Simplified taxation or simplified taxation system is one of the taxation systems. It is “simplified” because you need to report once a year and calculate one tax.
The simplified system comes in two types: “Income” or “STS 6%” and “Income minus expenses”, in other words - “STS 15%”. They differ in the principle of tax calculation.
In simplified form, 6% tax is paid on income. Your income is 300,000 per year, you calculate the tax on 300,000 rubles. There is no need to take anything additional into account.
In a simplified version, 15% tax must be paid on the difference between income and expenses. You earned 300,000 rubles and spent 100,000, your tax is 15% of 200,000 rubles or the difference between income and expenses.
Expenses are not everything you spend. The tax office has a list of expenses that can be used to reduce taxes. Therefore, you cannot simply calculate the tax; you will have to find out the tax rules. But we’ll talk about this another time, for now we’ll deal with the simplification based only on income.
Who has the right to work for the simplified tax system?
To work on a simplified basis, an individual entrepreneur must comply with three conditions.
Amount of income for the year. Until 2017, the maximum volume was 60 million rubles, now the threshold is higher - 150 million rubles per year.
Scope of work. An individual entrepreneur cannot mine, sell minerals and produce excisable goods, such as Pink Turkey perfume, rum, cigarettes and gasoline. In general, if you plan to become an oil tycoon, the simplified tax system will not work.
The number of employees. To simplify things, you should have no more than a hundred people working for you. These are full-time employees and those who work under a contract.
The number of employees is calculated for the reporting period. This means that there should not be more than one hundred people on average for the first quarter, half a year, nine months and a year.
Who benefits from simplified tax system 6%
The simplified rate of 6% is suitable if the entrepreneur spends almost nothing on the business or spends it, but rarely. For example, you don’t have to pay for a warehouse, goods, office rent or paper for employees.
Modulbank accountants believe that a simplified rate of 6% is beneficial if expenses do not exceed 60% of annual income.
For example, if your income for the year is a million rubles, and your expenses are 700,000, with the 6% simplified tax rate you pay 60,000 rubles, this is income tax. With a simplified 15% tax, the tax is less - 45,000 rubles, this is a tax on the difference between income and expenses.
The example is conditional, because the tax office still has to accept expenses for seven hundred thousand, and the tax can be reduced by the amount of the contribution, but the difference in the amount of tax may be the same.
What does the rate show?
The tax rate shows how much of the tax base must be paid. To simplify, the 6% tax base is income. You received 300,000 rubles for the year, your tax is 18,000 rubles or six percent of three hundred thousand.
Not all regions have the same rate. In most regions it is six percent, but by law regions can reduce the rate from six to one percent.
In the Vladimir region you can pay 4% of income. To do this, you need to produce clothes, bottled soft drinks or furniture.
Regions themselves determine the tax rate and the rate may change. Rates can be viewed on the tax website in the “Regional Legislation” section. To make it easier for you, we found a table from the Ministry of Finance with rates by region.
What income should I pay from?
In a simplified version, 6% tax is paid on basic and additional income.
Basic income is everything you received for your work. It doesn’t matter how you received it: by bank transfer, cash, banknotes, change or camels. This is all your income, and you pay tax on it.
Additional income is income that is not directly related to work. This kind of income is called “non-operating income”. What is considered such income is described in Article 248 of the Tax Code. Additional income is:
- interest on the current account balance;
- interest on individual entrepreneur deposits;
- fines paid by partners for violating the contract;
- exchange rate difference when selling or buying currency. The difference is calculated between the rate at which you changed the currency and the rate of the Central Bank.
In general, the rule is: if you earn something, you pay tax.
What you don't have to pay tax for
But there are still things that are not taxed. When calculating tax, you do not need to take into account:
- credit, loan, pledge or bank guarantee;
- money for returns from suppliers;
- tax refund if you paid too much;
- deposit or security deposit;
- gratuitous financial assistance;
- payment under an agency agreement or commission agreement that you will transfer to the client. In the contract, such a client is called “principal” or “committee”;
- grant or targeted funding.
The most common exception is if an individual entrepreneur transfers his own money from a personal account to a current account. This money is not considered income, so you do not have to pay tax on it.
When to pay tax
In simplified form, tax is paid four times. Three times during the current year, such payments are called “advance payments.” And the fourth time - next year, in tax language this is the “final” payment.
Taxable period
date
For the first quarter
Half year
Nine month
The money can reach the tax office within three days, and if you pay on a weekend or holiday, even longer. Banks transfer money to other banks only on weekdays - on the days when interbank payments are open. This is the rule of the Central Bank. To avoid being late with taxes, It’s safer not to put off paying your tax until the last day.
