Does the individual entrepreneur pay income tax? Does an individual entrepreneur pay income tax under the simplified tax system: payment conditions Should an individual entrepreneur pay personal income tax under the simplified tax system?
10May
Hello! In this article we will talk about paying taxes and filing reports for individual entrepreneurs without employees in all taxation systems for 2019.
Today you will learn:
- without employees;
- How much are mandatory contributions?
- How to report to the tax authorities.
How taxpayers replenish the budget
The general tax system called has the highest tariffs, and therefore is used by individual entrepreneurs. It is rare to find her among individual entrepreneurs without employees.
However, in practice, OSNO is automatically assigned to any entrepreneur upon registration. And if for some reason you did not write an application to use a different fee system, you will pay taxes according to OSNO.
If your state does not have employees, then you only need to pay one tax:
- In the amount of 6% of revenue (and all income of the enterprise is taken into account here);
- In the amount of 15% of the difference between income and expenses.
One of the frequently used taxes is. The individual entrepreneur who uses it pays 15% of the basic income multiplied by special coefficients.
Individual entrepreneurs engaged in the field of agricultural products are paid. It is calculated at 6% of the difference between the income and expenses incurred by the entrepreneur.
A relatively new area for entrepreneurs is working with a patent (). Here a single tax is paid in the amount of 6% of potential income from activities in the region.
Local authorities can change the tax rate down to 0%. These are the so-called ones, which give the right not to pay funds to the budget in the first two years after.
In addition to the listed rates, individual entrepreneurs pay additional tax payments depending on the type of activity. For example, transport tax must be paid if the company uses a car for commercial purposes, you pay land tax when using the site, and so on. These fees do not depend on the current tax system and are applied in conjunction with any of them.
If an individual entrepreneur does not have employees, then he does not need to pay personal income tax in the amount of 13% for hired workers. This tax is not paid for yourself. Pension contributions are made through mandatory contributions. The latter will be discussed further.
Contributions for yourself
Without employees, you are still required to transfer. In this case, the payment is transferred only for the owner of the individual entrepreneur.
It is necessary to transfer money to the pension and health insurance fund. Contributions to the Social Insurance Fund are voluntary, and therefore their use among individual entrepreneurs without employees is sporadic.
Previously, payments were made directly to extra-budgetary funds. Since 2017, there have been changes that have made the tax office an intermediary in such calculations. Now her accounts accumulate not only tax revenues, but also mandatory insurance contributions. This simplified control over taxpayers by government agencies.
Since 2018, contributions to the pension and health insurance fund have become fixed, regardless of the amount. This was done in the interests of entrepreneurs and in order to reduce the tax burden.
Their amount became equal to 36,238 rubles, including: 29,354 rubles paid for contributions to pension insurance and 6,884 rubles for medical insurance.
However, these are not final calculations. If at the end of the year the entrepreneur’s profit amount is more than 300,000 rubles, then 1% of the difference between the actual profit and 300,000 rubles is additionally paid to the pension fund. For example, your income for the year amounted to 485,000 rubles. In addition to 36,238 rubles, you will also pay (485,000 - 300,000) * 1% = 1,850 rubles.
Contributions of individual entrepreneurs without employees are subject to mandatory payment along with taxes. Every entrepreneur is obliged to transfer funds to insurance funds, regardless of whether he has made a profit or whether the individual entrepreneur operates only according to documents.
A fixed payment of 36,238 rubles must be made for 2019 by December 31, 2019. Payment of 1% for income over 300,000 rubles must be made before July 1, 2020.
There is also a maximum limit for funds that can be contributed to insurance funds. This amount is calculated as follows: 8 * 29 354 * 12 * 26% . Where 29,354 is a fixed amount deducted for pension insurance. The limit on the amount of contributions for 2019 will be 234,832 rubles. This amount includes both the fixed part and the percentage excess from income of more than 300 thousand rubles.
We report to the state
The activities of any entrepreneur are impossible without various calculations and correlation of income with expenses. You must declare your taxes and contributions to the appropriate authorities, having with you a form with calculations of the amounts. Each taxation system has its own reporting features.
We have prepared a table for you on the deadlines for submitting reports for 2019.
| Tax system | What kind of reporting? | Deadlines |
| OSN | (transmitted only in electronic format, starting from 2015) | For 2019 quarterly - April 25, July 25, October 25 and for the 4th quarter January 27, 2020 |
| OSN | ||
| OSN | (about future profits) | From one to 5 days after the end of the month in which the profit was made |
| simplified tax system | Until April 30, 2020 (for 2019) | |
| UTII | Once a quarter until April 22, July 22, October 21 and January 20, 2020 (for the 4th quarter of 2019) | |
| Unified agricultural tax | March 31, 2020 upon submission of the report for 2019 | |
| PSN | Not provided | — |
In addition to generally accepted reporting in the form of a declaration, each individual entrepreneur, regardless of the tax system, maintains internal reporting. By the end of the year, the book of income and expenses should be put in order: the tax office may need it at any time.
An individual entrepreneur without employees does not report to extra-budgetary funds. Such entrepreneurs have a responsibility only to the tax authority.
Now let's look at the tax payment dates and some.
