What taxes does an individual entrepreneur pay on the simplified tax system in 2020-2021?

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Taxes for individual entrepreneurs under the simplified tax system are somewhat different from contributions from entrepreneurs under other taxation systems. The taxpayer receives a low interest rate, simple reporting, and the opportunity to reduce taxes through insurance payments.

“Simplified” is aimed at representatives of small and medium-sized businesses. This regime is especially popular among individual entrepreneurs without employees - with a small income, the tax can be reduced to almost zero. The simplified tax system is regulated by Chapter 26.2 of the Tax Code of the Russian Federation.

Who cannot apply the simplified tax system

organizations operating in the banking, insurance, investment, microfinance sectors, including non-state pension funds, pawnshops and professional participants in the securities market;
organizations operating in the field of gambling and mining;
notary and law offices;
organizations involved in the production of excisable products (alcohol, tobacco products, fuel);
government and budgetary, as well as foreign organizations;
organizations with more than 100 employees;
organizations that have switched to the Unified Agricultural Tax (Unified Agricultural Tax);
organizations with a residual value of fixed assets of more than 100 million rubles;
organizations with an annual income of more than 60 million rubles;
organizations with branches and representative offices;
organizations that did not submit an application for transition to the simplified tax system in a timely manner in accordance with the procedure established by law.

Unified agricultural tax: for whom is it intended?

Unified Agricultural Tax or Unified Agricultural Economy. The tax is intended for entrepreneurs who produce or sell agricultural products, as well as those engaged in fisheries. It was developed to support the country's agriculture and stimulate the growth of farms and private households. It is possible to switch to this form if the ratio of income from agricultural activities to income from other types of activities is 70/30. Payments are made twice a year: advances in the first half of the year and until March 31 - the annual amount. The tax rate for individual entrepreneurs on the Unified Agricultural Tax is 6%. The calculation is carried out according to the formula: (Total amount of earnings - total amount of expenses) x 6%.

The form is prohibited for the following categories of payers:

producers of excisable goods;
gambling business.

Unified agricultural tax replaces:

Personal income tax (income received through business activities is taken into account);
VAT (except for the export of goods, raw materials);
property tax – we are talking about property necessary for carrying out activities.

Payers of the Unified Agricultural Tax are not required to pay the minimum tax if the activity is unprofitable.

Advantages of the simplified tax system for individual entrepreneurs

Tax reporting under a simplified scheme;
There is no need to maintain complex accounting records and submit reports to the tax office;
Possibility of choosing the object of taxation (income tax 6% or income tax minus expenses 15%);
There is no VAT and personal income tax for business activities;
Possibility to reduce the simplified tax system by the amount of paid insurance premiums (in whole or in part);
Submission of reports and declarations to the tax authority is carried out once a year.

This might also be useful:

What reporting must an individual entrepreneur submit?
How much taxes does an individual entrepreneur pay in 2021?
Tax system: what to choose?

What taxes does the individual entrepreneur pay?
General taxation system for individual entrepreneurs
simplified tax system for individual entrepreneurs in 2021

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Disadvantages of the simplified tax system for individual entrepreneurs

Limitation of areas of activity where the simplified tax system can be used, as well as a number of conditions under which the simplified tax system cannot be used.
The list of expenses that can reduce the tax base under the simplified tax system is limited;
To account for expenses under the simplified tax system “income minus expenses”, rather complex accounting is required, and all documents must be drawn up correctly;
An organization using the simplified tax system cannot open additional branches;
Even if an individual entrepreneur operates at a loss, he is not exempt from paying the minimum tax;
Large companies and firms that pay VAT most often refuse to cooperate with organizations using the simplified tax system, since in fact they lose 18%.

Summary

But, of course, each entrepreneur chooses a regime according to his own criteria.

. For example, a businessman does not want to “collect every check” and check potential counterparties. In this case, it will be most profitable for him to use the PSN or the income simplified tax system, since tax specialists do not check expenses under these taxation regimes.