What period to count for?
Sometimes the name of the tax period creates confusion. The individual entrepreneur paid the tax for the first quarter, and then he has to pay for the first half of the year. At the same time, the first quarter is included in the half of the year and it is not clear what income to count.
To avoid confusion, keep the formula. First, you need to add up the income for the reporting period: if you report for six months, then you add up the income for six months. Then you calculate the tax on this income and subtract the tax you paid from it. What's left is what you have to pay.
Entrepreneur Fedor received 200,000 rubles for the first quarter and paid tax, and for the second quarter he received another 200,000 rubles. Now he calculates the semi-annual tax.
Tax for six months - 12,000 rubles. Fedor thinks this:
- semi-annual income = 400,000;
- tax for six months = 24,000;
- paid tax = 12,000;
- balance to pay = 12,000 rubles, or 24,000 minus 12,000.
It seems that the calculation is complicated and it is easier to calculate the tax for the desired quarter. For example, we pay for the first half of the year and have already paid off the first quarter, which means we only calculate the tax for the second quarter. This is also possible, but there is a risk of forgetting about the payment from the client, and then getting a fine.
In order not to get confused and not risk a fine, it is safer to calculate the tax on income for the entire period - for the first quarter, first half of the year, nine months and a year. Then don't miss anything.
Errors in tax calculations
When calculating taxes, there are details that are not always obvious and lead to errors in calculations. Here are a few of the most common.
Calculate tax not on the full payment amount. According to the Tax Code, income is the entire amount of receipts that are associated with the sale. This means that how much the buyer paid for the book is the income. The catch is that not the entire amount from the buyer may be credited to the individual entrepreneur’s account.
The first case is payments through acquiring. The owner of the online store accepts payment through the website. Payment on the site was organized by a partner - an acquiring provider. The partner takes a commission from each purchase, so not the entire payment amount is credited to the store owner’s account.
The buyer paid 1000 rubles on the website. From a thousand rubles, the partner took a commission of two percent or twenty rubles, so the store owner received not a thousand, but 980 rubles. In this case, tax must be paid on the entire thousand.
The second case is working with a courier service. The store owner works with a courier service. When the service receives money from customers, it does not transfer the entire amount to the store. She deducts her remuneration from the money for the purchase, so less comes to the individual entrepreneur’s account than the buyer paid. And the tax must be calculated from the full amount of payment, without deducting the commission.
Record income for the wrong date. For tax purposes, you received income at the moment the client paid for the order. Some individual entrepreneurs consider the date of payment to be the day when the money appeared in the account. This is a mistake, because the tax office does not care when the money ended up in the account.
The bookstore sells through the website and works with a courier service. If the buyer pays in cash, he transfers the money to the courier.
The buyer paid for the book on March 30 and gave the money to the courier. The courier gave the money to the store a month later, on April 30. It seems that the payment should be included in the income for the six months, but this is not the case. Payment must be included in first quarter income.
The revenue date is the date the buyer paid for the book or March 30th. And the courier can return the money even after a year.
The individual entrepreneur did not receive money into his account, but for the tax authorities, an iPhone is income. To calculate the tax, the individual entrepreneur must take into account its cost in the client’s store. If it costs one hundred thousand, the individual entrepreneur pays tax on one hundred thousand.
There is no single rule for what cost of goods to take into account. It is more reliable to indicate the price at which your partner sells the goods to everyone else, then the tax office will not have questions. To have even fewer questions, you will need a document for offset - an agreement on offset of counterclaims.
Accounting for Modulbank clients: We calculate taxes, submit reports, and talk to the tax office ourselves. Free, for 11,000 rubles per year or for 21,000 rubles per quarter, depending on the complexity.
→ modulbank.ru/buhgalterya
There is no strict form for the agreement. You write what you or your partner did and for what amount and that you both decided to count the work not with money, but with the work itself at such and such a price and describe the principle of calculating the price. There is only one rule: the more accurately you describe the principle of calculating the price, the more faith in the agreement.
What documents does the tax office expect?
An entrepreneur using the 6% simplified tax rate prepares two documents - a tax return and a ledger for accounting expenses and income.
Tax return- this is a business report, according to which the tax office verifies tax calculations. You prepare it once a year and submit it once a year too.