Individual entrepreneur on OSNO without employees
If you practice OSNO, you can combine this taxation system with:
- UTII;
At the same time, separate reports are submitted for each tax and different calculations are made. We have listed payments to the tax authority for individual entrepreneurs on OSNO without staff in the table.
|
What taxes does an individual entrepreneur pay without employees? |
Bid |
Formula |
Individual entrepreneur reporting without employees and payment |
|
0%, 10% or 20% (depending on the product category) |
Product cost*20/120 |
Pay by the 25th day of the month following the reporting quarter |
|
|
For property |
Up to 2.2% (set by local laws) |
Depends on object criteria |
|
|
Personal income tax (from profit) |
(Income - expenses)*13% |
Pay advances based on quarterly notifications from the tax office before July 15, October 15 and January 15 |
If you are a taxpayer of other fees, then you must pay them in accordance with notifications from the tax office, and if there are none, on your own initiative.
Let's take an example of paying VAT in 2019. If you are a taxpayer of other fees, then you must pay them in accordance with notifications from the tax office, and if there are none, on your own initiative.
Example. You bought a product from a seller on OSNO for 15,700 rubles in February 2019. The product was sold in the same month for 20,000 rubles. VAT on the purchase price will be: 15,700*20/120 = 2,616.67 rubles. Now let's calculate the amount of tax that needs to be paid to the budget: 20,000 * 20/120 - 2,616.67 = 716.66 rubles. If there is no more turnover in the company, then this amount must be transferred to the budget before April 25, 2019.
OSNO adherents without employees have the opportunity to reduce personal income tax (profit) payable as follows:
- At the expense of social deductions for an individual (for example, for one’s own education or treatment in medical institutions for oneself and immediate relatives. The total amount of deductions cannot exceed 120,000 rubles combined with other expenses);
- Due to contributions to insurance funds paid quarterly.
Example. The total profit for the year was 743,000 rubles. Confirmed expenses associated with activities – 516,000 rubles. Contributions paid to insurance funds amount to 27,990 rubles. The total tax for the year is: (743,000 - 516,000 - 36,238)*13% = 24,799.06 rubles.
Taxes for individual entrepreneurs on the simplified tax system without employees
Taxes for individual entrepreneurs without employees include deductions from the company’s income. There are two tax calculations on the simplified tax system, which we have displayed in the table.
Example. In 2019, you earned 735,000 rubles of retained earnings. The simplified tax system “Income” is used. Therefore, the tax payable will be 735,000 rubles * 6% = 44,100 rubles. It is necessary to transfer funds to the tax account before April 30, 2020.
Using the simplified tax system, an individual entrepreneur without employees can reduce the amount of tax payable or the tax base. The first option is suitable for the simplified tax system “Income”, and the second – for “Income - expenses”.
Example. Let’s say an entrepreneur practices a simplified income tax without employees at a rate of 6%. Income for the year amounted to 692,000 rubles. Tax payable: 692,000 * 6% = 41,520 rubles. The individual entrepreneur paid contributions of 36,238 rubles for the year. He has the right to reduce the amount of tax by the entire amount of payment to extra-budgetary funds. We get a tax equal to: 41,520 - 36,238 = 5,282 rubles. If the amount of insurance premiums exceeds the tax, then the latter is not subject to payment.
If an entrepreneur applies the simplified tax system “Income - Expenses” at a rate of 15%, then the amount of insurance payments is deducted from the tax base.
Example. If income was 924,000 rubles for 12 months, expenses were 699,000 rubles, and contributions to funds were made for a fixed amount of 32,385 rubles, then the tax is calculated as follows: (924,000 - 699,000 - 36,238) * 15% = 28 314 rubles.
Individual entrepreneur reporting on UTII without employees
The use of UTII is limited to areas of activity that are specified in regional regulations.
To calculate the tax, the following formula is used:
B*FP*k1*k2*15%, where:
- B – basic profitability of one month per unit of physical indicator;
- FP is a physical indicator used for business purposes (this can be the area of a retail outlet, the number of stores, etc.);
- k1 – coefficient established on an annual basis by the Government;
- k2 – reduction coefficient registered once a year by local authorities (varies from 0.005 to 1).
Tax payment occurs in quarterly payments until the 25th day of the month following the end of the quarter. Let's look at paying taxes in 2019 using an example.
Example. Basic income for the 1st quarter of 2019 is 7,500 rubles monthly. The number of employees equal to 7 is used as a physical indicator. K1 for 2019 is 1.915, and as a basis for k2 we will take the value of 0.6. Imputed income, taking into account the number of people on staff, will be: 7,500 * 7 * 3 = 157,500 rubles per quarter. Next, we adjust the income by correction factors – K1, K2. The calculation is as follows: 157,500 * 1.915 * 0.6 = 180,968 rubles. And the last stage is the tax: 180,968 * 15% = 27,145 rubles.
According to UTII, individual entrepreneurs without staff have the opportunity to reduce the amount of tax on contributions to extra-budgetary funds. You can reduce the tax payment for the quarter in which the advance payment was made to extra-budgetary funds.
Example. You paid contributions in the first quarter in the amount of 7,000 rubles. Let's take the tax from the example above. For the first quarter it is equal to 27,145 rubles. Total amount to be paid including the contribution: 27,145 - 7,000 = 20,145 rubles.