If an individual entrepreneur expects large expenses, for example, to purchase expensive equipment or build a building, then it is more profitable for him to choose the simplified tax system with the object “income reduced by the amount of expenses.”

And, of course, if a person plans to bake cakes and sell them or engage in tutoring, then the optimal choice would be not to register as an individual entrepreneur, but simply register as self-employed

and not submit any reports to the Federal Tax Service and other funds.

Types of simplified tax system and tax calculation

Individual entrepreneurs using the simplified tax system have the opportunity to choose the object of taxation:

income – 6%;
income minus expenses – 15%.

In different cases, one or another object of taxation represents a greater benefit.

Calculation of income taxes: profit received * tax base 6%.

For example, the income of an individual entrepreneur for 1 year was 300,000 rubles. The tax will be 18,000 (300,000 *6%).

Calculation of taxes on income minus expenses: (income – expense) * 15%.

For example, the income of an individual entrepreneur for the year was 500,000 rubles, expenses were 300,000 rubles. The tax will be 30,000 rubles (200,000*15%).

IMPORTANT:

1) all expenses must be reflected in the book of income and expenses, and also be confirmed by cash or sales receipts, receipts, invoices and other payment documents.

2) not all expenses are taken into account when calculating taxes. Expenses that can be taken into account are reflected in Art. 346.16 Tax Code of the Russian Federation.

3) taxes on income minus expenses are calculated at a rate of 5 to 15%, depending on the region and type of activity. The easiest way to find out the rate in your region is at the nearest tax office.

Taking into account the nuances described above, you need to take a serious approach to choosing an object of taxation, having first made at least approximate or estimated calculations.

Results

The calculation of the single tax under the simplified tax system depends on the selected object of taxation, type of activity and regional legislation regarding the establishment of reduced rates. The deadline for filing a single tax return, in turn, depends on whether the taxpayer is an organization or operates as an individual entrepreneur.

You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

How to reduce the simplified tax system

If an individual entrepreneur does not have employees, the simplified tax system is reduced by the entire amount of insurance premiums. For example, with a simplified tax system of 6%, the income was 250,000 rubles. Insurance premiums amounted to 20,000 rubles. Tax is 15,000 rubles. We reduce the amount of insurance premiums. Total payable is 0 rubles. For example, with a simplified tax system of 6%, the income was 2,000,000 rubles. Insurance premiums amounted to 20,000 rubles. Plus, we take into account the insurance premium of 1% on income over 300,000 rubles. The fee is 17,000 rubles. Total insurance premiums are 37,000 rubles. The tax is 120,000 rubles. We reduce the amount of insurance premiums. Total payment is 83,000 rubles.
If an individual entrepreneur has hired workers, then the simplified tax system tax can be reduced only by 50% of the amount. For example, with a simplified tax system of 6%, the income was 100,000 rubles. Insurance premiums amounted to 20,000 rubles. The tax amounted to 6,000 rubles. Reduce by 50%. The total payment is 3,000 rubles. For example, with a simplified tax system of 6%, the income was 500,000 rubles. Insurance premiums amounted to 20,000 rubles. The insurance premium of 1% of income exceeding 300,000 rubles amounted to 2,000 rubles. The total amount of contributions is 22,000 rubles. The tax amounted to 30,000 rubles. Reduce by 50%. Total payment: 15,000 rubles.
If an individual entrepreneur works under the simplified tax system, income minus expenses, it is not possible to reduce taxes by the amount of insurance premiums. But the amount of insurance premiums can be included in expenses.

Comments

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Mikhail 01/20/2016 at 11:13 pm # Reply

Pensioners and mandatory payments to individual entrepreneurs

Colleagues, I will retire soon, but I want to become an individual entrepreneur. The tax regime is most likely the simplified tax system. Do I need to make a payment: Contribution to the Russian Pension Fund (PFR)?

Natalia 01/21/2016 at 08:17 # Reply

Mikhail, good afternoon. According to the current legislation of the Russian Federation, you are required to make payments to the Pension Fund and the Federal Compulsory Medical Insurance Fund as soon as you register as an individual entrepreneur, even if you are a pensioner. The legislation does not provide any tax breaks for individual entrepreneurs. Moreover, from 2021, working pensioners do not have the right to annual indexation of pensions.