For individual entrepreneurs at a simplified rate of 6%, Modulbank has free accounting
The declaration has a fixed form and cannot be changed. You can fill out the declaration yourself on a computer or entrust it to specialists. Internet accounting or a bank accountant are suitable for this.
The simplified taxation system is a special system, a special taxation regime, the right to use which is not granted to all entrepreneurs. In this article we will tell you about the right to use the simplified tax system and help business managers decide on the possibility of using the simplified tax system in their activities.
Who has the right to apply the simplified tax system
All issues related to the simplified taxation system are regulated by Chapter 26.2 of the Tax Code of the Russian Federation. The simplified taxation system involves exempting the taxpayer from a number of tax payments:
| Taxes from which taxpayers of the simplified tax system are exempt | Explanation |
| Legal entities | |
| Income tax | Exception:
|
| Property tax | Exception: real estate, the tax base of which is calculated based on the cadastral value |
| VAT | Exception:
|
| Individuals (IP) | |
| Personal income tax | Exception:
|
| Property tax for individuals | In relation to property used for business activities. Exception: real estate, the tax base of which is calculated based on the cadastral value |
| VAT | Exception: import of goods; carrying out operations under a simple partnership agreement, investment partnership, property trust management agreement, concession agreement (Article 174.1 of the Tax Code of the Russian Federation) |
Who has the right to switch to the simplified tax system?
The notice states:
- selected object of taxation;
- residual value of fixed assets;
- the amount of income as of October 1 of the current year.
It should be noted that the entrepreneur submits not an application, but a notification to the tax authority, i.e. he independently takes full responsibility for the decision made.
You can submit a notification starting from October 1 and up to December 31, but you can start applying the simplified tax system only from January 1 of the following year. Newly created organizations wishing to apply the simplified tax system are required to notify the tax authorities within 30 days from the date of registration.
Example 1. Individual entrepreneur Profitable D.D. received a certificate of registration as a taxpayer on 03/10/2017. He will have to notify the tax authorities about the transition to the simplified tax system no later than 04/07/2017. The tax authorities, in turn, do not provide any notifications about the application of the simplified tax system by an organization or entrepreneur.
If it is necessary to confirm the decision made to switch to the “simplified” system, it is better to request an information letter, which will be provided to the Federal Tax Service without fail. It is possible to switch from a simplified taxation system to another only at the end of the tax period. Thus, an entrepreneur needs to make an informed decision before notifying the tax authorities about the transition to the simplified tax system.
Who does not have the right to apply the simplified tax system
The following organizations (individual entrepreneurs) do not have the right to apply the simplified taxation system (Article 346.12 of the Tax Code of the Russian Federation):
- organizations with branches;
- banks;
- insurers;
- non-state pension funds;
- investment funds;
- professional participants in the securities market;
- pawnshops;
- organizations engaged in the extraction and sale of mineral resources;
- organizations engaged in the production of excisable goods;
- organizations engaged in gambling activities;
- notaries and lawyers conducting private activities;
- organizations that have switched to agricultural tax;
- organizations in which the share of participation of other organizations is more than 25%;
- organizations with more than 100 employees;
- organizations whose residual value of fixed assets exceeds 150 million rubles;
- state and budgetary institutions;
- organizations that did not notify the tax authorities about the transition of the simplified tax system by December 31 or no later than 30 calendar days after tax registration for newly created organizations;
- microfinance organizations;
- private employment agencies.
When can you lose the right to use the simplified tax system?
Entrepreneurs may lose the right to use the simplified tax system in cases where:
- at the end of the tax period, income exceeded 150 million rubles;
- the average number of employees exceeded 100 people;
- the residual value of fixed assets amounted to more than 150 million rubles.
The taxpayer must notify the tax authorities of the loss of the right to use the simplified tax system within 15 days after the end of the reporting period (first quarter, half a year, nine months), i.e. must be reported on time:
- until April 15;
- until July 15;
- until October 15.
In this case, the declaration must be submitted no later than the 25th day of the month following the reporting period, i.e.:
- until April 25;
- until July 25;
- until October 25.
Example 2. LLC "ABV", conducting activities subject to the simplified tax system, ceased to exist on March 18, 2017. It is necessary to submit a declaration to the tax authority and pay the tax by April 25, 2017.
Who and under what conditions can apply the simplified tax system?
The taxpayer has the right to apply the simplified tax system, provided that the following requirements are met:
- the rules for applying the simplified tax system specified in Article 346.12 in relation to the types of activities of the organization are not violated (the list is indicated in the section “Who does not have the right to apply the simplified tax system?” of this article);
- the share of participation of third parties does not exceed 25%
- the average number of employees is no more than 100 people per year;
- the residual value of fixed assets as of January 1, 2017 does not exceed 150 million rubles;
- the amount of income does not exceed 150 million rubles for 9 months from the beginning of the tax period.