Individual entrepreneur on the Unified Agricultural Tax without employees
Unified agricultural tax can be applied only by those individual entrepreneurs who conduct activities related to the production of agricultural products. With this taxation system, the process of doing business is significantly simplified due to minimal reporting and a low tax rate.
| Formula | Payment | Reports |
| (Income - expenses)*6% | Advance payments for half a year. The first payment for 2019 is due July 25, 2019, the final payment is due March 31, 2020 |
The declaration under the Unified Agricultural Tax is submitted before March 31 of the year following the reporting year. For 2019, the report must be submitted by March 31, 2020. |
| VAT – 20% (introduced from 01/01/2019. You can take advantage of the exemption in accordance with Article 145 of the Tax Code of the Russian Federation, paragraph 2, paragraph 1) | Payments are made quarterly, before the 25th day of the month following the reporting quarter. |
|
Let's look at the example of paying for the Unified Agricultural Tax in 2019 for an individual entrepreneur without staff.
Example. For the first 6 months of activity, the income amounted to 380,000 rubles. Expenses for this period were confirmed in the amount of 200,000 rubles. Income for 2019 was 625,000 rubles, and expenses were 392,000 rubles. Tax amount for the first half of the year: (380,000 - 200,000)*6% = 10,800 rubles. It must be paid by July 25, 2019. Annual tax that must be paid before March 31, 2020: (625,000 - 392,000)*6% - 10,800 = 3,180 rubles.
Individual entrepreneurs who practice unified agricultural taxation and do not have hired staff can reduce the tax base for contributions to extra-budgetary funds for themselves. The part of the payments that you made in advance can be taken into account as expenses.
Example. To calculate taxes, let's look at the previous example. The amount of income for the first 6 months of activity is 380,000 rubles, and expenses are 200,000 rubles. Let's say you paid 14,000 rubles in contributions. The tax payable will be: (380,000 - 200,000 - 14,000)*6% = 9,960 rubles.
Reporting of individual entrepreneurs on a Patent (PSN) without employees
PSN attracts many taxpayers due to its simplicity in tax calculation and the absence of a declaration. At the end of the reporting year, you will not need to submit documents to the tax office: you only need to extend the validity of the patent at your discretion.
Let's look at the main characteristics of this tax system using a table.
| Term | Payment | Formula | Reporting |
| 1 – 6 months | On any day of the patent's validity, including the date of its completion. Funds can be deposited in one amount or in advance payments | ||
| 7 – 12 months | In the first three months you need to pay 1/3 of the tax amount. Payment can be made on any day as a one-time payment or in installments. The remaining 2/3 – no later than the day the patent expires in one payment or in advance | Potential income (depending on the region, field of activity)*6% | KUDiR |
The amounts of “patent” tax have already been calculated. They can be found for any permitted activity on the tax website. A patent is not tied to a calendar year. You can start activities in the middle of any month and finish after the period for which the patent was purchased.
Example. A patent costs 72,000 rubles for 12 months. You bought it on January 12, 2019. For the first 90 days (until April 12, 2019), you must deposit an amount equal to: 72,000/3 = 24,000 rubles. It can be distributed monthly and paid for 8,000 rubles. The remaining amount to be paid, equal to 72,000 - 24,000 = 48,000 rubles, must be transferred to the tax service account before January 12, 2020. It can also be divided into the remaining 9 months and paid 6,000 rubles each (for an even calculation, payment will be limited to 8 months).
Supporters of the PSN need to know that the state has not provided for them to reduce the tax burden through insurance premiums. An exception can only be if you combine PSN with another tax system. Let's figure out how to reduce the tax of an individual entrepreneur without employees in this situation.
Payment of personal income tax is a mandatory condition for every citizen of the Russian Federation who receives a profit. However, the question of whether personal income tax for individual entrepreneurs is subject to the simplified tax system is of interest to many businessmen who have chosen a simplified taxation system. As you know, it is paid by employers, employees, and even those who receive income from outside sources. However, for some businessmen an exception has been made in tax legislation. Given this fact, many individual entrepreneurs are interested in the question of whether an individual entrepreneur pays income tax under the simplified tax system for himself.
"Simplified" and taxation
If a businessman does not want to spend a lot of time on reports, he tries to choose one of the simple tax regimes, of which there are 4 for individual entrepreneurs. One of the convenient options is the simplified tax system. The good thing about the simplified system is that the entrepreneur does not have to spend much time on reports, since everything comes down to one declaration, which is submitted once a year.
Businessmen who have chosen a simplified system have a choice between paying a single tax on all profits or only on net income, that is, minus expenses. At this point, for an individual entrepreneur using the simplified tax system, work with reports can be completed. The thing is that in a standard situation, other types of fees will not have to be paid to the state treasury. This also applies to personal income tax.
However, it must be taken into account that various situations occur in the work of an individual businessman. Some of them oblige an individual businessman who works on a simplified system to pay income tax.
Russian tax legislation states that individual entrepreneurs using the simplified tax system must pay only one tax at a fixed rate of 15 or 6%. At the same time, for all types of activities indicated in a special list, which is compiled at the stage of registration with the tax authority, there is no need to pay personal income tax for individual entrepreneurs using the simplified tax system. This is one of the main advantages of “simplified”.
However, in cases where an entrepreneur receives profit from activities that are not included in the list and the Unified State Register of Individual Entrepreneurs, he will have to pay income tax.
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In what cases is personal income tax paid using the simplified tax system?
Will not be exempt from paying income tax under the simplified tax system for individual entrepreneurs and in some other situations. For example, a businessman is in any case obliged to pay this tax if he receives a winning amount exceeding 4,000 rubles. We are talking about those promotions that are organized by manufacturers and trade organizations to attract interest in their products.
