The conditions for the transition to a simplified tax system (STS) and tax rates under the simplified tax system are the few things that were left unchanged in the simplified tax system in 2019. There are many innovations under the simplified tax system in the coming year and they concern completely different aspects: payers of the simplified tax system will face changes in the reporting system, payments to extra-budgetary funds, a final and irrevocable transition to online cash registers and much more. We will tell you about the main changes in the article, and we will help you understand all the nuances during a free consultation. You can get it right now. Request a call back from a specialist and get answers to your questions.
Simplified tax system for individual entrepreneurs and legal entities: conditions of application in 2019
To be able to apply the simplified tax system, entrepreneurs must meet the following requirements:
- there should be no more than 100 employees;
- income should not exceed 150 million rubles;
- the residual value should also not exceed the limit of 150 million rubles.
Additional conditions have been established for organizations:
- according to Art. 346.12 of the Tax Code of the Russian Federation, based on the results of nine months of the year in which the organization submits a notice of transition to the simplified tax system, its income does not exceed 112.5 million rubles;
- the share of participation of other organizations does not exceed 25%;
- organizations that have branches cannot apply the simplified tax system.
The use of the simplified tax system relieves individual entrepreneurs from paying personal income tax, personal property tax, and VAT (with the exception of VAT paid when importing goods at customs, as well as when executing a simple partnership agreement or a property trust management agreement).
For organizations, the use of the simplified tax system replaces the corporate income tax (with the exception of the tax paid on income from dividends and certain types of debt obligations), corporate property tax, and VAT.
Tax rates for the simplified tax system depend on the object of taxation. If the object of taxation is “income,” the rate is 6% (tax is paid on the amount of income). The object of taxation “income minus expenses” assumes a rate of 15% (income reduced by the amount of expenses is taken into account).
Please note that in 2021, tax holidays continue to apply for individual entrepreneurs.
The simplified tax system does not exempt from the calculation, withholding and transfer of personal income tax from employees’ wages.
Interest rates
Almost every fiscal payment in 2021 was adjusted by officials to one degree or another. STS 2021 was no exception. However, the adjustments did not affect simplified tax rates.
So, taxpayers are given a choice. As an object of taxation, they can use either total income or the difference between income and expenses. Depending on the chosen object of taxation, the tax rate is determined. So, the simplified tax system rates 2021:
- 6% - if the taxpayer has chosen the object of taxation “Income”. This fiscal burden regime will be beneficial to those companies and merchants who incur minimal costs for doing business. For example, a company is engaged in providing legal advice.
- 15% - if the object of taxation is defined as the difference “Income minus expenses”. In this case, the income received can be reduced by the costs incurred in the reporting period to conduct the main activities. This regime will be beneficial to a manufacturing company, for example, an individual entrepreneur producing handmade toys.
Please note that the rate depends on the region of residence of the entrepreneur or the location of the organization. The authorities of the constituent entities of the Russian Federation have the right to reduce the current values to 1% and 5%, respectively.
Organizations and individual entrepreneurs using the simplified tax system have lost the right to reduced tariffs
Some “simplified” people, until recently, had the right to pay insurance premiums at a reduced rate - in the amount of 20% (in the Pension Fund of the Russian Federation - 20%, in the Federal Social Insurance Fund of Russia - 0%, in the Federal Compulsory Medical Insurance Fund - 0%). But the benefit applied only to those operating in the production and social spheres. Moreover, the share of income from this type of activity should have been at least 70% of the total amount of income, determined according to the rules of Art. 346.15 Tax Code of the Russian Federation. And income for the current year should not exceed 79 million rubles.
From January 1, 2021, the benefit for reduced tariffs will be transferred to a general basis, that is, the contribution rate for them increases to 30%.
Accounting for expenses for objects requiring state registration
The commented law excluded from Article 346.16 of the Tax Code of the Russian Federation the requirement that for objects subject to state registration, expenses are taken into account from the moment of receipt of a receipt for the submission of documents for such registration.
This change came into effect on September 29, 2021. This means that from this date, “simplified” companies can take into account the costs of purchasing real estate in the same way as the costs of purchasing movable fixed assets - after putting the object into operation and based on the amounts paid. Maintain tax and accounting records of fixed assets according to the new rules
Insurance premiums for individual entrepreneurs on the simplified tax system
In 2021, entrepreneurs will have to pay more insurance premiums, as their size has increased.
