Patent or simplified tax system from 2021: which is more profitable?

At the moment, entrepreneurs have the opportunity to choose from several tax systems that differ from the main one in simplified parameters and responsibilities. And the question of which system to choose often arises for individual entrepreneurs. It is necessary to objectively evaluate systems, assuming profitability. And in order to evaluate, you need to know why each of the selected systems is good and what is bad. After all, in order to make the right decision, you need to at least know the characteristics of such factors as the permitted number of employees, annual income, and take into account the type of activity. Most often, according to statistics, the question now arises of choosing between the simplified tax system and the PSN for individual entrepreneurs.

First thing's first - compliance

Before deciding which tax system - patent or simplified tax system - will be most profitable for you, you should check whether your activity meets certain criteria that allow you to choose one or another tax payment regime. This issue is especially relevant for those entrepreneurs who are already operating, receive a certain amount of profit and have employment contracts concluded with employees.

For a patent, restrictions on use are specified in Art. 346.45 of the Tax Code of the Russian Federation, and when deciding on the transition to the simplified tax system, an entrepreneur should study Art. 346.12-346.13 Tax Code of the Russian Federation. So, for example, to be able to use a patent, it is necessary that the maximum amount of profit in one year be 60 million rubles. In the case of the “simplified” system, the profit limits are 150 million rubles.

Another important point is that the average number of employees of an individual entrepreneur under the PSN should not exceed 15 people, while under the simplified tax system it is permissible to have up to a hundred employees as part of the individual entrepreneur. In addition, the PSN system in the coming 2021 will be extended only to 64 types of commercial activities and only in cases where the possibility of using this system is enshrined in regional legislation. For example, a patent is not applicable to the sale of goods that are subject to mandatory labeling. “Simplified” is appropriate in almost all types of activities, with rare exceptions prescribed in the Tax Code of the Russian Federation.

What is better - a patent or simplified tax system in 2021

When comparing the simplified tax system or a patent for individual entrepreneurs, which is more profitable, one cannot help but take into account the different procedures for calculating tax payments. What is the difference:

under the simplified tax system, the tax is calculated from the received revenue (USN “income”) or from the difference between income and expenses (USN “income minus expenses”). For the object “income” the tax is paid at a rate of 6%, for the object “income minus expenses” - at a rate of 15%, and the tax for the year must be at least 1% of revenue (rates can be reduced by regional authorities);
a patent does not depend on the amount of income actually received; its value is calculated as 6% of the potential (presumably possible to receive) amount of annual income for the corresponding type of “patent” activity specified in regional legislation.

Payments under the simplified tax system can be reduced by insurance premiums paid during the tax period for employees and “for yourself”:

under the simplified tax system, “income” is deducted from the accrued tax amount, while an individual entrepreneur without employees can reduce the tax by the entire amount, and for individual entrepreneurs with employees, the tax can be reduced only by 50%;
under the simplified tax system “income minus expenses,” contributions are included in expenses and reduce the tax base.

Insurance premiums paid in 2021 do not affect the cost of the patent - they are paid without reducing the payment under this special regime. But from 2021, by analogy with the “simplified tax”, it will be possible to reduce the cost of a patent by the amount of insurance premiums paid in the corresponding tax period “for oneself” and for employees engaged in such activities.

How does a patent differ from the simplified tax system?

“The key difference that should be especially noted for an individual entrepreneur is that when choosing the simplified tax system “Income”, all income actually received as a result of your activities will be taxed,” explained Opekunskaya. — If we are talking about choosing a patent, then in this case the entrepreneur will pay tax on the amount of possible income, which is established at the legislative level. If your actual income is above this level, you will not have to pay additional taxes.”

Patent tax system

PSN in the form in which it operates now has existed since 2013. From that moment on, it began to gain high popularity among the Russian business community.

The regulations for working on a patent are fixed in Chapter 26.5 of the Tax Code of the Russian Federation. The constituent entities of the Russian Federation have the right to prohibit the use of the patent taxation system for entrepreneurs operating in their territories.

Regional authorities are allowed to expand the list of activities that are subject to the regime within the codes of economic activities. However, they cannot change any rules of the Tax Code.

The validity of each patent is limited to 12 months within one calendar year. The minimum period is one month. At the end of the term, it can be extended, but it cannot be terminated early.

How is the amount of tax on PSN calculated?

The amount of tax depends on the possible, and not on the income received by the entrepreneur. This means that the amount of payment to the budget does not depend on the income received in the course of the entrepreneur’s activities. This is the main difference between a patent and a simplified taxation system.

