Income or income minus expenses? This is a question that every entrepreneur asks himself when choosing a simplified tax system. The wrong answer will affect the profitability of the business, and you will only be able to change your decision next year.
With such consequences, you don’t want to make a mistake with your choice. Therefore, let's figure out how to choose the right simplified version in order to pay the state less and make more profit.
What is a simplified tax system of 15 percent
As you know, the simplified taxation system is a special tax regime. For organizations, it involves replacing with a single tax such taxes as (clause 2 of Article 346.11 of the Tax Code of the Russian Federation):
- income tax;
- property tax;
- VAT.
In some situations, all of these taxes still need to be paid.
Read about exceptions in our materials:
- «Income tax under the simplified tax system (nuances)»;
- “VAT under the simplified tax system: in what cases to pay and how to take into account the tax in 2021 - 2021?”;
- “How to pay property tax under the simplified tax system in 2021 - 2020?”
The simplified tax system of 15 percent is a type of “simplified tax”, in which the single tax is calculated from the difference between income and expenses at a rate of 15% (clause 2 of article 346.18, clause 2 of article 346.20 of the Tax Code of the Russian Federation).
When applying a simplified taxation system (with any object), the payer must calculate and pay advance payments no later than 25 days after the end of 1, 2, 3 quarters. At the end of the year, the balance of the tax is paid (no later than March 30 by legal entities and no later than April 30 by individual entrepreneurs) and a declaration is submitted.
For whom and why the deadlines for paying taxes and advances under the simplified tax system have been extended in 2021, find out here.
If at the end of the year the tax base turns out to be very small or if the expenses taken into account when calculating the tax exceed the income received, then it will not be possible to pay the tax in accordance with the calculation made or avoid paying the tax. The fact is that a feature of tax payment for payers using the simplified taxation system “income minus expenses” is the need to compare the tax calculated at the end of the year at a rate of 15% and the minimum tax calculated as 1% of the amount of income received for the year. If the calculated minimum tax is greater than the tax calculated in the usual manner, then a mandatory minimum tax is subject to payment.
NOTE! When forming the amount of the minimum tax to be paid, the amount of calculated advance payments must be subtracted from its calculated amount. This procedure follows from clause 5.10 of the procedure for filling out a declaration under the simplified tax system (approved by order of the Federal Tax Service of Russia dated February 26, 2016 No. ММВ-7-3/ [email protected] ).
You can read about the composition and features of filling out a declaration under the simplified tax system, and also download the form in the article “Declaration form under the simplified tax system for 2021 - 2021.”
You will find a line-by-line algorithm for filling out a declaration under the simplified tax system in ConsultantPlus, having received free trial access to the system.
Our calculator “STS Calculator 15%” will help you calculate the tax.
General information about the simplified tax system 2021
If you find the simplified system beneficial and convenient for yourself, we suggest that you familiarize yourself with it in more detail, for which we turn to the original source, i.e. Chapter 26.2 of the Tax Code of the Russian Federation. We will begin our acquaintance with the simplified tax system with who can still apply this taxation system.
May apply simplified tax system in 2021
Taxpayers under the simplified tax system can be organizations (legal entities) and individual entrepreneurs (individuals), if they do not fall under a number of restrictions listed below.
An additional restriction applies to an already operating organization, which can switch to a simplified regime if, based on the results of 9 months of the year in which it submits a notice of transition to the simplified tax system, its income from sales and non-operating income did not exceed 112.5 million rubles. These restrictions do not apply to individual entrepreneurs.
The list of categories of taxpayers who do not have the right to work on the simplified tax system is given in Art. 346.12 (3) Tax Code of the Russian Federation. In particular, the following types of organizations cannot work on the simplified system:
- banks, pawnshops, investment funds, insurers, non-state pension funds, professional participants in the securities market, microfinance organizations;
- organizations with branches;
- state and budgetary institutions;
- organizations conducting and organizing gambling;
- foreign organizations;
- organizations - participants in production sharing agreements;
- organizations in which the share of participation of other organizations is more than 25% (with the exception of non-profit organizations, budgetary scientific and educational institutions and those in which the authorized capital consists entirely of contributions from public organizations of disabled people);
- organizations whose residual value of fixed assets is more than 150 million rubles.