Example 3. ABC LLC in the reporting period for the first quarter of 2017 indicates income equal to 152 million rubles. Thus, ABC LLC is obliged to begin conducting its activities in accordance with the general taxation system from the 2nd quarter. If ABC LLC does not voluntarily express a desire to change the taxation system, it will be forced to work in accordance with the general taxation system.
Criteria for a simplified taxation system
In order to make a decision to switch to a simplified taxation system, an entrepreneur needs to very clearly understand the criteria of the simplified tax system:
Deadlines for submitting reports and paying taxes under the simplified tax system
The calculation of tax under the simplified tax system is carried out incrementally from the previous one and is taken into account in advance payments; the final payment will be calculated in the tax return. The timing of advance payments does not depend on the status of the taxpayer (legal entity or individual entrepreneur):
The deadline for submitting a tax return for the tax period and paying the finally calculated tax depends on the status of the taxpayer:
The tax return is submitted after the end of the tax period, i.e. next calendar year.
List of legislative acts regulating law
List of legislative acts:
Category “Questions and Answers”
Question No. 1. Our organization is quite large in the region in terms of the number of jobs. We meet all the criteria that allow us to apply the simplified tax system, but in the 1st quarter the average number of employees was 60 people, in the 2nd quarter 80 people, in the 3rd quarter 110 people. Does this mean that we should switch to a general taxation regime from the 4th quarter?
For the simplified taxation system, the reporting periods are as follows: first quarter, half a year, nine months. In accordance with these periods, you need to determine the average number of employees for nine months, which will be (60 + 80 + 110) / 3 = 83 people. Thus, the average number of employees for nine months was 83 people, which allows you to continue working on the simplified tax system.
Question No. 2. We are planning a transition to the simplified tax system, but one fact confuses us - does the cost of benches, lawns, etc. external improvement objects to limit the cost of fixed assets?
Objects of external improvement in accounting are accepted on the balance sheet of the organization as fixed assets, but they are not subject to depreciation in tax accounting. In this regard, when calculating the cost of fixed assets for the purpose of switching to the simplified tax system, external improvement objects are not taken into account.
Question No. 3. Should we take into account external part-time workers when calculating the average number of employees?
When calculating the average number of employees, you are obliged not only to take into account external part-time workers, but also employees with whom your organization has entered into civil contracts for the period of work. Thus, the average number of employees in an organization will consist of:
- full-time employees;
- external part-time workers;
- employees hired for the period of performing a certain type of work.
Taxes are an important part of every company's budget. In order for the budget to be spent rationally, it is necessary to carefully choose the taxation system and use the preferential simplified options that the state offers us. Read about all the nuances of the simplified taxation system for LLCs in our article.
What is simplified taxation?
The simplified tax system is an option for calculating taxes, which involves preferential payments to the state, eliminates the payment of part of the taxes and promises simpler document flow with the inspection authorities. The simplified system was introduced specifically for small enterprises with low annual revenues.The regime allows you to reduce transfers to the state, and therefore increase the opportunity for business growth and development. In addition, this system will make it easier for your accountant to report to the inspection authorities, and in this case it doesn’t matter whether you are an individual entrepreneur or an LLC, it will be easier for you to build an accounting system using the simplified tax system. If you find it difficult to choose the appropriate tax regime for your company, consult the outsourcing company Glavbukh Assistant.
Companies entitled to use the simplified tax system
- The taxpayer enterprise must have a staff of no more than 100 employees.
- The company's income cannot exceed 150 million rubles.
- The balance of the LLC must be less than 150 million rubles.
The simplified system can be used by those organizations that:
- the founders of this LLC include legal entities, but the percentage of their participation is less than 25;
- there is no branch development system;
- The organization retains the opportunity to use the simplified tax system if its revenue for the three quarters of the previous year did not exceed 112.5 million rubles.
These conditions are easy to fulfill if you have a small store or cafe. Moreover, since 2018, there have been changes in the legislation on the simplified regime, and it has become more accessible to a wider range of enterprises.