Regional authorities for each individual type of activity and municipality determine the potential income by type of activity. Previously, the maximum level was fixed at the legislative level, but in 2021 it was canceled. Now regional authorities can establish any potential income (Federal Law of November 23, 2021 No. 373-FZ).

When determining, the following factors are taken into account:

number of personnel working in the state;
number of registered vehicles;
number of seats;
vehicle loads;
number of facilities (for retail, catering and rental services);
other.

You can calculate a patent using a special tax service calculator. By indicating the validity period of the patent, the type of activity and the region where it will be carried out, you will instantly receive the amount of tax required to be paid.

Who can use a patent

The patent taxation system can only be applied by those entrepreneurs whose activities meet the following criteria:

The number of employees performing their functions in all types of work should not exceed 15 people.
Individual entrepreneurs do not carry out “patent activity” within the framework of a simple partnership agreement (joint activity agreement) or a property trust management agreement.

Individual entrepreneurs are switching to a patent tax system to reduce the tax burden on business. This is possible due to the fact that the single tax under the PSN replaces other budget payments required in the general system: personal income tax, property tax (if real estate is not included in the special list) and VAT (except for imports and duties of the tax agent).

How to get a patent

An entrepreneur must contact the tax service to obtain a patent. The authority issues it for each type of activity. Moreover, if it is carried out in several regions, then in each of them it will be necessary to obtain a separate patent.

You can submit the relevant documents in person to the Federal Tax Service, through your representative by proxy, or by sending them via mail or the Internet. Please note that documents are submitted no less than 10 days before the start of the activity.

If you plan to work at your place of registration, then submit an application to the tax office to which you are attached. When opening a business in another city, you must submit an application to any tax authority in its territory. But to make the procedure go faster, it is better to find out in advance which tax office the address where you plan to conduct business is attached to.

By the way, from January 11, 2021, a new application form for the transition to the patent tax system (PTS) should be used.

Tax amount and payment procedure

Entrepreneurs using the patent tax system pay a tax of 6% of the possible income established at the legislative level. The constituent entities of the Russian Federation have the right to introduce additional preferences for individual entrepreneurs, within which the tax rate is reduced to 0%.

Tax payment procedure:

if the patent is issued for a period of up to 6 months, then the full amount of tax is paid no later than the expiration of the patent;
when obtaining a patent for a period of 6 to 12 months, payment is made in two stages: a third no later than the first 3 months, the rest is paid at any time before the expiration of the patent.

We advise every entrepreneur to keep a record of all cash deposits in the accounting book in order to keep track of all limit indicators.

Is it possible to reduce the cost of a patent using insurance premiums?

Previously, patent payers could not reduce the amount of tax on insurance premiums paid for themselves and employees. This was the main disadvantage of the special regime.

On November 11, 2021, the State Duma adopted amendments to the Tax Code, which give entrepreneurs the opportunity to reduce the tax amount down to 0 (if an individual entrepreneur works alone) or up to 50% (if there are officially employed employees).

What are the advantages and disadvantages of “simplified” and PSN for an individual entrepreneur?

The indisputable advantages of “simplified”, which provide it with advantages over PSN for individual entrepreneurs, perhaps include the following:

there are no restrictions on the implementation of several activities at the same time, while with PSN for each activity, as well as the place in which it is carried out, you will have to obtain its own separate patent;
as mentioned above, it is possible to create a larger staff of workers (up to 100 people under the simplified tax system versus 15 people under the PSN);
a larger annual income limit compared to a patent, exceeding which you lose the right to apply this tax regime.

“Simplified” also has its disadvantages in comparison with a patent. For example, the advantages of PSN include the following points:

the tax base for a patent is determined by the amount of possible income;
If a patent is issued for a period of six months or less, the tax will need to be paid after this period. With a PSN valid for 6-12 months, a third of the tax must be paid in the first 90 days, while the rest of the payments can “wait” until the patent expires. “Simplified” means mandatory quarterly payment of advance payments;
with PSN it is not necessary to submit reports.

Income restrictions

Using one simplified approach, you can increase your income in 2021 to as much as 200 million, but as soon as we add the patent taxation system to the simplified tax system, the maximum possible amount of revenue for an individual entrepreneur as a whole drops to 60 million rubles. Otherwise, we’ll get kicked off the PSN.