According to paragraph 1 of Art. 430 of the Tax Code, the amount of insurance contributions for compulsory pension insurance is now 29,354 rubles, if the income of an individual entrepreneur does not exceed 300,000 rubles.
If the income of an individual entrepreneur is more than 300,000 rubles, then the fixed amount of insurance premiums is calculated as follows: 29,354 rubles. + 1% of the amount of income exceeding RUB 300,000.
Insurance premiums for compulsory medical insurance in a fixed amount in 2021 will amount to 6,884 rubles.
simplified tax system 6% and property tax
The application of the simplified taxation system of 6% does not exempt the taxpayer from paying property tax in relation to those real estate objects whose base value is determined as cadastral. For individual entrepreneurs, property used in business activities will be taxable.
Such facilities, in particular, include offices (business centers or premises in them), shopping or administrative centers, as well as premises for the placement of public catering facilities or the provision of personal services to the population.
Read more about these objects in the material “For which real estate objects is the tax base calculated based on the cadastral value?”
Limits on insurance premiums
The maximum value of the base for calculating insurance contributions for compulsory pension insurance (MPI) and compulsory insurance in case of temporary disability and in connection with maternity will change in 2021. According to paragraphs. 3, 6 tbsp. 421 of the Tax Code of the Russian Federation, it is established annually by the Government of the Russian Federation.
The amount of the base for calculating insurance premiums in case of temporary disability and in connection with maternity is set at RUB 865,000. (Resolution of the Government of the Russian Federation dated November 28, 2018 No. 1426).
The maximum base for calculating insurance premiums for compulsory health insurance is determined for 2021 in the amount of 1,150,000 rubles.
What is the essence of the transition regime - MnFin's proposal
The transition regime will be available to organizations and businessmen on a simplified basis whose income during the year exceeded 150 million rubles. or the average number of employees has become more than 100 people. Now in such cases the taxpayer needs to get rid of the simplification. The rules will change in the future.
Taxpayers will be given the right, after violating the specified conditions, to apply the special regime for some more time, possibly until the end of the current period and during another or the next, but with payment of tax at increased rates.
But at the same time, if in the next tax period the company or entrepreneur again violates the conditions, taking into account their adjustments, the taxpayer will lose the right to apply the simplification.
To what extent will taxpayers be allowed to exceed the limits on the average number of employees and income in order to remain on the simplified tax regime? And what will be the increased rate for simplification?
The departments are still discussing these issues.
Online cash registers for the simplified tax system
From July 1, 2021, legal entities and individual entrepreneurs using the simplified tax system, providing services to the public and issuing BSO, will have to switch to online cash registers.
Previously, this had to be done by “simplified” employees providing catering services.
Questions and expert answers on online cash registers for the simplified tax system.
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The declaration will be canceled
A tax return under the simplified tax system is a special type of reporting that simplifiers submit once a year. The deadline for submission is 04/01/2019. However, tax officials proposed canceling the mandatory reporting.
But it’s too early to rejoice, the pleasant innovations will not affect all simplifiers, but only taxpayers under the simplified tax system “Income” who use online cash registers. Thus, information about all income-generating transactions of the taxpayer is automatically sent to the Federal Tax Service. This is provided by new generation cash register equipment (online cash register machines). Consequently, inspectors have all the necessary information to calculate the simplified tax system. This means that the declaration will simply duplicate the existing data, and they decided to cancel the report.
Certificate 2-NDFL is submitted in a machine-oriented form
Order of the Federal Tax Service of the Russian Federation dated October 2, 2018 No. ММВ-7-11/ [email protected] approved two forms of certificate. One is intended for employers submitting tax reports on paper (form 2-NDFL) and has a machine-oriented form. And the other is a certificate of income and tax amounts of an individual (issued to individuals upon application for presentation at the place of request).
Machine-oriented form 2-NDFL includes:
- main sheet (it reflects the amounts of income and personal income tax);
- application (it contains information about income and corresponding deductions, broken down by month of the tax period, indicating codes for types of income and codes for types of deductions).
Thanks to the machine-oriented form, tax authorities can now automate the process of scanning, recognizing and digitizing 2-NDFL certificates received on paper.