Cannot apply simplified tax system in 2021
Organizations and individual entrepreneurs also cannot apply the simplified tax system:
- producing excisable goods (alcohol and tobacco products, cars, gasoline, diesel fuel, etc.);
- extracting and selling minerals, except for common ones, such as sand, clay, peat, crushed stone, building stone;
- switched to a single agricultural tax;
- having more than 100 employees;
- those who did not report the transition to the simplified tax system within the time limits and in the manner established by law.
The simplified tax system also does not apply to the activities of private notaries, lawyers who have established law offices, and other forms of legal entities.
To avoid a situation in which you cannot apply the simplified tax system, we recommend that you carefully select OKVED codes for individual entrepreneurs or LLCs. If any of the selected codes corresponds to the activities above, then the tax office will not allow reporting on it to the simplified tax system. For those who doubt their choice, we can offer a free selection of OKVED codes.
Free selection of OKVED
Object of taxation on the simplified tax system
A distinctive feature of the simplified tax system is the possibility for the taxpayer to voluntarily choose the object of taxation between “Income” and “Income reduced by the amount of expenses” (more often called “Income minus expenses”).
The taxpayer can make his choice between the objects of taxation “Income” or “Income minus expenses” annually, having previously notified the tax office before December 31 of his intention to change the object from the new year.
Note: The only limitation on the possibility of such a choice applies to taxpayers who are participants in a simple partnership agreement (or joint activity), as well as a property trust management agreement. The object of taxation under the simplified tax system for them can only be “Income minus expenses.”
Tax base for the simplified tax system
For the object of taxation “Income” the tax base is the monetary expression of income, and for the object “Income minus expenses” the tax base is the monetary expression of income reduced by the amount of expenses.
Articles 346.15 to 346.17 of the Tax Code of the Russian Federation specify the procedure for determining and recognizing income and expenses in this regime. The following are recognized as income under the simplified tax system:
- income from sales, i.e. revenue from the sale of goods, works and services of own production and previously purchased, and revenue from the sale of property rights;
- non-operating income specified in Art. 250 of the Tax Code of the Russian Federation, such as property received free of charge, income in the form of interest on loan agreements, credit, bank account, securities, positive exchange rate and amount differences, etc.
Expenses recognized under the simplified system are given in Art. 346.16 Tax Code of the Russian Federation.
Tax rates for the simplified tax system
The tax rate for the simplified tax system Income option is generally equal to 6%. For example, if you received income in the amount of 100 thousand rubles, then the tax amount will be only 6 thousand rubles. If the rate is reduced in your region, the tax will be even less.
The usual rate for the simplified taxation system “Income minus expenses” is 15%, but regional laws of constituent entities of the Russian Federation may reduce the tax rate to 5% to attract investment or develop certain types of activities. You can find out what rate is in force in your region at the tax office at your place of registration.
Individual entrepreneurs registered for the first time on the simplified tax system can receive tax holidays, i.e. the right to work at a zero tax rate if a corresponding law has been adopted in their region.
Which object to choose: simplified taxation system Income or simplified taxation system Income minus expenses?
There is a fairly conditional formula that allows you to show at what level of expenses the amount of tax on the simplified tax system for Income will be equal to the amount of tax on the simplified tax system for Income minus expenses:
Income*6% = (Income – Expenses)*15%
In accordance with this formula, the amount of the simplified tax system will be equal when expenses amount to 60% of income. Further, the greater the expenses, the less tax will be payable, i.e. with equal incomes, the simplified tax system Income minus expenses option will be more profitable. However, this formula does not take into account three important criteria that can significantly change the calculated tax amount.
1. Recognition and accounting of expenses for calculating the tax base on the simplified tax system Income minus expenses:
- Expenses for the simplified tax system Income minus expenses must be properly documented. Unconfirmed expenses will not be taken into account when calculating the tax base. To confirm each expense, you must have a document confirming its payment (such as a receipt, account statement, payment order, cash receipt) and a document confirming the transfer of goods or the provision of services and performance of work, i.e. invoice for transfer of goods or act for services and works;
- Closed list of expenses. Not all expenses, even correctly documented and economically justified, can be taken into account. A strictly limited list of expenses recognized for the simplified tax system Income minus expenses is given in Art. 346.16 Tax Code of the Russian Federation.