How can we bypass the limit on the amount of revenue and still work on the PSN if we are likely to exceed the permissible threshold, for example, towards the end of the year?

In this case, you can take out a patent not for the whole year, but only for the period in which we definitely will not exceed 60 million in total revenue until the end of the patent.

For example, we take the PSN for 9 months, assuming that in October, most likely, the restriction will be violated. We have already considered this issue in detail.

Who can use a patent and how to obtain it?

According to Art. 346.43.Tax Code of the Russian Federation, the PSN system can be used by individual entrepreneurs whose average number of employees does not exceed, as we have already said, 15 people.

“Moreover, this applies to the entire tax period and applies to all types of business activities carried out by individual entrepreneurs,” Maria Opekunskaya clarified.

As for submitting an application to the tax authority about the individual entrepreneur’s desire to switch to PSN, this must be done 10 days before the start of his commercial activities as an individual entrepreneur. According to paragraph 3 of Art. 346.45 of the Tax Code of the Russian Federation, the duty of the tax authority is to issue a patent to the entrepreneur no later than five days from the date of receipt of this application.

Other conditions affecting the choice of simplified tax system or patent from 2021

The choice of a special regime may be influenced by other factors that are important for a particular taxpayer. For example:

Keeping tax records under a patent or simplified tax system for individual entrepreneurs is almost equivalent - during the tax period, a book of income and expenses (KUDiR) is filled out, recording the amount of taxable income. With the simplified tax system “income minus expenses”, the KUDiR also takes into account expenses, but not all in a row, but only certain ones that comply with the procedure prescribed in Art. 346.16 Tax Code of the Russian Federation.
A declaration under the simplified tax system is submitted once a year; for a patent, reporting is not established at all.
Tax payment is made in different ways: under the simplified tax system, advance payments are made quarterly, and the balance of the tax for the year is transferred to the individual entrepreneur no later than April 30 of the following reporting year (clause 7 of Article 346.21 of the Tax Code of the Russian Federation). The cost of a patent for a period of up to 6 months must be paid by the individual entrepreneur no later than the last day of its validity, and if the patent lasts more than six months, 1/3 of its cost is paid within the first 90 days (clause 2 of Article 346.51 of the Tax Code of the Russian Federation), and the remaining 2/3 - until the end of the validity period.
A patent is valid only for one calendar year; its validity does not transfer to the next year. Therefore, an application to switch to PSN is submitted at least once a year. It is enough to send a notification about the transition to the “simplified tax” once - in the future, if the entrepreneur complies with all the established criteria, by default the special regime is retained for the next tax period.

There is another significant factor - the patent is valid in a specific region. To conduct business in another subject of the Russian Federation, you need to register with the local Federal Tax Service and acquire a new patent, which may be unprofitable for the entrepreneur. In addition, a patent is issued (and calculated) for each type of activity separately.

For greater clarity, let’s try to calculate a patent or simplified tax system for individual entrepreneurs - which will be more profitable if you take specific numbers.

How to combine PSN with “simplified”? Can these two systems be used simultaneously?

Based on the provisions of Chapter 26.5 of the Tax Code of the Russian Federation, individual entrepreneurs are not prohibited from combining several taxation systems within the framework of their activities. For example, when using PSN, an individual entrepreneur can simultaneously conduct activities that are subject to a different tax regime. In this case, the businessman is obliged to keep records of property, business operations and obligations in accordance with the requirements of the applicable taxation system prescribed by law.

Restriction on residual value of fixed assets

For activities under the patent taxation system, there are no restrictions on the residual value of fixed assets.

For entrepreneurs using the simplified tax system, the residual value of fixed assets, determined according to accounting rules, should not exceed 150 million rubles. In this case, it is necessary to take into account the residual value of those fixed assets that are used only under the simplified tax system (Letter of the Ministry of Finance dated 03/06/2019 No. 03-11-11/14646).
The cost of operating systems used only in patent activities does not affect the possibility of using the simplified tax system.

Those. Fixed assets are the area where accounting legislation “intrudes” into the activities of individual entrepreneurs.

Of course, these are huge values, and as the classic of Russian literature wrote, “a rare bird will fly to the middle of the Dnieper...”. But there are limitations.

If the OS is simultaneously used in both types of activities, then I think that it should be accepted when calculating the limit under the simplified tax system as a full-fledged unit.

How are expenses and income taken into account when combined?