Changes to the simplified tax system in 2018
Starting this year, the government has increased the income and balance limits for LLCs and individual entrepreneurs, bringing them to 150 million rubles. And if previously only companies whose revenue did not exceed 60 million rubles could use the simplified procedure. Until 2018, enterprises with average income were also able to try all the delights of the preferential regime. This means that the state supports business and creates special conditions for ease of calculation and payment of taxes to the budget. But is the simplified tax system as attractive as many people think? Let's get acquainted with the nuances of the system proposed by the state.Attractive aspects of the simplified taxation system for LLCs
The main advantage of this regime is that it exempts entrepreneurs from payments to the state budget, which are mandatory under the general taxation system (OSNO).What taxes does the simplified tax system replace for LLCs?
- A percentage of the company's profits, with minor restrictions: for income from shares and interest on external debts, you will also have to pay a portion to the state.
- Partially from payments for property on the balance sheet. You will have to pay for real estate at cadastral value in accordance with the amendments adopted three years ago. They can be found in Article 346.11 of the Tax Code (TC), as well as in the law of April 2, 2014.
- Companies using the simplified tax system are also exempt from VAT. Except for cases when a legal entity is engaged in importing goods to Russia
But what percentage of income and profit will the tax be under the simplified tax regime? There are two options for calculating taxes using this system: 6 and 15%. Now we will tell you in detail about the options for calculating the tax budget within the framework of the simplified tax system.
"Simplified" 6% for LLC
In this mode, the tax amount is calculated based on all company income. Moreover, 6% is not the final rate, since the state allowed the regions to reduce it from 6 to 1.Therefore, before choosing one of the regimes within the simplified system, check with your local tax office what percentage of income is in your region or republic. “6% of income” is good because you don’t have to report on the funds spent and prove their availability. But at the same time, if your expenses exceed your revenue, then you will still have to pay tax, even at a minus. Therefore, some entrepreneurs who have a seasonal business or know that at first the business will work with a minus budget choose the “simplified” 15%.
STS 15% for LLC
If you decide to choose the option of calculating taxes “income minus expenses”, then you will have to pay 15% of the resulting balance to the state budget. This option is suitable for all organizations in which expenses account for more than half of the budget. Otherwise, it is better to choose the “6% of income” option. It is also worth understanding that you will have to document the expenditure of money within the business and maintain a special Book of Expenses and Income, the form of which is approved by law. It is necessary that these funds fall under the law on reporting under a simplified system. If expenses exceed income, you will still have to pay a fee. It will amount to 1% of the company’s revenue for the accounting period.What expenses can be taken into account when calculating the payment amount?
1. Payroll.
2. Rent for premises.
3. Repair costs and intangible assets.
4. Purchase of know-how and registration of your own inventions.
5. For payments to the insurance company.
6. To pay VAT.
7. For the services of a lawyer, notary, accountant.
8. For travel needs.
For a complete list of expenses, see Article 346.16 of the Tax Code of the Russian Federation.
All types of simplified tax calculations depend on the object of taxation: income and expenses; these indicators will become your tax base.
Tax base for accounting
The accountant must take into account the amount that is the basis for the selected regime.1. If you chose 6% of income, then you report to the state only for your income. That is, no one is interested in business costs.
2. If you decide to use the 15% “income minus expenses”, then your accountant will have to record the cost items established by law. To do this, you will enter data into a special book.
LLC reporting on the simplified tax system
Another advantage of “simplified” is simple accounting that even one accountant can handle. This fact is important for small businesses that do not want to overstaff. An organization that has chosen the simplified tax system of 15% is required to maintain a Book of Expenses and Income (KUDiR). And then, according to this document, calculate the difference between the amounts and calculate the payment, which is then entered into the declaration and submitted to the tax authorities.If you chose the simplified tax system 6%, then it is not necessary to maintain KUDiR. And if individual entrepreneurs are exempt from maintaining tax records, then the state has obliged LLCs to maintain accounting document flow. The approved declaration form can be downloaded.
When to pay LLC taxes using the simplified tax system?
Enterprises at any rate report within the same deadlines for payments and submission of declarations.
Important! LLCs can transfer the simplified tax system only from a bank account and save the payment order for reporting
Within the simplified tax system, there are payments in advance and after the fact at the end of the year. Moreover, if you do not make an advance payment for the simplified tax system on time, a penalty will await you.
Follow the deadlines:
- Payment for the 1st quarter is due by April 25
- six months before July 25
- 3 quarters before 25.10
Advances are calculated on the basis of accumulated amounts for each quarter, then they are taken into account in the final declaration and calculation of the final amount of the fee. A single payment under the simplified tax system based on the results of the year worked is paid until March 31 - this is the deadline for an LLC.
