Conditions for the transition to the simplified tax system in 2021

Criteria

Let’s say right away that the criteria for switching to the simplified tax system in 2021 are stipulated in various articles of Chapter 26.2 of the Tax Code of the Russian Federation. Therefore, for your convenience, we will now list them all at once:

№	Criterion	Norm of the Tax Code of the Russian Federation
1	A limit has been set for the transition to the simplified tax system in 2021: · for 9 months of 2017, income should be no more than 112.5 million rubles; · for the entire 2021, income should not exceed 150 million rubles.	Clause 2 Art. 346.12 and paragraph 4 of Art. 346.13
2	The maximum residual value of fixed assets according to accounting as of October 1, 2021 is 150 million rubles Clarification: the cost of intangible assets does not play a role.	Subp. 16 clause 3 art. 346.12
3	The average number of personnel does not exceed 100 employees	Subp. 15 clause 3 art. 346.12
4	The largest share of other companies in the authorized capital of the simplified company is 25%	Subp. 14 clause 3 art. 346.12
5	Lack of branches	Subp. 1 clause 3 art. 346.12

Please note that the transition to the simplified tax system from 2021 is possible only if the company/individual entrepreneur simultaneously complies with the listed criteria.

Also see “Moving from “imputed” to “simplified”.

Transition to simplified tax system 2021

To switch to the simplified system, enterprises and entrepreneurs must comply with all the conditions for the transition to the simplified tax system and not engage in certain types of activities (Article 346.12 of the Tax Code of the Russian Federation).

Privately practicing notaries and lawyers, banks, insurers, pawnshops, professional participants in the securities market, microfinance and budget organizations cannot become “simplified”. The simplified regime is also not available for foreign companies, investment, non-state pension funds, and private employment services. The transition to the simplified tax system 2021 is impossible if an individual entrepreneur or company produces excisable goods, extracts and sells minerals (except for common ones), or conducts gambling.

In addition to the above, the “simplified tax” is incompatible with the payment of the unified agricultural tax (UST), and the average number of personnel for an entrepreneur and organization should not be higher than 100 people, otherwise the transition to the simplified tax system will not take place in 2021.

All of the above conditions are not mutually exclusive, that is, they must be met together.

Order

Let’s say right away that the procedure for switching to the simplified tax system from 2021 has not fundamentally changed. It is enough to meet the above criteria, and also have time to submit the corresponding notification to the Federal Tax Service at the location (residence of the individual entrepreneur) before January 09, 2021 inclusive (clause 1 of Article 346.13 of the Tax Code of the Russian Federation):

In 2021, December 31st falls on a Sunday. It will be a day off. Therefore, according to tax legislation, the rule of transfer to the next working day applies (clause 7, article 6.1 of the Tax Code of the Russian Federation). That is, January 09, 2021.

The form of this document is enshrined in Appendix No. 1 of the order of the Federal Tax Service of Russia dated November 2, 2012 No. ММВ-7-3/829, and the electronic format for sending is enshrined in Appendix No. 1 of the Federal Tax Service order No. ММВ-7-6/878 dated November 16, 2012.

You can download the notification form about the transition to the simplified tax system from 2021 from our website here.

Thus, the notification procedure for switching to a simplified system is in effect. That is, you don’t need to wait for any special permission or go-ahead from the tax authorities. At the same time, the future simplifier must decide in advance which object according to the simplified tax system he wants to use. There are 2 options (Article 346.14 of the Tax Code of the Russian Federation):

Pay tax only on income.
Deduct tax on income reduced by expenses incurred.

If you do not have time to submit a notification about the transition to the simplified tax system from 01/09/2018, you will not have the right to apply this special regime (subclause 19, clause 3, article 346.12 of the Tax Code of the Russian Federation).

From the above, we conclude that the transition to a simplified special tax regime, as a general rule, is permissible from the beginning of the next calendar year. And you need to worry about this in advance. At the same time, newly created companies and individual entrepreneurs can count on switching to the simplified tax system from 2021 if they do not have time to submit a notification within 30 calendar days from the date of tax registration, which is indicated in the certificate (clause 2 of article 346.13 Tax Code of the Russian Federation).

Also see “Violations of simplified taxation system payers: list 2021”.