A simplified individual entrepreneur must pay income tax if he received a loan from a financial institution. The rate in this case will be 2/3 of the interest rate under the refinancing agreement. If the funds were issued in foreign currency, then the personal income tax amount will be equal to the difference between the contract rate and 9%.
In addition to the fact that an individual entrepreneur working under the simplified tax system must pay income tax on profits from activities that were not indicated during registration, funds received by the individual entrepreneur from other organizations must also be added to the tax base.
Here we are most often talking about interest on foreign currency deposits and dividends.
Interest rates are determined based on where the profit was earned. For personal income tax, 13% is mainly used, but for some profits larger payments are also provided. For example, from the material benefits received by participating in promotions and lotteries, individual entrepreneurs will have to pay 35% to the state treasury.
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Payment of income tax using the simplified tax system
As mentioned above, the simplified tax system relieves an entrepreneur of the need to pay personal income tax, but this applies only to the profit that was received from a specific type of activity specified when registering with the tax office. The remaining income of the individual entrepreneur will have to pay income tax on a general basis.
If businessmen working on the general tax system are required to pay personal income tax every quarter, then for those who have chosen the “simplified tax system” and received additional income on which they need to pay income tax, the frequency of this procedure does not exceed once a year.
An individual entrepreneur can pay until April 30 of the year following the expired tax period. In addition, he will have to file a personal income tax return. This must also be done no later than April 30.
In addition, it is worth noting that in a normal situation, an individual entrepreneur using a simplified taxation system does not have the opportunity to issue a deduction even when he has grounds for this.
In a situation where personal income tax has been paid to them, the businessman has the right to receive the due tax refund by filling out all the paperwork for this.
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Personal income tax for employees
Despite the fact that an individual businessman working on a simplified tax system does not have to pay income tax in most cases, if he has hired employees, then payments must be made for them.
If an entrepreneur registers with the Pension Fund as an employer, he becomes a tax agent for his employees. That is, his responsibilities now include paying contributions to funds and the state treasury for his employees.
Personal income tax is calculated based on the tax base. For hired employees, it is the salary accrued for the month. From this amount it is necessary to calculate income tax and pay it to the state budget. The interest rate is presented in two options. For residents of the Russian Federation it is 13%, and for non-residents of the country - 30%.
It is mandatory to submit a personal income tax return within the established time frame. It must be submitted to the tax office for review once a year.
In conclusion, it is worth noting that in all special regimes, including the simplified system, the payment of personal income tax for the individual entrepreneur himself is not provided. That is, income tax is not paid either on a patent, or on UTII, or when using the Unified Agricultural Tax. Mandatory transfer of 13% of all income is provided only under the general taxation system. But even here you need to take into account some nuances, since the interest rate can vary from 9 to 35%.
Personal income tax is one of the most important and mandatory types of tax. It must be paid by every citizen of the Russian Federation who receives a profit. And although this tax is mandatory for everyone, many are often interested in the question, does an individual entrepreneur pay income tax under the simplified tax system?
Payment of personal income tax must be made within a certain period of time by both entrepreneurs and employees. This requirement most often confuses many businessmen who decide to switch to a simplified taxation system.
"Simplified" and taxation
Individual entrepreneurs who do not want to spend a lot of time preparing reporting documentation most often think about using this taxation system. The only document that must be completed and submitted to the tax office in a timely manner is the declaration.
Having decided to use the ONS, an entrepreneur is faced with a choice. He must choose the tax rate. Each has its own advantages. Thus, tax deduction at one rate is carried out on the net amount of income, while another type of rate provides for tax deduction on total profit. After choosing a rate, all work with reports for the entrepreneur ends here. One of the tax rates used under the simplified tax system eliminates the need to pay a number of other taxes, including mandatory personal income tax.
And although when using the simplified tax system a merchant is not required to pay this tax, there are situations when, when using the simplified system, he still needs to make transfers of funds under personal income tax. The Tax Code of the Russian Federation says: when applying the “simplified taxation”, the individual entrepreneur uses one of the rates presented in this taxation system, namely 15% or 6%. These rates allow you to avoid paying other taxes.
When does a simplifier need to pay personal income tax?
Most often, a simplifier is faced with the mandatory payment of this type of tax when receiving profit from an activity that is not included in the list of the simplified tax system and the Unified State Register of Individual Entrepreneurs. But there may be other reasons. One of them is winning an amount exceeding 4,000 rubles. An entrepreneur can receive it by taking part in a promotion held by the manufacturer or trade organizations in order to increase interest in the products offered.
You will also need to pay tax in a situation with a borrowed amount taken from a financial institution. It is worth noting that in this case the tax rate paid will be 2/3 of the interest rate that was reflected in the refinancing agreement. This tax requirement applies to the amount borrowed in government currency. But if the amount was taken in foreign currency, then the personal income tax amount is taken from the difference obtained between the rate used, specified in the contract document, and 9%.
An individual entrepreneur working under the simplified tax system must also pay personal income tax in the case of interest and dividends received from foreign currency deposits. The rate used to calculate personal income tax is different in each deposit situation. In most types of profits, 13% is applied, but in some cases other interest rates are used. Thus, winnings received in a promotion or lottery are taxed at a rate of 35%.
Personal income tax payment
Every individual entrepreneur working under the simplified tax system, but who has received profit from a type of activity that is necessarily subject to personal income tax, has to deal with personal income tax. It is not difficult to understand the scheme for individual entrepreneurs working on the general taxation system with personal income tax. It provides for quarterly transfer of funds for the specified tax.