- Special procedure for recognizing certain types of expenses. So, in order for the simplified tax system Income minus expenses to take into account the costs of purchasing goods intended for further sale, it is necessary not only to document the payment of these goods to the supplier, but also to sell them to your buyer (Article 346.17 of the Tax Code of the Russian Federation).
An important point is that sales does not mean the actual payment for the goods by your buyer, but only the transfer of the goods into his ownership. This issue was considered in Resolution of the Supreme Arbitration Court of the Russian Federation No. 808/10 dated June 29. 2010, according to which “... it does not follow from tax legislation that the condition for including the cost of purchased and sold goods in expenses is their payment by the buyer.” Thus, in order to offset the costs of purchasing a product intended for further sale, the simplifier must pay for this product, capitalize it and sell it, i.e. transfer ownership to its buyer. The fact that the buyer paid for this product will not matter when calculating the tax base on the simplified tax system Income minus expenses.
2. Possibility to reduce the single tax on the simplified tax system. Income from paid insurance premiums . It was already said above that in this mode the single tax itself can be reduced, and in the simplified taxation system Income minus expenses, insurance premiums can be taken into account when calculating the tax base.
✐ Example ▼
A newly opened intermediary working on the simplified tax system must calculate and pay the advance payment for the single tax for the 1st quarter. The amount of income received for the quarter is 300 thousand rubles. Correctly completed expenses included in the closed list amounted to 195 thousand rubles or 65% of income (i.e. we comply with the condition of the formula that expenses when choosing the simplified tax system Income minus expenses must exceed 60%):
- office rent – 30 thousand rubles
- purchase of a computer and other office equipment – 40 thousand rubles
- purchase of office supplies – 2 thousand rubles
- salary – 40 thousand rubles
- mandatory insurance premiums – 12 thousand rubles
- communication and Internet services – 6 thousand rubles
- transport maintenance costs - 20 thousand rubles
- advertising expenses (especially significant at the beginning of activity) - 45 thousand rubles.
If the Three Elephants organization had chosen the simplified tax system for income, then the advance payment for the single tax for the 1st quarter would have been 18 thousand rubles (300 thousand rubles * 6%). The single tax in this regime can be reduced by the amount of transferred insurance premiums (12 thousand rubles), but not more than 50% (18 thousand rubles – 12 thousand rubles < = 18 thousand rubles * 50%, so 18 is selected thousand rubles * 50% = 9 thousand rubles). Total: the amount of the advance payment to be paid will be only 9 thousand rubles.
If the simplified tax system Income minus expenses option was chosen, then the tax base will be 105 thousand rubles. (income 300 thousand rubles minus expenses 195 thousand rubles), and the amount of the advance payment is 105 thousand rubles. *15% = 15,750 rubles.
Thus, we have shown that the formula will not always be correct for expenses exceeding 60% of income. In fairness, it must be said that taking into account insurance premiums when calculating the single tax will be of serious importance only for small incomes. It is possible to reduce the advance tax payment by up to 50%, but only due to the amounts of paid insurance premiums for wages, which are not significant for a well-functioning company.
3. Reducing the regional tax rate for the simplified tax system Income minus expenses from 15% to 5%.
If your region has adopted a law establishing a differentiated tax rate for taxpayers using the simplified tax system in 2021, then this will be a plus in favor of the simplified tax system Income minus expenses option, and then the level of expenses may be even less than 60%.
✐ Example ▼
Let's assume that ours has chosen the simplified tax system Income minus expenses, the tax rate for which in the region was only 5%. For example, let’s remove some of the expenses so that their share is less than 60%, i.e. only 160 thousand rubles.
- office rent – 30 thousand rubles
- purchase of a computer and other office equipment – 40 thousand rubles
- purchase of office supplies – 3 thousand rubles
- salary – 20 thousand rubles
- mandatory insurance premiums – 6 thousand rubles
- communication and Internet services – 6 thousand rubles
- transport maintenance costs – 15 thousand rubles
- advertising expenses – 40 thousand rubles.
The tax base when calculating on the simplified tax system Income minus expenses will be 140 thousand rubles (300 thousand rubles of income minus 160 thousand rubles of expenses), and the amount of the advance tax payment is only 7 thousand rubles (140 thousand rubles * 5%).