Mikhail 02/03/2016 at 07:17 # Reply

Again please! Do I need to pay 1% on the amount over 300,000 rubles on UTII?

Natalia 02/05/2016 at 15:00 # Reply

Mikhail, good afternoon. When applying UTII, if the imputed income exceeds 300,000 rubles, you must pay 1% on this amount to the Pension Fund until 1.04 of the year following the reporting year. Your actual income does not matter in this case. The calculation is based on imputed income, from which 300,000 must be subtracted.

Tatyana 02/05/2016 at 15:00 # Reply

Hello. I register as an individual entrepreneur for house decoration, can I get a tax holiday?

ostapx1 02/05/2016 at 15:22 # Reply

Hello Tatiana! Regions have the right to introduce tax holidays. But only some regions took advantage of this right. Therefore, you need to study the legislation of your region in this regard.

Natalia 06/27/2016 at 01:02 pm # Reply

Tatyana, you can take advantage of tax holidays if the authorities of your region have adopted a corresponding law. The Federal Law allows the use of tax holidays, but for this there must be a decision of the local legislative assembly.

Alexander 02/21/2016 at 11:10 am # Reply

Hello, what taxes exist for private household plots and are there any concessions?

Natalia 02/21/2016 at 12:38 # Reply

Alexander, good afternoon. In Art. 2 of the Law of 07.07.2003 No. 112-FZ “On personal subsidiary plots” defines personal subsidiary plots (abbreviated as private household plots). Private household plots are a form of non-entrepreneurial activity for the production and processing of agricultural products. Those. You do not need to register as an individual entrepreneur. The Tax Code of the Russian Federation exempts from taxation the income of citizens received as a result of the sale of livestock and crop products grown in private household plots. But at the same time, the following requirements of the Tax Code of the Russian Federation must be met: 1. The total area of the land plot (plots), which (are) located (at the same time) under the right of ownership and (or) other right of individuals, does not exceed the maximum size established in in accordance with paragraph 5 of Art. 4 of Federal Law No. 112-FZ. Each region has the right to set maximum plot sizes by regulatory legal acts of local governments. 2. The taxpayer must maintain private household plots without the involvement of hired workers. Only family members can be involved in work. 3. The taxpayer must submit to the tax authority a document issued by the relevant local government body (the board of a horticultural, gardening or dacha non-profit association of citizens), confirming that the products sold were produced in his private household plot; Despite the fact that clause 4 of Article 2 of the above-mentioned Law establishes that “the sale by citizens running a private subsidiary plot of agricultural products produced and processed during the conduct of a private subsidiary plot is not an entrepreneurial activity,” it must be borne in mind that if You sell most or all of the products grown in private household plots and purchase and sale transactions are concluded constantly, and the buyers are individual entrepreneurs or organizations, then the tax authorities may consider the activity to be entrepreneurial. If you are the owner of a private household plot and registered as an individual entrepreneur, then tax inspectors almost always try to include income from the sale of agricultural products grown in the private plot in his income from business activities, on the general basis required for individual entrepreneurs.

Elena 03/04/2016 at 11:27 # Reply

I am an individual entrepreneur on the simplified tax system. I paid the mandatory payment to the Pension Fund and 6%. can I withdraw the rest of the money from the account for myself? Or do I need to pay personal income tax on this amount?

Natalia 03/04/2016 at 20:38 # Reply

Elena, good afternoon. You can safely manage the entire amount in your current account, the main thing is not to violate the deadlines for paying advance payments of the simplified tax system and contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund. Individual entrepreneurs on the simplified tax system without employees do not pay personal income tax.

Alexander 03.23.2016 at 20:26 # Reply

Good afternoon Please specify which amount of income is subject to 1% tax. Real income or imputed income i.e. settlement for individual entrepreneurs.

