%.
Possible systems for use:
- USNO;
The use of the “simplified tax” for this type of activity has restrictions on the maximum income - no more than 150 million rubles. (without taking into account the increasing coefficient) per year and the total number of employees - no more than 100 people. The legislation does not establish other conditions for the application of the simplified tax system for this type of activity.
- UTII and PSNO.
The application of the specified taxation regimes for an online store under the Tax Code of the Russian Federation is not permitted. The Federal Tax Service directly spoke about this in its letter:
Conclusion: The simplified tax system of 6% is beneficial for those individual entrepreneurs whose share of expenses does not exceed 65% of income. Thus, the “simplification” with the income object will be beneficial for online stores engaged in the provision of various types of services, as well as the sale of goods at a high markup.
The simplified tax system of 15% will be beneficial for those entrepreneurs who sell goods at a small markup or on credit.
In our example, the share of expenses is slightly more than 68%, and therefore, the simplified tax system of 15% is more profitable in our example.
Possible systems for use:
- USNO;
The use of the “simplified tax” for this type of activity has restrictions on the maximum income - no more than 150 million rubles. (without taking into account the increasing coefficient) per year and the total number of employees - no more than 100 people. The legislation does not establish other conditions for the application of the simplified tax system for this type of activity.
- UTII;
The Tax Code, for the purposes of UTII, classifies the activities of cafes as the type of activity “providing public catering services carried out through public catering facilities.”
The main limitation for this type of activity is the area of the visitor service hall, no more than 150 sq.m. Also, in the region where the activity is planned, legislative acts should provide for the possibility of applying UTII for the specified type of activity.
- PSNO;
The patent system classifies cafe activities as “catering services provided through catering facilities.” The main conditions for the application of PSNO for this type of activity is the maximum income - no more than 60 million rubles. (without taking into account the increasing coefficient), the number of employees is no more than 15 people and the area of the visitor service hall is no more than 50 sq.m.
Conclusion: the most profitable tax system for this type of activity can be considered UTII, the tax burden in this regime is 1.5 times less than on the PSN, 2.5 times less than on the simplified tax system 6% and more than 5 times lower, than on the simplified tax system 15%.
Summarizing the above, in all of the above cases, UTII turned out to be the most profitable non-profit regime.
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Instructions
Study which an individual has the right to use in carrying out his activities. Each system has its own characteristics, tax payment deadlines and reporting forms. An entrepreneur has the right to choose a taxation and reporting system.
Consider the possibility of using the general tax system (OSNO) in your activities. Under such a system, an individual entrepreneur pays all necessary taxes and payments, unless he is exempt from payment on appropriate grounds. Typically this mode is used in relatively large enterprises.
Most taxes and contributions provided for by the general taxation system are assessed and paid by you only on the condition that the enterprise is engaged in a certain type of activity and a taxable base arises. Traditionally, individual entrepreneurs calculate and pay value added tax (VAT), personal income tax (NDFL), property tax, insurance taxes to the Pension Fund, the Territorial Mandatory Medical Insurance Fund, and the Federal Compulsory Medical Insurance Fund.
The next type is the simplified taxation system (STS). Its use is voluntary. As an individual entrepreneur, you are free to decide on the application of the simplified tax system and the choice of the object of taxation.
If you choose simplified, then you accept the obligation to pay a single tax and are released from the obligation to pay:
- value added tax, with the exception of VAT payable when importing goods into the customs territory of Russia and VAT payable in accordance with Art. 174.1 of the Tax Code.
Personal income tax (in relation to income received from business activities) with the exception of tax paid on income taxed at the tax rates provided for in paragraphs. 2,4,5 tbsp. 224 Tax Code of the Russian Federation.
Property tax for individuals (in relation to property used for business activities).
When choosing a simplified taxation system, make sure that the selected type of activity is not among those for which the simplified tax system is prohibited. A list of these species is given in Art. 346 clause 2 of the second part of the Tax Code of the Russian Federation.
For some types of activities established in a specific region, it is possible to apply a special regime, namely the simplified tax system based on a patent. In this case, the region sets a fixed cost for the patent, and you, as an entrepreneur, pay it in installments during the validity period of the patent. A patent is issued for a period of up to one year. Under this taxation system, you will keep a book of income and expenses, but you are not required to submit a declaration. It is possible to hire workers (no more than five people per year). A patent is valid only in the territory where it was issued.
If you are starting a business as an individual entrepreneur, choose one of the types of simplified tax system. The exception is such types of activities as wholesale trade or the need to transfer invoices to clients to reimburse VAT from the budget.
Russian legislation creates all the conditions for entrepreneurs to develop their business comfortably. Even the taxation of individual entrepreneurs does not provide for a specific rate or a uniform tax for all businessmen. Everyone has the right to decide which tax system to use, and there is plenty to choose from. There are 5 tax regimes in 2020, radically different from one another.