But when calculating the advance payment using the simplified tax system, the income tax will be one and a half times higher: 18 thousand rubles. (300 thousand rubles * 6%) minus paid insurance premiums, i.e. 6 thousand rubles = 12 thousand rubles.
Thus, it becomes clear that when choosing an object of taxation on a simplified system, it is necessary to take into account a number of factors, each of which can become key.
Calculate the advance payment according to the simplified tax system
The procedure for switching to the simplified tax system
Newly registered business entities (individual entrepreneurs, LLCs) can switch to the simplified tax system by submitting a notification no later than 30 days from the date of state registration. Such a notification can also be submitted to the tax office immediately along with documents for registering an LLC or registering an individual entrepreneur. Most inspectorates request two copies of the notification, but some Federal Tax Service Inspectors require three. One copy will be given back to you with a tax office stamp.
If a taxpayer’s income under the simplified tax system exceeds the limits on income and number of employees, then he loses the right to use the simplified system from the beginning of the quarter in which the excess was made.
In our service you can prepare a free notification of the transition to the simplified tax system (relevant for 2021):
Create an application for the simplified tax system for free
Examples of documents:
Notification of transition to simplified tax system (form)
Example of a notice of transition to the simplified tax system for an LLC
Example of a notification about the transition to the simplified tax system for individual entrepreneurs
Already operating legal entities and individual entrepreneurs can switch to the simplified tax system only from the beginning of the new calendar year, for which they must submit a notification no later than December 31 of the current year (notification forms are similar to those indicated above).
What are the advantages of working on the simplified tax system 15%
Of course, working on the simplified tax system of 15% “income - expenses” is beneficial, because in comparison with the general taxation system, it significantly reduces the tax burden, and also reduces the labor intensity of accounting and reporting work.
For more details see:
- «How does the simplified tax system differ from OSNO? Which is more profitable? »;
- «The procedure for maintaining accounting records under the simplified tax system (2020)»;
- «Accounting for an LLC using the simplified tax system: submitting reports».
Unlike the UTII system, the simplified system allows you to pay tax on the actual revenue received, and not on the basis of virtual imputed income.
See “ UTII taxation system: pros and cons of imputation ” .
It differs from its “sister” – the “simplified” 6% in that it makes it possible to reduce the tax burden through expenses.
See “ STS “income” in 2019 - 2021 (6 percent): what do you need to know? " .
Benefits for payers working on a patent
The patent taxation system (hereinafter referred to as PSN) is applied by individual entrepreneurs along with other taxation regimes in relation to the types of activities provided for in paragraph 2 of Art. 346.43 Tax Code of the Russian Federation. For example, in relation to:
- public catering services provided through public catering facilities that do not have a customer service area;
- services for slaughter, transportation, distillation, grazing;
- production of leather and leather products;
- production of dairy products;
- production of bakery and flour confectionery products;
- services (performance of work) for the development of computer programs and databases (software and information products of computer technology), their adaptation and modification;
- repair of computers and communications equipment.
The laws of the constituent entities of the Russian Federation may establish a tax rate of 0% for taxpayers - individual entrepreneurs registered for the first time after the preferential laws of the constituent entities of the Russian Federation came into force (clause 3 of Article 346.50 of the Tax Code of the Russian Federation). At the same time, the activities of the individual entrepreneur must be carried out in a certain area: production, scientific, social, and the share of profit received from the implementation of this activity must be at least 70% of the total total income.
For example, the Law of the Republic of Bashkortostan dated April 28, 2015 No. 221-z provides for tax holidays for individual entrepreneurs on a patent for the period from May 11, 2015 to December 31, 2020. Tax holidays are also provided for individual entrepreneurs registered in Moscow and carrying out certain types of activities in the period from March 25, 2015 to December 31, 2020 (Moscow Law of March 18, 2015 No. 10).
Who is not suitable for the “simplified” 15 percent and what are its disadvantages
First of all, the simplified taxation system is not suitable for those who do not meet the general conditions of its application: annual income, number limit, threshold for the cost of fixed assets and other restrictions established by Art. 346.12 Tax Code of the Russian Federation.
See also “Types of activities falling under the simplified tax system in 2020.”