“Simplified”: examples of calculating payments
The enterprise LLC "Class" has revenue of 15,000,000 rubles. During the same period, expenses amounted to 14,500,000 rubles.The “class” is based on the simplified tax system “income minus expenses”, so to determine the tax base you need 15,000,000 - 14,500,000 = 500,000 rubles. Next, we calculate the tax to be paid to the state: 500,000 * 15% = 75,000 rubles. Then we calculate the minimum collection level: 15,000,000 * 1% = 150,000 rubles. As a result, we pay exactly 1% of income, since, according to the law, we cannot pay less than this amount.
How to switch to a simplified tax regime?
If you are just planning to open a business, then you should apply for the simplified tax system immediately at the time of registration of the organization, or within a month from the date of the official foundation of the company. But if you do not meet these deadlines, then the LLC automatically becomes a tax payer according to the general taxation system.You will be able to change the tax payment regime only for the next year, and the transition procedure is such that the application must be sent to the tax office already in the current year. True, a considerable period of time for reflection is given, and tax documents are accepted until the New Year (December 31).
You can download the application form for switching to simplified language.
Is it possible to reduce taxes under the simplified tax system?
Yes, it is possible to reduce the tax burden by almost half if you are on the “simplified” regime of 6% of income. You can reduce your taxes by accounting for insurance payments for employees. If an individual entrepreneur with low income can fully pay off the “simplified” tax with insurance premiums, then a limited liability company can only reduce it by almost half. Under the simplified tax system of 15%, insurance payments for employees are also considered expenses, so thanks to them, the tax amount becomes smaller.
Which LLCs are not suitable for “simplified”?
Each type of business is specific, so when choosing taxation, calculate the parameters of settlements with clients, the traffic volume of a retail outlet and its area, as well as many other nuances. Write down these expenses and estimate: perhaps the area is only 6 sq.m. and it is easier for you to use a single imputed tax. Or you produce furniture and it is more profitable for you to purchase a patent for your type of activity and solve almost all problems with accounting and calculation and payment of taxes.If you are a farmer, it is better to choose a specific UST (Unified Agricultural Tax), which was created specifically for this field of activity. It is also worth understanding that organizations that are not “simplified” and pay VAT usually choose enterprises with similar taxation for cooperation. Because everyone wants to compensate for value added tax using documents. And if your customers are under the general tax regime, then you should not switch to the simplified tax system, since you risk losing them.
Organizations that do not fall under the simplified tax regime in 2018
1. Companies producing excisable goods (tobacco products, alcoholic beverages, petroleum products and others)
2. Organizations engaged in the development of mineral deposits, as well as their sale (non-valuable minerals such as sand, black soil, stone chips, and so on do not fall into this category)
3. If they did not have time to notify about their desire to use the simplified tax system in 2017
4. If their staff is more than 100 employees
Types of activities that I cannot keep records on the simplified tax system
There are also a number of restrictions on the transition to a simplified system for a certain type of activity. And these are pawnshops, investment funds, microfinance organizations, LLCs with foreign capital, companies operating on the stock exchange, and so on. The full list can be found in Article 346.12 (3) of the Tax Code of the Russian Federation.Simplified taxation system for LLCs
We will summarize the results in a short table, thanks to which you can make your final choice of taxation regime.For the news feed, we launched a special channel in
All Russian entrepreneurs, as well as foreign enterprises carrying out business activities in Russia, are required to pay income tax to the treasury of our country. To the extent that calculating tax for entrepreneurs is a rather complicated procedure, given that several types of tax need to be calculated for one entrepreneur, recently, namely since 2002, some enterprises can switch to the simplified tax system, which greatly simplifies the taxation procedure. Let's look at what the simplified tax system for individual entrepreneurs is in simple words, how the abbreviation stands for, and how it is calculated.
Decoding
The simplified taxation system is a simplified taxation system. For an ordinary person, this abbreviation means little, but for entrepreneurs, the system greatly facilitates their activities. The name of this system speaks for itself, that is, in fact, one tax replaces several, namely income tax, value added tax and others.
Only representatives of small and medium-sized businesses can use this taxation system; large entrepreneurs cannot use it. Thanks to the simplified tax system, beginning businessmen can significantly save money on paying taxes.
Please note that according to the simplification, entrepreneurs pay only one tax.
How to switch to simplified tax system
So, only entrepreneurs who meet certain conditions can apply the simplified taxation system. Firstly, the enterprise’s profit for one reporting period, namely one year, should not exceed 120 million rubles (since 2017). Secondly, the company’s staff should not exceed 100 people.