The Federal Tax Service warned that changing the 2-NDFL form will have virtually no effect on the employer, since XML files are generated using a special program.
Certificates using the new form will be submitted starting with reporting for 2021.
Innovations in taxation in simplified terms
The main innovations affected mandatory insurance contributions, since from 2021 for “simplified”:
- reduced rates on contributions for companies using the simplified tax system have been cancelled;
- fixed payments for contributions for individual entrepreneurs on a “simplified” basis have been increased;
- The annual limits on payments to individuals have increased, at which companies and individual entrepreneurs must accrue contributions to compulsory pension insurance and compulsory social insurance for sick leave and maternity leave.
All “simplified” changes are summarized in a table.
Table. New in taxation in 2021 for the simplified tax system
| New in taxation in 2021 for the simplified tax system | Details | Useful |
| State registration of business simplified | ||
| The fee for registering companies and entrepreneurs has been abolished | There is no fee charged for online registration:
| Registering a business for free is possible only online |
| Insurance of accounts and deposits of businessmen | ||
| Bank accounts and deposits of companies and entrepreneurs classified as small businesses are insured | On the simplified tax system, from January 1, 2021, account or deposit insurance is valid for an amount of up to RUB 1,400,000. — by analogy with bank deposits of individuals. | A small business can return funds from an account or deposit if:
|
| Application of online cash registers in a simplified taxation system | ||
| The deferment for cash registers ends for companies and entrepreneurs using the simplified system | From July 1, 2021, companies and individual entrepreneurs using simplified banking systems that serve the population must conduct payments only through online cash register systems. | Under the simplified tax system, you can take into account the costs of purchasing a cash register, fiscal drive and software, as well as delivery, setup, FD operator services and other related costs. |
| Insurance premiums for “simplified” | ||
| Reduced contribution rates canceled | This abolition of the contribution benefit means that employees and other individuals are no longer able to pay reduced contributions from remuneration for those types of activities specified in Article No. 427 of the Tax Code of the Russian Federation. | Data must now calculate and pay contributions for compulsory health insurance, compulsory medical insurance and compulsory social insurance for disability and maternity at general rates. |
| Increased annual payment limits for calculating contributions | From January 1, 2021, the annual amounts of payments to employees and other individuals for which companies and individual entrepreneurs must accrue contributions will increase. Now the payment limits to these persons are:
| For compulsory pension insurance, contribution rates change when the annual maximum is reached and are:
For OSS, contribution rates are reset to zero when the annual limit is reached, and for payments up to RUB 865,000. – tariff 2.9% |
| Annual fixed contribution payments have increased | Entrepreneurs who use the simplified system and conduct business alone will pay more contributions to compulsory health insurance and compulsory medical insurance. | The annual contributions of individual entrepreneurs will be:
|
| Voluntary contributions to compulsory social security of individual entrepreneurs on the “simplified” system have been reduced | The reduction in contributions applies to those “self-employed” individual entrepreneurs on the “simplified” system who voluntarily pay “for themselves” contributions to compulsory pension insurance. | The new limit is the product of 12 minimum wages (at the beginning of 2021) and the contribution rate for compulsory pension insurance. |
| Assessment of working conditions | ||
| The results of workplace certification have been canceled | Certification is being replaced by a special assessment of working conditions. By the 1st, all employers must conduct a special assessment and have supporting documents. | If during the special assessment process special working conditions are identified, the employer is obliged to take additional actions in relation to these employees, including:
|
| Leave for parents with many children | ||
| Parents with many children received preferential leave rights | Employees who have 3 or more children under the age of 12 can go on vacation at any time convenient for them. | An employer does not have the right to refuse an employee with many children. |
| Protection of the rights of pre-retirees | ||
| Criminal liability has been established for violations of the labor rights of people of pre-retirement age | are subject to criminal prosecution if:
| Pre-retirees are older people who have no more than 5 years left before reaching general or early retirement. |
| Weekends for medical examination | ||
| Employees are allowed to take days off to undergo medical examinations | Employees can take one paid day off for medical examination in 3 years, while pensioners and pre-retirees working under employment contracts can take 2 paid days off per year. | Weekends are paid according to the average salary based on:
|