Types of individual entrepreneur taxation
The choice of mode should be taken as seriously as if it were your future home. After all, you will pay taxes on it for more than one day. Rate, period, base, payment terms, calculation procedure - all this is different for each mode. And if you make the wrong choice at the very beginning of your journey, you will no longer be able to reach the top in business.
The following types of taxation apply to individual entrepreneurs in the Russian Federation:
- Unified agricultural tax - unified agricultural tax;
- OSNO - general taxation system;
- STS - simplified taxation system;
- PSN - patent taxation system;
- UTII is a single tax on imputed income.
1. BASIC
OSNO is the most technically complex tax regime. An individual entrepreneur must have accounting knowledge or have his own specialist on staff to cope with reporting documentation, the list of which includes:
In addition, reporting to OSNO includes:
- Purchase/sales accounting book intended for VAT calculation;
- Personnel book;
- Reporting on insurance premiums;
- And reporting for personnel.
The list of taxes on OSNO is also long. It includes all payments that are provided for by law for taxpayers:
Depending on the type of work and the characteristics of the business, an entrepreneur may also pay the following taxes:
- Excise taxes;
- Water;
- For biological resources;
- For mining;
- Contributions for employees;
- Transport.
Despite numerous disadvantages, OSNO cannot be called unprofitable. The regime also has positive sides. This is the default mode. That is, you can get to it not only of your own free will, but also “fly away” from another mode. For example, PSN cannot recruit more than 15 people; if you exceed the norm, welcome to OSNO. This regime does not limit anyone in anything; you can add any number of employees to your staff and receive a ten-figure profit.
Another reason why many individual entrepreneurs may choose this type of taxation is the payment of VAT. Why? Organizations paying VAT prefer to cooperate with similar companies. It is much more pleasant for them to receive from them an invoice with the indicated VAT and reduce their tax on it than to conduct business with an individual entrepreneur using the simplified tax system.
2. simplified tax system
Most individual entrepreneurs choose a simplified tax regime, in which they do not have to pay VAT, personal income tax, or property tax. The entire tax burden is reduced to one tax:
- 6% on simplified taxation system for income;
- 5-15% on simplified taxation system for income minus expenses.
The tax base is chosen by the taxpayer himself. If you have limited expenses, the first option would be ideal. And if the costs are 60% of the profit or more, it is better to choose the second taxation system, since on it the individual entrepreneur will be able to subtract from the income all the expenses provided for in Article 346.16 of the Tax Code of the Russian Federation.
Individual entrepreneurs under general taxation pay a single tax once a year, and advance payments are made quarterly. Plus, at the simplified 6% rate, you can reduce advance payments and the final tax by the amount of insurance premiums. And it doesn’t matter for what period of time you paid them, the main thing is that in the same quarter for which the duty is calculated.
Employers and single entrepreneurs reduce the simplified tax system tax in different ways:
- The former can take into account contributions for themselves and for employees, but do not have the right to reduce the tax by more than half;
- The latter reduce the fee by the amount of all contributions made for themselves, down to 0.
With a base of income minus expenses, contributions can also be taken into account, but they are entered in the expenses column.
Not everyone can switch to the simplified tax system. It is prohibited to use the simplified taxation system for individual entrepreneurs:
- With a staff of 100 people;
- With an annual income of 60 million;
- Unified agricultural tax payers;
- With a prohibited type of work, these are persons practicing gambling, mining, production of excisable goods;
- Persons with branches.
Other disadvantages of the simplified tax system include:
- Impossibility of selling goods with VAT;
- Required presence of cash register.
3. UTII
If an individual entrepreneur decides to choose a taxation system such as UTII, he will pay tax at a rate of 15% not on the income received, but on the one imputed by the state. This is a certain figure that, according to legislators, is optimal for a particular type of activity.
Formula for calculation: BD (basic profitability assigned by the state for each type of work) x K1 (coefficient established by the Government) x FP (physical indicator, for example, sales floor area) x K2 (coefficient determined by regional authorities) x 15% (rate).
UTII exempts the taxpayer from VAT, personal income tax, and property tax. And most importantly - from installing the cash register. You can reduce the duty on insurance premiums according to rules similar to the simplified tax system.
It is not necessary to keep complete accounting records. But some documents still need to be filled out:
- Tax return;
- Physical accounting indicators;
- Reporting for employees;
- Additional reporting.
Among the disadvantages of this form of taxation are:
- Restriction on types of work - persons engaged in wholesale trade, production, and construction will not be able to apply the imputation.
- Lack of system in some regions; information should be clarified with local authorities. It is not valid in Moscow in 2020.
- You cannot hire more than 100 people.
- Tax must be paid even if there is a loss.
4. PSN
PSN is the most understandable taxation system for individual entrepreneurs, since it involves paying the cost for a patent. The complete absence of reporting, the choice of any convenient period (from 30 days to a year), work without a cash register - all these advantages give the right to call it the most profitable.