All individual entrepreneurs can switch to the simplified tax system. And you can do this in the following way: first you need to submit an application to the tax office at the place of registration of the organization. The application period is from October 1 to November 30 of the current year; the new tax system will be in effect for the next reporting period.
Please note that the decision to transfer to the simplified tax system is made by the tax authority, therefore, the application must indicate profit from business activities for 9 months, that is, for the period from the beginning of the year until the date of filing the application and the number of full-time employees.
Rates and calculation examples
For a taxpayer making payments under the simplified tax system, there are two tax rates:
- 6% is applied to the total profit of the enterprise without deducting expenses, this is if expenses do not exceed 60% of the total profit;
- 15% applies to income less expenses when production costs exceed 60% of revenue.
Now let’s figure out what is considered income of an individual entrepreneur under the simplified tax system. After all, only profits from business activities are taxed, so it is very important to know what kind of income is taken into account when calculating the tax. So, when calculating tax under the simplified system, all profits from business activities are taken into account, for example, proceeds from the sale of goods or services, funds received from leasing real estate or equipment, as well as other sources of income, including profits from issuing loans against interest. Even the profit of an enterprise in the form of property is subject to tax according to the simplified tax system. In other words, any income that is taken into account on the balance sheet of the enterprise.
There is a list of income that is not taken into account when forming the tax base:
- Income of an individual entrepreneur outside the scope of his business activities, for example, income from the sale of property that is in personal use and is not the property of the enterprise.
- Borrowed funds from an enterprise, for example, an entrepreneur needed a loan, and he received it in the form of cash or property, this is not the profit of the enterprise, but an obligation to the creditor, and accordingly there is no need to pay tax for it.
- Deposit rate. There is one nuance here, for example, an enterprise that issued a loan at interest, on the profit from the borrower’s interest payments, he must pay tax, but the refinancing rate and another 5 percent are deducted from the interest rate.
- Deposit and prepayment, if the enterprise budget receives a deposit or pledge from a counterparty, then this is not considered profit, but only security; after the transaction is completed and full payment is made, the funds will already be considered the entrepreneur’s revenue.
- Subsidies received from the state are also not included in the formation of the tax base.
Please note that detailed information can be found in the Tax Code of the Russian Federation, Chapter 26.2.
How is tax calculated?
So, let’s look at specific examples of how the simplification for individual entrepreneurs is calculated. By the way, it should be noted that when switching to the simplified tax system, an entrepreneur has the right to choose at what rate he will pay tax, or, more precisely, from what amount it will be calculated, from net profit or total income. Let's consider both options.
Income and expenses when calculating the simplified tax system: example
Example
An individual entrepreneur received an income of 580 thousand rubles, his expenses amounted to 320 thousand rubles. How tax is calculated:
- 580000-6%=34800 rubles;
- 580000-320000=260000 rubles, 260000-15%=39000 rubles.
In general, each businessman has to decide for himself at what rate it would be more profitable for him to pay tax; from this example, it is obvious that 6% of revenue is more profitable than 15% of net profit.
Thus, what is a simplified taxation system for individual entrepreneurs? This is a system for small and medium-sized businesses in our country, which reduces the tax burden and greatly simplifies the work of accountants. By the way, you need to pay this tax once a year, no later than April 30 for the past period.
Most limited liability companies operating in Russia operate on a simplified tax system, which simplifies administration and reduces company costs. In this article we will look in detail atand what you need to pay attention to in order not to break the law.
Introduction
The simplified tax system is a convenient and flexible system that allows you to reduce the burden on the organization, devoting a minimum of time and money to administration. But it is impossible to say unequivocally that simplification is a guarantee of maximum benefit for the LLC, since everything depends on many factors.
LLC on the simplified tax system is exempt from most classical taxes
There are two simplified tax systems in Russia: income (you pay 6 percent of any amount received into your account) and income minus expenses (we subtract what you spent from your income and pay 15% from the balance). To choose the right one, contact a lawyer or consult with the tax office which option is suitable for your type of activity.
How much do you need to pay
Organizations operating under the simplified tax system do not pay VAT and income tax (but only if VAT is not calculated by customs). The main burden on them comes from so-called insurance premiums, which amount to approximately 30 percent of the amount paid in the form of wages to employees. In addition to employees, tax is also paid for the owner of the company who receives a “salary.”
Note that can be floating - regions have the right to independently establish them, depending on the state of affairs and the overall financial burden. Thus, for the object “Income” the rate can be reduced to 1 percent, and for “Income minus expenses” - up to 5 percent.