Since the rate of the “income-expense” simplification is higher than the rate under the simplified tax system “income”, it will not suit those whose share of expenses is small. It is also important here that under simplified tax system 15, not all expenses can be taken into account, but only those that are directly indicated in paragraph 1 of article. 346.16 Tax Code of the Russian Federation.
See also “ Which object under the simplified tax system is more profitable - “income” or “income minus expenses”? " .
In addition, the simplified tax system of 15% (as well as the simplified tax system of 6%) may be disadvantageous for those whose counterparties are VAT payers interested in tax deductions. Of course, in order to maintain partnership relations, taxes can be imposed on such buyers, but only as an exception. After all, it entails the obligation to pay tax to the budget (clause 5 of Article 173 of the Tax Code of the Russian Federation), and if this is done en masse, then the meaning of using the “simplified tax” is lost.
All the nuances of issuing an invoice under the simplified tax system were explained by ConsultantPlus experts:
Get a free trial access to K+ and see the answers to all these questions.
Tax holidays
Individual entrepreneurs applying the simplified tax system with the taxable object “income” from January 1, 2015, have the right to apply a 0 rate, provided that the relevant law is adopted by the constituent entities of the Russian Federation.
In order to take advantage of the benefit, an individual entrepreneur must fulfill a number of conditions:
- entrepreneurial activity must be carried out in the production, social and (or) scientific spheres, as well as in the field of consumer services;
- The individual entrepreneur was registered for the first time and registered with the Federal Tax Service after the relevant law of the constituent entity of the Russian Federation came into force.
For example, the Law of the Sverdlovsk Region dated March 20, 2015 No. 21-OZ established a tax rate of 0% for first-time registered taxpayers - individual entrepreneurs carrying out one or more of the following types of business activities included in the class “Food production”, “ Production of textiles”, “Production of clothing”, into the group “Production of soft drinks; production of mineral waters and other bottled drinking waters” in accordance with federal legislation establishing the classification of types of economic activities, etc.
Results
The use of the simplified tax system of 15% makes it possible to reduce the labor intensity of not only accounting work, but also the tax burden for taxpayers with a fairly high share of expenses that are taken into account when calculating the single tax. However, it will not be possible to completely avoid paying tax, since the law establishes a requirement to pay a minimum tax if the tax base is low or negative.
Sources: Tax Code of the Russian Federation
You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.
Personal income tax
It is paid at the expense of the employee, that is, it is deducted from the salary that was accrued to him. In this case, you are just a tax agent. That is, from a salary of 10 thousand rubles, your employee will receive 8.7 thousand, and you will transfer 1.3 thousand to the budget.
Transferring the responsibility to independently calculate and pay personal income tax to an employee is illegal. Even if you write it in the contract.
It is also prohibited to pay personal income tax at the expense of the employer.
The payroll tax rate is 13%. For non-residents of the Russian Federation – 30%.
Please note that not all amounts you pay to employees are taxable. Maternity assistance up to 4,000 rubles, daily allowance up to 700 rubles, some types of benefits and compensation payments are not taxed. For a complete list of non-taxable income, see Article 217 of the Tax Code of the Russian Federation.
When to pay personal income tax
No later than the next day after payment of wages (bonuses).
The deadline for vacation pay and temporary disability benefits is the last day of the month in which they were paid.
What about the advance payment?
By law, wages must be paid twice a month. There is no need to withhold personal income tax from the first part, the so-called advance payment. The entire tax is paid after the payment of the second part, that is, the final payment for the month.
Example:
Perevozchik LLC employs a driver. Salary – 35 thousand rubles. Paid in two installments on the 20th and 5th. The driver received the first part of his earnings for April in the amount of 17,500 without tax deduction on April 20, and from the second the employer withheld personal income tax from the entire amount of 35,000 x 13% = 4,550, and on May 5 the driver received 17,500 - 4,550 = 12,950 rub.
Things are different if the advance is paid on the last day of the month. Then, according to the explanations of the Ministry of Finance dated November 23, 2016 No. 03-04-06/69181, you need to immediately withhold tax from it and transfer it to the budget no later than the next day, and transfer the tax from the second part after the final payment for the month.
To avoid confusion and unnecessary hassle, it is better, if possible, not to leave the advance payment until the last day of the month, but to transfer it earlier.