| Increasing the minimum wage | ||
| The minimum wage was increased to 11,280 rubles. | The new minimum wage is equal to the cost of living in the Russian Federation for 2 quarters. 2018 | For comparison, before this the minimum wage was 11,163 rubles. |
| VAT | ||
| Under the simplified tax system, there are fewer reasons to act as a VAT agent | Russian customers – companies and individual entrepreneurs using the simplified tax system – are not considered VAT agents when paying foreign providers for electronic services. These are services that are provided from abroad remotely, via the Internet. | If in 2021 a Russian customer of services using the simplified tax system withholds and pays agency VAT, then it will not be possible to accept the tax as a deduction. |
| Import VAT is being restored | Legal entities and entrepreneurs must restore the tax on a “simplified” basis when purchasing goods imported from abroad through budget subsidies or government investments. | VAT will have to be restored in cases where subsidies/investments were not targeted. |
| Personal income tax | ||
| Reporting on form 2-NDFL has been updated | In 2021, 2 separate forms of certificates were approved for the simplified tax system:
| Now you only need to submit a certificate in form 2-NDFL to the tax office, starting with the report for 2021. Employees must be issued a certificate of a different type - from Appendix 5 to the order dated 10/02/18 No. ММВ-7-11 / [email protected] |
| New social deduction approved | A person who spends money on charity can reduce his taxable income. This deduction can reach 30% of an individual’s taxable annual income. | A necessary condition for such a deduction is that donations must be addressed to:
|
| Property tax for companies using the simplified tax system | ||
| There is no tax on movable objects | The residual value of movable property no longer needs to be taken into account when calculating tax. | An object is considered movable if it:
|
| Reporting on “property” tax has been updated | Changes in reporting under the simplified tax system from January 1, 2021 - new forms of declaration and advance calculation of property tax for all periods of 2021, including the report for the 1st quarter. | Changes occurred in sections 2, 2.1 and 3. The following indicators appeared in the reporting:
|
| Transport tax under the simplified tax system | ||
| The calculation of this payment has been clarified | There is a ban on taking into account fees for damage to roads from “heavy trucks” when calculating taxes. | Payment for damage to roads is now fully included in the costs of the “simplified” procedure. |
Insurance of accounts and deposits of small businesses
According to Federal Law No. 322-FZ dated August 3, 2018, from January 1, 2019, the system of insurance of deposits and accounts of individuals in Russian banks extended to micro-enterprises and small businesses. The right to receive an insurance payment in the event of revocation of a bank's license arises if, on the day the insured event occurs, information about the enterprise is contained in the Unified Register of Small and Medium-Sized Enterprises.
Learn more about how to get a refund on your deposits.
Who is not entitled to apply the simplified tax system
The ban on using the simplified tax code applies to certain taxpayers. They do not have the right to apply the simplified taxation system (clause 3 of Article 346.12 of the Tax Code):
- banks;
- insurers;
- NPFs and investment funds;
- professional participants in the securities market;
- producers of excisable goods;
- pawnshops;
- those who extract and sell minerals not included in the list of commonly occurring ones;
- gambling organizers;
- private notaries, lawyers;
- participants in production sharing agreements;
- paying the unified agricultural tax (UST);
- microfinance, government, budgetary, foreign organizations;
- recruitment/employment agencies;
- companies with branches;
- organizations with a participation share of other legal entities exceeding 25 percent.
The last paragraph does not apply for the following cases:
- when an organization was created with contributions from public organizations of disabled people, it has at least half of its employees with disabilities, and their share is a quarter or more of the total payroll;
- for non-profit organizations, including consumer cooperation;
- when an economic society or partnership is established by budgetary and autonomous scientific societies or budgetary and autonomous educational institutions of higher education for the practical application of scientific developments, the exclusive rights to which belong to these societies.
Other things to remember
The transition to the “simplified” system is possible only if a notification is submitted to the Federal Tax Service before the end of the year preceding the transition. There is no opportunity to switch to the simplified tax system in the middle of the year.
If the company decides to cancel the application of the simplified tax system, this can be done before January 15 of the current year (Article 346.13 of the Tax Code of the Russian Federation, clause 6). Based on the meaning of this article, we can conclude that a “reverse” transition is possible even for companies in which the simplified tax system was only planned for use. In this case, notification to the Federal Tax Service is also necessary, otherwise legal proceedings cannot be avoided.