When combining different taxation regimes, the entrepreneur is obliged to differentiate between the accounting of income, expenses, number of personnel and the cost of fixed assets separately for each tax system. The procedure for organizing and maintaining separate accounting is fixed in the accounting policy. This will save the merchant from additional questions from the Federal Tax Service.

The rule of separate accounting is mandatory for maintaining OSNO and patent at the same time for an individual entrepreneur, as well as when combining simplified taxation and PSN, and even UTII. How exactly an entrepreneur will take into account revenue and costs does not matter, the main thing is that the accounting method allows for a clear separation of everything that is connected with a specific taxation regime.

If costs cannot be divided by type of business when combining taxation systems, then they should be distributed in proportion to the share of income in each taxation regime.

PSN includes only income from sales of the type of activity specified in the patent. The remaining income is taken into account when calculating tax on the simplified tax system.

IMPORTANT!

Expenses for “patent” activities cannot be taken into account either on the simplified tax system or on the special tax system.

Calculate and pay tax on the simplified tax system and tax on personal tax separately from each other according to the rules that are provided for each of them.

When combination is impossible

If an entrepreneur does not meet the conditions, then he does not have the right to simultaneously apply a simplification and a patent. For example, if a businessman’s income during the period of validity of the patent exceeds the permissible limit of 60 million rubles under both preferential regimes.

The right is also lost if the average number of personnel is exceeded. But officials plan to introduce new rules for “flying” with the simplified tax system.

When restrictions are introduced on types of activities, combining modes becomes impossible. For example, if an entrepreneur sells goods that are subject to mandatory labeling (medicines, furs, shoes), then from January 1, 2021, he has no right to apply the PSN to this type of business.

Work of individual entrepreneurs according to the simplified tax system

Among the features of the “simplified” system are the relative ease of accounting, along with reporting and a low tax burden. This system is designed specifically for individual entrepreneurs and small businesses. You can switch to the simplified tax system if:

The total value of all property is less than one hundred million rubles.
The number of employees is less than one hundred people.
The annual return is below a fixed amount.

The following categories of entrepreneurs may be exceptions:

Notaries with lawyers.
Representatives of the gambling business and pawn shops.
Manufacturers of excisable products.
Those who, due to the scope of their activity, pay the single agricultural tax.
Companies that are engaged in the sale or extraction of minerals (the exception in this case is useful common resources).

Now let's talk about the types of simplified systems.

Features of combination in regions

Regional authorities have the right to establish exclusive taxation features within their own territories. Thus, standards may differ in the following areas:

permitted types of activities for PSN;
tax rates for patent application;
preferential rates of the simplified tax system;
zero rates of PSN and simplifications.

Check the regional specifics of taxation when combining regimes on the official website of the Federal Tax Service.

Features of the simplified tax system

The simplified tax system is a system that has been proven over the years, on which both organizations and entrepreneurs are allowed to work.
It was created specifically for small enterprises with a small cash flow and a limited staff, and due to simplified accounting, it facilitates activities. The law establishes the framework within which this system is applied (effective in 2021):

We recommend you study! Follow the link:

How can an individual entrepreneur with or without employees switch to a patent form of taxation?

The total value of all property assets of the enterprise is no more than 150 million rubles.
The number of hired personnel does not exceed 100 people.
The amount of total income received over 9 months did not exceed 112.5 million rubles (for the year this figure should be less than 150 million rubles).

“Simplified taxation” is contraindicated for certain categories of taxpayers – notaries, individual entrepreneurs on agricultural tax, excise tax payers and others. Unlike PSN, it is allowed to use an unlimited number of types of classes in one mode.

The regime is valid throughout the Russian Federation; you can switch to it from the beginning of next year if the above conditions are met.

The tax conditions of the simplified tax system for individual entrepreneurs for 2021 have not changed - an entrepreneur can choose which object to use:

“income”, when a 6 percent tax is calculated on full revenue;
“income minus expenses”, when a 15 percent tax is calculated on the difference between the amounts of income and expenses.

Regional legislators are given the right to reduce rates to a minimum level.

The simplified tax system and the patent are similar in that in both systems the accrued tax replaces personal income tax, property tax of individuals (if the object is not valued at cadastral value), VAT (if import operations are not carried out).

If there is a staff of employees, the entrepreneur must charge their salaries with the full range of taxes and insurance fees. With his contributions, individual entrepreneurs have the right to reduce the amount of expenses, thereby reducing the tax base. This “simplification” is more profitable than a patent.

Tax accounting is maintained in the Book, where income and expense transactions are entered.