Simplified people who have received income eligible for personal income tax pay tax a little differently. In this case, it is transferred once a year until April 30 of the new year following the expired tax period. In addition to paying personal income tax, the individual entrepreneur is also required to submit a tax return with information about personal income by this deadline.
It is worth noting one more small nuance regarding deductions. Merchants operating under the simplified system are deprived of the right to apply for a deduction, even if there are compelling reasons for this procedure. But when paying personal income tax, the simplifier has the right to carry out the tax refund procedure. To do this, he will only need to prepare the appropriate documentation.
Wage-earners
Despite the fact that the simplified tax system eliminates the need to pay personal income tax, individual entrepreneurs also have to deal with it when hiring employees. By going through the registration procedure to obtain employer status, an individual entrepreneur becomes a tax agent for the workers he hires. With the receipt of this status, among his responsibilities, in addition to paying the simplified tax system, there is also the transfer of tax amounts to the budget for the employees working for him.
Despite the fact that the businessman in this situation is obliged to transfer personal income tax from the income of employees, he himself pays it only in the case of income received from sources and activities not included in the simplified tax system list.
What taxes does the individual entrepreneur pay?
Individual entrepreneurs in Russia can carry out their activities using tax systems that are regulated by the Tax Code of the Russian Federation.
In addition to the taxes that an individual entrepreneur pays when operating in one of the taxation systems, there are also mandatory taxes.
From our publication today, the reader will learn about what taxes an individual entrepreneur pays under different taxation systems.
What taxes does an individual entrepreneur pay in 2018 in all modes?
Regardless of what taxation regime an individual entrepreneur is in, under certain conditions he must pay taxes such as:
- Transport tax (Tax Code of the Russian Federation, Chapter 28, paragraph 2 of Article 362 and local laws);
- Customs duty (Customs Code of the Russian Federation, Chapter 27, Art. 318 - 319);
- Land tax (Tax Code of the Russian Federation, Chapter 31 and local laws);
- State duty (Tax Code of the Russian Federation, Chapter 25.3);
- Water tax (Tax Code of the Russian Federation, Chapter 25.2);
- Mineral extraction tax (Tax Code of the Russian Federation, Chapter 26);
- Tax for the use of fauna and aquatic biological resources (Tax Code of the Russian Federation, Chapter 25.1);
- Excise taxes (Tax Code of the Russian Federation, Chapter 22).
Value added tax (VAT) (Tax Code of the Russian Federation, Chapter 21);
Income tax (Tax Code of the Russian Federation, Chapter 25);
Personal income tax (Tax Code of the Russian Federation, Chapter 23);
Property tax for individuals (Tax Code of the Russian Federation, Chapter 32).
Taxation systems for individual entrepreneurs
Today the following tax regimes are in effect in the Russian Federation:
- Unified tax on imputed income (UTII);
- Simplified taxation system (STS);
- Patent taxation system (PTS);
- General taxation system (OSNO).
- Unified Agricultural Tax (USAT).
Each type of taxation requires the payment of certain taxes, the submission of tax reports, as well as the recording of strict reporting forms.
Let's take a closer look at what taxes an individual entrepreneur pays under each taxation regime.
What taxes does an individual entrepreneur pay on the Unified Tax on Imputed Income (UTI)?
The tax regime of UTII implies the payment of a single tax on imputed income - the possible income of the taxpayer minus the costs associated with making a profit.
The size of UTII is fixed and does not depend on the profitability or unprofitability of business activities.
Individual entrepreneurs on UTII do not pay the following taxes:
- income tax;
- property tax if local authorities have not established the cadastral value of the property;
Individual entrepreneurs pay a single tax on UTII, which does not depend on actual income. Payment is made quarterly by the 20th day of the month following the reporting quarter.
The reporting of individual entrepreneurs on UTII is as follows:
Additionally, if there are employees:
- reporting to the Pension Fund;
- reporting to the Social Insurance Fund;
- reporting to the Federal Tax Service (for employees).
The advantage of UTII for individual entrepreneurs is that this taxation system reduces contacts with fiscal services and replaces some taxes and fees. The single tax on imputed income is a very convenient tax regime for an individual entrepreneur due to the fact that it does not require full accounting.
UTII is the only taxation system that does not require maintaining KUDiR (Book of Income and Expenses).
Not all entrepreneurs can use UTII. The single tax on imputed income can only be applied by those individual entrepreneurs whose type of activity falls under UTII, namely:
- retail trade (a retail space with an area of no more than 150 sq. m);
- repair and maintenance;
- veterinarian services;
- transport storage;
- Passenger Transportation;
- transport advertising, placement and distribution of outdoor advertising;
- domestic services;
- catering (room area up to 500 sq. m);
- rental of living space, accommodation of residents (room area up to 500 sq. m);
- rental of retail space (without customer service areas).
When opening a partnership company, the use of UTII is unacceptable.
What taxes does an individual entrepreneur pay under the simplified taxation system (STS)?
Some taxes that are provided for by the Tax Code are not paid by individual entrepreneurs using the simplified tax system:
- personal income tax;
- property tax (if this property is not included in the cadastre).
Individual entrepreneurs who are on a simplified taxation system must pay advance contributions quarterly:
- for the first quarter;
- for the first half of the year;
- for IX months;
- in a year.