In parallel with the reduction in the simplified rate, the organization has the right to reduce the amount of the advance payment for the unified tax by transferring insurance premiums in the required quarter. Legal entities and individual entrepreneurs, with the right approach, reduce the single tax by 40-50 percent, and if an entrepreneur works without hired employees at all, then with a low income, a single tax may not be accrued for him at all.
In the “Income minus expenses” diagram, “salary tax” is transferred to the expense column, reducing the tax base, which provides additional benefits to the entrepreneur.
Attention:LLCs operating under the simplified tax system pay tax payments exclusively by non-cash method. You cannot pay tax in cash according to the resolution of the Ministry of Finance of the Russian Federation.
Is it difficult to administer the simplified tax system?
According to expert opinions, simplified taxation system for LLCs It is considered one of the easiest systems to manage. The entrepreneur himself can do the bookkeeping without hiring an accountant (of course, if the turnover is small). To do this, you should fill out the Income and Expense Accounting Book, as well as simple accounting, which can be organized in various programs, such as 1C. In order to report to the tax authorities, it is necessary to submit a single declaration by the last day of March (submitted for the past year). Please note that companies and entrepreneurs operating on a single tax basis submit such declarations every three months, that is, once a quarter.
Attention:According to the simplified tax system, one declaration is submitted, but there are reporting periods for it (every quarter, with the exception of the last). Based on the results of the reporting period, an advance payment is made, which is subsequently clarified and agreed upon with the annual declaration.
Study the tax code to understand exactly what you need to pay and when
What falls under the tax base
Under the tax base at simplified taxation of LLC the total amount of income falls (the Income system), and when working on the Income minus expense system - the amount of income to the account, reduced by the amount of expenses. Please note that LLC income includes:
- Income received from the sale of services or goods (both own production and through resale).
- Income received by other means. This includes interest on deposits or loans, gratuitous transfer of property, income on securities or shares.
In fact, everything that goes into the company’s accounts is taxed, including dividends.
Do I need to pay property taxes?
Another important question: Does the LLC pay property tax under the simplified tax system? According to Article 346.11 of the Tax Code of the Russian Federation, LLC is exempt from paying this obligation. But there are certain exceptions.
- Shopping centers, business centers or offices in them.
- Retail premises, office premises, premises used for catering or consumer services.
- Residential objects not related to fixed assets.
- Real estate registered to foreign companies not operating in the Russian Federation.
If such premises exist, then taxes will have to be paid, and the cadastral value of the object serves as the tax base.
Important:If you are the owner of the above objects, then before paying taxes, consult with a specialist. The fact is that in some regions of the Russian Federation, some of these objects are not subject to taxation, so submit a request to Rosreestr or simply consult with the local branch of the Federal Tax Service.
Do I need to pay transport tax?
Next, we will consider whether you need to pay LLC transport tax on the simplified tax system and in what cases this should be done. According to Article 346.11 of the Tax Code of the Russian Federation, LLCs operating on a simplified basis are payers of this tax. Let us note that companies operating under the “Income minus expenses” regime have the right to add transport taxes to expenses, thereby reducing the taxable base (this possibility is provided for in Article 346.16 of the Tax Code).
LLC pays tax on vehicles used in business activities
Of course, personal cars are not included in this opportunity - only those cars that are used in the company’s business activities are suitable for reducing the base. The LLC must submit a declaration at the end of the year to the Federal Tax Service in order to report on expenses and confirm them.
When is it necessary to pay advance payments?
For companies paying taxes and fees As simplified, the following advance payment terms apply:
- At the end of the first quarter - until April 25.
- At the end of the second quarter - until July 25.
- At the end of the third quarter - until October 25.
Based on this information, the tax office calculates the amount of the single tax and adjusts payments. It must be paid by March 31; if the deadline is missed, a penalty will be charged, and then the tax authorities have the right to fine the LLC by 20% of the amount of the outstanding debt.
In this article we examined in detail,and what controversial issues may arise when calculating the tax base if the company owns vehicles or real estate. If you have any questions, do not hesitate to contact the nearest branch of the Tax Service - experienced specialists will advise you and help you understand the current system. Try not to miss the deadlines for paying advance payments and the single tax - this may become an additional justification for conducting an unscheduled inspection by the relevant authorities. With the right approach and small turnover, the amounts of taxes under the simplified tax system are quite low, especially since they can be reduced and reduced - consult with a competent accountant to avoid overpayment and improve your financial situation.
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