Natalia 03.23.2016 at 21:56 # Reply

Alexander, good afternoon. Your question, as far as I understand, refers to the additional contribution to the Pension Fund - 1%. If so, then 1% under the simplified tax system is taken from the difference between total income and 300 thousand rubles, under UTII the difference from imputed income and 300 thousand rubles is taken, under PSN the difference between potentially possible income and 300 thousand rubles is taken.

Anatoly 04/19/2016 at 09:44 # Reply

Good afternoon Are there tax benefits for individual entrepreneurs if it is registered in the name of one of the parents of a large family?

Natalia 06/27/2016 at 01:18 pm # Reply

Anatoly, good afternoon. There are no tax benefits for individual entrepreneurs if they are one of the parents of a large family. There are tax benefits for large families, whether you are an individual entrepreneur or not - personal income tax deduction, for transport tax, for property tax. At the federal level, there is not a single federal law regulating the rights and freedoms of large families; this is provided for by the regional legislation of the region where you live .

Victoria 06/09/2016 at 08:05 # Reply

If I open an individual entrepreneur, how much% will I pay monthly to the Pension Fund?

Natalia 06/27/2016 at 13:00 # Reply

Victoria, good afternoon. An individual entrepreneur without employees is required to pay fixed contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund, regardless of the amount of actual income, in an amount depending on the minimum wage. In 2021, there is a minimum wage of 6,204 rubles for the payment of fixed contributions. Therefore, during the year, until December 31, 2016, you must pay: to the Pension Fund - 6204 x 26% x 12 months = 19356-48 to the FFOMS - 6204 x 5.1% x 12 months = 3796-48 You can pay in any amount monthly or one-time at the end of the year.

Evgeniya 06/27/2016 at 12:20 # Reply

Hello, please tell me, I want to open an individual entrepreneur and rent a small room 2x3m for a shop of handmade goods. Approximately how much will this cost me? I live in the Voronezh region. Thank you.

Natalia 06/27/2016 at 01:11 pm # Reply

Evgeniya, it all depends on the taxation system you choose. The only constant amount for individual entrepreneurs without employees is fixed contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund - 23,153-33 rubles. When choosing PSN or UTII, paying taxes will not depend on your actual income; with the simplified tax system, you will pay either 6% of income or 15% of the difference between income and expenses. In the Voronezh region, each municipality has the right to independently apply tax rates, everything depends on where you will carry out your activities. For example, with a sales area of 6 sq m, in the Borisoglebsk district for 12 months the PSN will be 30,000 rubles. For UTII, you need to know the adjustment coefficient k2 for your district.

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Changes to the simplified tax system in 2021

Tax rates. According to amendments to the tax code of the Russian Federation, which came into force on January 1, 2021, regions have the right to change the tax rates applicable to the simplified tax system. Previously, this possibility was provided only for the object of taxation of income minus expenses. Regions, at their discretion, could reduce the tax rate from 15% to 5%. Now the rate can be changed for the object of taxation, income. Regions have the opportunity to reduce tax rates from 6% to 1%. For new subjects of the Russian Federation - Crimea and Sevastopol, this year it is possible to reduce the tax rate to 0%. It is also possible to establish a preferential rate of 0% for individual entrepreneurs engaged in the provision of household services in social, industrial and scientific spheres.
Income limit on the simplified tax system. The threshold for the maximum amount of income for which the use of the simplified tax system is permitted has been increased. In 2021, those whose income does not exceed 79.74 million will be able to work under the simplified tax system. Also, organizations with an income of no more than 59.805 million rubles for the first three quarters will be able to apply in 2021 to switch to a simplified taxation system.

Deadlines for paying taxes under the simplified tax system

The simplified tax system is paid 4 times a year, quarterly, that is, three advance payments, and one annual. The deadline for advance payments is the 25th day of the third month of each quarter, for annual payments - April 30 of the year following the previous tax period.

First quarter: payment deadline – April 25;

Second quarter: payment deadline – July 25;

Third quarter: payment deadline – October 25;

Fourth quarter: payment deadline is April 30 of the following year.