The rate for individual entrepreneurs on the patent taxation system in 2020 is 6%, and the base is taken to be a certain ideal profit level established by local authorities. The real income of the enterprise does not matter.
This is the best option for entrepreneurs with a seasonal or temporary business. But not everyone can join the taxpayers on PSN; the list of suitable activities is strictly regulated. It is similar to the list for UTII, only supplemented by small-scale production, for example, bakery products, sausages, dairy products, carpets, glasses, socks, business cards, ties.
In addition, the number of employees on a patent cannot exceed 15 people, and profit - 60 million rubles.
5. Unified agricultural tax
Unified agricultural tax is a favorable regime with a rate of 6%, but not on income, but on the difference between income and expenses. Payment is made only once every six months, and the declaration is submitted once a year.
The only disadvantage of the form of taxation for individual entrepreneurs is that it applies only to producers of agricultural products and persons engaged in fish farming.
Choosing the best mode
To decide which taxation system to choose for an individual entrepreneur, it is necessary to make a series of individual calculations of the tax burden for all possible regimes. Let's look at how to compare types of taxation using a specific example.
Entrepreneur Khadorkin plans to open a hairdressing salon in the Krasnoyarsk region. The projected profit per month is 777,000 rubles, there are 5 employees on staff, the projected expenses per month are 266,000 rubles, the amount of insurance premiums for employees is 34,000 rubles.
Let's calculate the expected tax on the most accessible preferential systems:
- PSN. The basic profitability for this region and type of work is 3,554,799 rubles. BD/12 months x 6% = 3,554,799/12 x 6% = 17,770 rub. per month. This amount cannot be reduced.
- UTII. K2 for hairdressing salons in Krasnoyarsk - 0.99. BD - 7,500, K1 - 1,798, FP - 5 (number of employees). Monthly fee = 0.99 x 7,500 x 1,798 x 5 x 15% = 10,012 rub. This amount can be reduced by state contributions, but no more than twice: 10,012 - 34,000 = 0. This means payable = 10,012/2 = 5,006 rubles.
- simplified tax system income. The company's expenses are not taken into account; all profits are subject to taxation at a rate of 6%. 777,000 x 6% = 46,620 rub. The amount can be reduced by insurance payments, but not more than twice. Therefore, payment is 46,620/2 = 23,310 rubles.
- simplified tax system income-expenses. But here expenses are taken into account, and contributions are entered into them: (777,000 - 266,000 - 34,000) x 15% = 71,550.
Conclusion: It is better for individual entrepreneur Khadorkin to opt for the imputed taxation regime, since his business generates large profits and is inexpensive. If expenses were more than 60% of profit, perhaps the most profitable system would be the simplified tax system for income minus expenses. Each case must be considered separately.
In addition to the amount of tax payments, the choice of taxation type depends on the following nuances:
- Availability of restrictions: number of staff, profit margin, type of activity;
- Regional features: K2 size, database for imputation and patent, simplified rates);
- The type of system that partners use;
- Export and import needs;
- Sales area for retail trade;
- Area of the service hall for catering;
- Number of vehicles for cargo transportation;
- Other indicators included in the calculations.
A list of golden rules for beginners in business that will help you choose the optimal taxation:
- Services sector. To work with individuals, you can choose imputation, since it is not necessary to use a cash register. And for cooperation with legal entities, it is better to give preference to simplification. Both with those and with other persons - it is possible to combine two taxes.
- Wholesale and retail trade with a large area of premises/halls. It is beneficial to use the simplified tax system with the deduction of costs.
- Small distribution and retail trade. The use of imputed tax or patent is more relevant.
- For large production It’s good to use OSNO, and for small businesses - a simplified tax.
How to switch to modes
The rules for switching from one type of tax to another are slightly different:
- If you initially want to register an individual entrepreneur on the simplified tax system, you should submit petition No. 26.2-1 to the Federal Tax Service within thirty days from the date of receipt of the certificate of opening an individual entrepreneur. If you switch - before December 31, since the switch is only possible from the beginning of the new period. Switching from the simplified tax system in the middle of the year is also unacceptable.
- To switch to imputation, it is enough to send an application to the Federal Tax Service in the UTII-1 form within five days after you start using it. In a day, you will be notified that you have started working on UTII from the date of its actual application. To register an individual entrepreneur for imputed tax, the same type of petition is submitted within thirty days from the date of actual registration.
- There is no need to register as an OSNO payer; general taxation is applied by default, unless the individual entrepreneur expresses a desire to switch to a different form.
- To register a patent, you need to fill out application 26.5-1 and take it to the tax office within ten days before starting work.
And don’t forget that after transferring to a different taxation system, you will not be automatically deregistered under the previous one. You need to submit a request to the tax office for deregistration, otherwise you will begin to combine 2 systems at the same time.