The procedure for switching to the simplified tax system from 2021

In 2021, the procedure for switching to the “simplified system” remains as before: if all the requirements for switching to the simplified tax system-2018 are met, the individual entrepreneur or company notifies the Federal Tax Service of its decision within the prescribed period.

This must be done at the place of registration of the taxpayer, presenting the notification to the inspectorate in person, or sending it electronically, or by mail in a valuable letter with notification and a list of the attachments. The notification document can also be attached to the set of documents when registering a new company or individual entrepreneur.

Please note that the procedure for switching individual entrepreneurs to the simplified tax system is the same as for organizations. After submitting the notification, there is no need to wait for approval from the Federal Tax Service - a written response from the inspectorate is possible only if the application of the “simplified procedure” is refused. In addition to the notification, tax officials should not require additional documents and confirmation.

Summary

Despite the fact that among businessmen there are people who do not consider the transition from a general tax regime to a simplified one useful for themselves, there are many for whom this will be one of the few opportunities to increase their capital by reducing the tax burden. It is worth recalling here that at least 6 million legal entities operate in our country, a third of which use OSNO. It is quite possible that, if they prefer the general simplified tax system, their real income from commercial activities will have to increase significantly. However, I don’t want to make too optimistic forecasts, because from year to year we have the same problems - illegal actions of Federal Tax Service inspectors, the arbitrariness of the “firemen”, the impudence of the “Ministry of Emergency Situations”, attacks from Rospotrebnadzor and much more from the same series. Eh, if only we could solve these problems... We have no choice but to wait for the weather by the sea.

Thank you for your attention.

Terms of use by entrepreneurs of the simplified tax system

In order to use the “simplified system” in running a business, the following conditions must be met:

Number of personnel – up to 100 employees.
Residual value of fixed assets – up to 150 million rubles.
The maximum income is not a constant value.
Participation shares of other companies – maximum 25%.
Lack of branches and other separate structural units.
The company does not relate to insurance, banking and other types of activities.

The size of the first two criteria remains unchanged for a long time. Regarding the amount of income earned, it is adjusted towards growth annually.

How to fix an error in a notification

If an error is made during preliminary calculations, it must be corrected before the deadline for submitting the notification. A free-form written message is sent to the Federal Tax Service Inspectorate informing about the detected inaccuracy. It is acceptable to generate the notification again with the correct data.

An existing organization switching to a simplified system from the new year has the right to clarify the object selected earlier. She needs:

send notification within the time limits specified above. In the document, put the appropriate o or “2”.
cancel the previous notification. For this purpose, a covering letter is attached to the updated document.

It is compiled in any form. The sequence of presentation is as follows:

Inform that a notification has already been submitted.
There was an error in previous calculations that was only discovered.
The document is sent again because the inaccuracy needs to be corrected. For example, change the taxable object from “1” to “2” or vice versa. No explanation will be needed regarding the reasons for his change. Enough with the message that there was an inaccuracy in the document sent earlier. Otherwise, it is possible that the tax authorities will have a lot of auxiliary clarifications. It is enough to note that a technical error occurred and, as a result, the paper was filled out incorrectly.

At the end of the written communication, you should ask for cancellation of the previous notice. When mentioning it, it is important to clearly highlight which tax object the organization has chosen. This will protect her from the fact that tax specialists will confuse the notifications.

The document on the transition to the simplified tax system, filled out again, must be attached to the letter. This will ensure that the updated notification to the inspectorate will not be lost.

When the letter is received by tax specialists, the company has grounds to apply in 2021 the object that was reported. There is no need to wait until these workers accept the conclusion. They are not required to send a response message regarding the notification, unless the enterprise sends a request and asks for it. But for reinsurance and further calm work, it is wiser to dial the inspector’s number and get information whether the previous notification has been canceled.

An organization that has just registered does not have the right to change the selected object until the end of the year. This prohibition also applies when there is an error in the notification regarding the simplified tax system. If instead of “2” the number “1” is entered, then you will not be able to replay. It is prohibited to clarify the notice. The Federal Tax Service argues that the company began to apply the special regime from the moment of registration, in fact, immediately after its founding. And taxpayers already using the simplified tax system do not have the right to change the object until the year ends.