In accordance with the Tax Code of the Russian Federation, an individual entrepreneur under the simplified taxation system pays tax for the first three quarters no later than the 25th day of the month following the reporting month, and more specifically, no later than April 25, July 25, October 25. The deadline for paying individual entrepreneur tax on the simplified tax system for the fourth quarter (total for the year) is April 30 of the next year.
Annual reporting of an individual entrepreneur on the simplified tax system - declaration for the reporting period (for the year). The deadline for submitting a declaration for individual entrepreneurs is until April 30, 2018 for 2017.
Depending on the object of taxation (income or income minus expenses), a tax of 6% or 15% is paid. These are the maximum rates of the simplified tax system; since 2015, regional authorities have the right to reduce the rates of the simplified tax system at their discretion.
The simplified tax system is a special tax regime that is aimed at easing the tax burden for small and medium-sized businesses, as well as simplifying accounting and tax records.
Tax reporting for individual entrepreneurs using the simplified tax system is divided into two types:
- Quarterly reporting (if there are employees).
- Annual reporting (for yourself).
The procedure for submitting tax reports for an individual entrepreneur on a simplified taxation system without employees involves the provision of documents such as:
- declaration under the simplified tax system (including zero reporting of individual entrepreneurs) by April 30;
- book of accounting of income and expenses (KUDiR) (not submitted to the tax authority, kept by the individual entrepreneur in case of an audit).
The procedure for submitting tax reports for an individual entrepreneur using a simplified taxation system with employees:
- declaration under the simplified tax system until April 30;
- certificate of average number of employees until January 20;
- 4-FSS (report to the FSS) - quarterly;
- DAM (report to the Federal Tax Service) - quarterly;
- 2-NDFL - report to the Federal Tax Service - annually;
- 6-NDFL - report to the Federal Tax Service - quarterly;
SZV-M – report to the Pension Fund of Russia – monthly. In 2016 - until the 10th day of the month following the reporting month. In 2017, before the 15th day of the month following the reporting month;
Since 2017, contributions to pension, medical, and social insurance were transferred to the Federal Tax Service for administration. In this regard, from 2017, it will be necessary to submit a 4-FSS report in an abbreviated form to the Social Insurance Fund only for contributions for injuries and occupational diseases. In 2018, the 4-FSS report form has no changes compared to 2017.
For individual entrepreneurs using the simplified tax system, individual information on employees is provided quarterly on a mandatory basis.
What taxes does an individual entrepreneur pay under the patent taxation system (PTS)?
It should be noted that in 2017, individual entrepreneurs paid a fixed cost of a patent instead of a tax.
Since January 1, 2013, this principle has remained unchanged. It is described in the Tax Code of the Russian Federation (Chapter 26.5).
You can pay the cost of a patent in two times if the patent will work for 6 to 12 months:
- 1/3 of the amount must be paid no later than 90 calendar days from the date of commencement of business activities);
- 2/3 of the amount no later than the expiration date of the patent.
If a patent is purchased for a period of 1 to 6 months, then it must be paid no later than the end of its validity.
Individual entrepreneurs on the patent taxation system are exempt from paying:
- property tax (if it is not in the cadastral property list);
- income tax.
What taxes does an individual entrepreneur pay under the General Taxation System (OSNO)?
The traditional (general tax system) includes a complete list of taxes paid by both the taxpayer and the tax agent:
This taxation system is suitable for individual entrepreneurs whose majority of clients are legal entities (that is, VAT payers) or if an individual entrepreneur pays VAT at customs.
WHAT TAXES DOES AN INDEPENDENT PAY TO THE UNIFORM AGRICULTURAL TAX (UNIFIED AGRICULTURAL TAX)
The work of an individual entrepreneur on the Unified Agricultural Tax, in addition to certain restrictions, has an advantage in the amount of tax paid.
The calculation and payment of the unified agricultural tax consists of an advance and final annual tax.
The advance payment must be paid to the Federal Tax Service by July 25, calculating its amount for the six months from 01/01/2018 to 06/30/2018.
The final payment is due by March 31, 3018, based on the results of 2017, and by March 31, 2019, based on the results of 2018.
Before the same deadline - March 31, a declaration under the Unified Agricultural Tax is submitted. The declaration is submitted to the Federal Tax Service at the place of registration once a year, based on the results of the past year.
The unified agricultural tax is calculated based on the difference between income and expenses, multiplied by the tax rate. The tax rate is set by local authorities ranging from 6% to 0.5%.
As an employer, individual entrepreneurs at the Unified Agricultural Tax in 2018 pay insurance premiums on the basis common to all entrepreneurs:
- for compulsory health insurance;
- for compulsory pension insurance;
- for insurance for temporary disability and maternity;
- for insurance against accidents and injuries at work.
Just like other employers, individual entrepreneurs on the unified agricultural tax withhold and transfer to the budget personal income tax, calculated from the income of their employees.
Other taxes paid by individual entrepreneurs
It is worth emphasizing that, regardless of the taxation system applied by the individual entrepreneur, the individual entrepreneur is obliged to pay fixed contributions to the Pension Fund and the Federal Compulsory Compulsory Medical Insurance Fund.
Let us trace the growth trend of fixed contributions:
- in 2016, the amount of fixed contributions to the general public pension fund amounted to 19,356.48 rubles; for compulsory medical insurance – 3,796.85;
- in 2017, the amount of fixed contributions was: for pension insurance - 23,400 rubles, for medical insurance - 4,590 rubles;
- in 2018, individual entrepreneurs must pay: for pension insurance - 26,545 rubles, for medical insurance - 5,840 rubles.
Another type of tax is a trade tax. Currently, the obligation to pay for it rests only with entrepreneurs in Moscow. The trading fee is discussed in detail in this material.
The material has been edited in accordance with current changes in legislation 01/26/2018
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Income tax for individual entrepreneurs using the simplified tax system
Individuals who received income from transactions provided for by the Tax Code of the Russian Federation must pay personal income tax. The transfer of funds to the budget is usually carried out by enterprises themselves. In this article you will find out whether an individual entrepreneur pays income tax under the simplified tax system and what nuances need to be taken into account.
Types of modes
The procedure for calculating and paying taxes depends on the taxation regime. The activities of individual entrepreneurs (IP) allow them to use:
- STS – simplified taxation system. Suitable for small businesses with few employees. It is easy to keep records, especially for individual entrepreneurs.
- OSN – general taxation system. There are no restrictions on types of activities, number of employees and income. It is the most difficult in terms of reporting and calculating payments to the budget. Convenient for large companies.
- UTII is a single tax on imputed income. Offers “preferential” conditions for certain types of enterprises (catering, veterinary hospital, maintenance, etc.). Income is assessed by physical indicators. Replaces VAT, payments for used property, etc.
- PSN – patent system. Implies obtaining the right to conduct a certain type of activity for a period of up to one year. Simple and convenient, does not require filing declarations.
- Unified agricultural tax - unified agricultural tax. Designed for individual entrepreneurs and organizations involved in the production of crops, livestock products, etc.
Personal income tax for businessmen - “simplified”
When opening a certificate, all types of activities are included in a special list and the Unified State Register of Individual Entrepreneurs. The profit received from them is not subject to personal income tax - this is the advantage of using the “simplified” tax. If an entrepreneur receives income from a transaction that he did not declare during state registration, income tax is withheld.
Other cases involving the entry of personal income tax for individual entrepreneurs on the simplified tax system:
- Winning over 4000 rub. from participating in advertising campaigns of manufacturers or trade organizations.
- Getting a loan. The tax share is:
- 2/3 of the refinancing rate and interest prescribed in the agreement;
- the difference between 9% and the rate specified in the contract (for funds issued in foreign currency).
- Receipt of funds from third parties, foreign currency deposits, dividends.
Example 1
IP Krylov received a profit from dividends in the amount of 27,000 rubles. and a cash prize of 7,000 rubles. during an advertising campaign in the Volna company. The income tax on the material benefit received will be:
27,000 × 13% + 7,000 × 35% = 5,960 rub.
Personal income tax payment methods
Individual entrepreneurs on the OSN can make contributions to the budget for themselves in two ways:
Making advance payments based on notifications from the Federal Tax Service
The legislation establishes payment terms:
- before July 15 – six months;
- until October 15 – for the third quarter;
- until January 15 – for the fourth quarter.
Adjusting the amount
After submitting the declaration, a recalculation is made. For example, due to an increase or decrease in revenue by more than half. As a result, an additional payment or refund of funds from the budget occurs.
An employer using the simplified system withholds from employees’ salaries the amount in the amount of:
- 13% – for residents of the Russian Federation;
- 30% – for non-residents.
If there are no employees, this does not need to be done.
The calculation is made according to the general form:
Mon pr. month – income tax paid in the previous month.
Mon current month – payments in the current month.
NB beginning year = D – Deductions
NB beginning year – tax base required for calculation. It is taken from the beginning of the year to the previous, and then the current month.
D – income accrued from the beginning of the year and subject to tax withholding. Summarized for each month.
The declaration must be submitted to the Federal Tax Service no later than April 30 of the following year. The deadline for paying personal income tax for individual entrepreneurs using the simplified tax system for themselves is July 15. An entrepreneur has the right to receive deductions provided for:
- charity;
- education;
- pension insurance (voluntary);
- treatment;
- other cases provided for by the Tax Code of the Russian Federation.
Attention! Payers of personal income tax under the simplified tax system in 2018 do not take into account VAT when receiving income, as well as in expenses. The reason is an unjustified increase in the tax base.
Example 2
The director of the White Star company, who is an individual entrepreneur and uses the simplified system, has hired employees. Let's determine the amount of income tax that needs to be transferred to the budget on September 14, 2018.
Delivery driver Kozhikin. He receives a salary of 24,000 rubles and benefits from deductions for two minor children. The tax base (NB) and income tax for September were:
Should an individual entrepreneur pay personal income tax (cases and nuances)?
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Does individual entrepreneur pay personal income tax? - tax paid by individuals on different types of income? We will deal with this issue in the article, and also decide Should an individual entrepreneur pay personal income tax without employees?
Systems used by individual entrepreneurs for taxation
Individual entrepreneurs can apply one of the following taxation systems:
- STS (simplified taxation system);
- OSNO (general taxation system);
- UTII (single tax on imputed income);
- PSN (patent tax system)
- Unified Agricultural Tax (Unified Agricultural Tax).
Depending on the chosen system, it will be clear whether the individual entrepreneur must pay personal income tax.
Payment of personal income tax for individual entrepreneurs using the simplified tax system without employees
Does individual entrepreneur pay personal income tax using the simplified tax system? If an individual entrepreneur receives funds from those types of activities that are reflected in the Unified State Register of Individual Entrepreneurs, he does not pay this tax to the budget, since the application of the simplified tax system implies an exemption from personal income tax on income received from business activities (with the exception of income from dividends and income taxed at the personal income tax rate 35 and 9%). Grounds - clause 3 of Art. 346.11 Tax Code of the Russian Federation.