When the company's management does not recognize the arguments presented as legitimate, it is not prohibited from giving orders to calculate advances in a more profitable way. But you will have to prove the case in court, and there are reasons for this, because:

Another object of taxation was not used before submitting a notification to the Federal Tax Service.
There is no clause in the Tax Code prohibiting an error made in a notification from being corrected.
In the declaration, the selected object is filled out only based on the results of the past year.

When a company or other organization has calculated that the simplified tax system is more profitable for them than the system that is currently in force, it is necessary to double-check whether its indicators and characteristics meet the mandatory criteria that allow the use of a special regime in commercial activities.

Why are they afraid to cross?

Despite all its attractiveness, some companies try to avoid applying the simplified tax regime. As a rule, this is due to the fact that the organization's key clients also adhere to OSNO. The ability to deduct VAT, the availability of multimillion-dollar contracts, as well as the basic “prestige” of participating in tenders have an impact. We spoke with the leaders of some of our client companies to find out how they view the possibility of regime change. We did not consider those who would be happy to switch but do not have the appropriate opportunities; on the contrary, we were interested in those companies who really simply do not want to do this. Here is the most revealing answer to our question:

“In principle, my accountant and I don’t see any obvious point in this. Yes, theoretically, we can “divide” our company into several legal entities, but we don’t need this. I can roughly imagine how much less we will pay to the Federal Tax Service due to the absence of income tax, VAT and property tax. However, believe me, the general mode gives us a real opportunity to interact with large customers. As you yourself know, we have multi-million dollar accounts, our counterparties are interested in VAT deductions. If we switched to the simplified tax system, they would easily prefer our competitors. And by the way, they all work on OSNO. Plus, opening new legal entities is also a headache. We can do this quickly enough by finding a good lawyer, but we’ve been working on the reputation of our name for a long time. In terms of finances, we cannot qualify for a “simplified” plan, but in terms of the number of employees we qualify. There are serious people behind our clients - I think they will not be very pleased to see the seal of another organization in the contract. They all know very well how much effort and money, in the end, we spend on maintaining the quality of service. And imagine here that they receive an agreement for approval from Romashka LLC. Who is she? Probably, our managers will be able to explain this correctly, but the name of the general director will be different. They will think that the quality of customer service will really be different. In other words, the idea of a transition is not for us”...

From this answer we can conclude that tax benefits may not always be the basis for switching to a simplified regime. In fact, reducing the cost of paying taxes, in this particular case, according to the director, can lead to an outflow of clients interested in VAT deductions. It is quite possible that earlier he and the accountant had already tried to calculate everything and became convinced over time of the need to apply the general regime. Another interesting topic is also touched upon here – quality of service. We cannot judge to what extent the director’s statement in this case will be fair. At the same time, who knows, maybe he’s really right? In any case, until you try, you won’t understand. True, their reputation is “at stake”, therefore, they are unlikely to take risks.

Comments

01/30/2018 at 01:48 pm # Reply
Alexander

Hello. Please tell me, is it possible to write an application and work for the simplified tax system not from the beginning of the year, if the registration of an individual entrepreneur is carried out for the first time and not from the beginning of the year?

01/30/2018 at 02:28 pm # Reply

Good afternoon. When registering an individual entrepreneur, the deadline for submitting an application for the application of the simplified tax system is 30 days from the date of registration of the individual entrepreneur. The registration date of the individual entrepreneur is indicated in the Unified State Register of Individual Entrepreneurs, which you receive from the Federal Tax Service or the MFC. It does not matter when the individual entrepreneur was registered, from the beginning of the year, or not.

07/11/2018 at 09:44 # Reply

Good afternoon If an individual entrepreneur on UTII opens a new OKVED (renting non-residential premises) in September, is it possible to apply for the simplified tax system?

07/11/2018 at 17:01 # Reply

Good afternoon. You can switch to the simplified tax system only from the beginning of the calendar year. The Tax Code of the Russian Federation does not provide for the possibility of switching to the simplified tax system when adding a new type of activity. This is confirmed by the Letter of the Ministry of Finance dated 04/21/2014 N 03-11-11/18274. Consequently, for a new type of activity, if you do not use one of the special modes, you will work on OSNO.