If an individual entrepreneur receives income not related to business activities, his income is taxed at a rate of 13% in the same way as the income of any individual. At the same time, an individual entrepreneur can reduce his income by using the right to a tax deduction.
If an individual entrepreneur does not use hired workers in his activities, then the personal income tax of the tax agent is not paid to him
If an entrepreneur has a new type of activity, then in order to avoid disputes with the tax authorities, it is necessary to pay personal income tax on income received from this type of activity before submitting an application to enter information about this type of activity into the Unified State Register of Individual Entrepreneurs.
When do you need to pay personal income tax for individual entrepreneurs using the simplified tax system?
An individual entrepreneur using the simplified tax system is required to pay personal income tax if he receives:
- Prizes from participation in a promotion carried out by product manufacturers or commercial enterprises. The accrual condition is winnings over 4 thousand rubles (clause 2 of article 224 and clause 28 of article 217 of the Tax Code of the Russian Federation).
- Material benefits from interest savings. The income on which tax will be paid is calculated based on the difference of 2/3 of the refinancing rate and the amount of interest specified in the agreement. If the loan is received in foreign currency, the yield is calculated based on 9% per annum minus the interest specified in the agreement (clause 2 of Article 212, 224 of the Tax Code of the Russian Federation).
- Interest on deposits in rubles and foreign currency. For interest received in rubles, non-taxable income will be calculated based on the refinancing rate of the Central Bank of the Russian Federation + 5%. If interest is received in foreign currency, non-taxable income is calculated based on 9% per annum (Article 224 of the Tax Code of the Russian Federation).
- Dividends from activities in third-party organizations (Article 275 of the Tax Code of the Russian Federation).
- Income not related to business activities: gifts, lottery winnings, from the sale of one’s own property, royalties, income from which the tax agent did not withhold tax (Article 228 of the Tax Code of the Russian Federation).
When hiring employees or attracting individuals under civil contracts, the individual entrepreneur is obliged to transfer personal income tax to the budget from the employees’ earnings as a tax agent (clause 6 of article 226 of the Tax Code of the Russian Federation).
Methods of paying personal income tax by individual entrepreneurs
Individual entrepreneurs on OSNO must necessarily pay personal income tax on the income received.
WITH what income is not subject to personal income tax, read the article “Income not subject to personal income tax (2017-2018)”.
This payment must be made in two ways:
- Advance payments based on notifications received from the Federal Tax Service:
- before July 15 - six months;
- until October 15 - for the third quarter;
- until January 15 - for the fourth quarter.
- After the declaration is submitted to the Federal Tax Service, it is necessary to make an adjustment and either pay extra or return the overpaid funds from the budget.
If the advance payment was transferred with a delay, penalties will be charged for the debt that arose for this reason (Article 75 of the Tax Code of the Russian Federation).
Advance tax payments are calculated based on the data that were reflected in the declaration for the previous reporting period, taking into account deductions (Articles 218, 221 of the Tax Code of the Russian Federation).
Does an individual entrepreneur pay personal income tax if he has not received a notification from the Federal Tax Service regarding the obligation to pay advance payments? Despite the fact that the individual entrepreneur must pay tax, in this case he will not have debts on personal income tax, which was calculated and paid by him independently (letter of the Ministry of Finance dated April 15, 2011 No. 03-04-05/3-266).
Tax adjustment and transfer
After calculating personal income tax and generating a declaration, it is necessary to adjust the amount of tax and either pay additionally or return the tax from the budget.
If your income changes by more than 50%, you need to generate a declaration in Form 4-NDFL in order to adjust the advance payments.
At the end of the year, individual entrepreneurs submit a 3-NDFL declaration to their Federal Tax Service by April 30. How to fill it out is explained in the order of the Federal Tax Service of Russia dated December 24, 2014 No. ММВ-7-11/
For information on filling out a tax return, read our material “Tax return 3-NDFL for 2017 - submitted in 2018.”
As for the individual entrepreneur who hires employees, he is an agent and must deduct tax from their salaries. The timing of tax payment depends on the type of income paid. Personal income tax from sick leave and vacation pay is transferred no later than the last day of the month in which they are paid, from wages and bonuses - no later than the day following the day of their payment (clause 6 of Article 226 of the Tax Code of the Russian Federation).
We also draw your attention to the fact that individual entrepreneurs have the opportunity to use the right to deductions in relation to income that is subject to personal income tax at a rate of 13% (clause 3 of Article 210 of the Tax Code of the Russian Federation):
- standard (Article 218 of the Tax Code of the Russian Federation);
- social (Article 219 of the Tax Code of the Russian Federation);
- investment (Article 219.1 of the Tax Code of the Russian Federation);
- property (Article 220 of the Tax Code of the Russian Federation), except for deductions related to the sale of real estate and/or vehicles that were used in business activities (subclause 4, paragraph 2, Article 220 of the Tax Code of the Russian Federation);
- professional tax deductions (Article 221 of the Tax Code of the Russian Federation);
- in the form of losses from transactions with securities and transactions with financial instruments of futures transactions carried forward to the future (Article 220.1 of the Tax Code of the Russian Federation);
- in the form of losses from participation in an investment partnership as a result of their transfer to future periods (Article 220.2 of the Tax Code of the Russian Federation).
Do individual entrepreneurs pay personal income tax while on UTII, PSN and Unified Agricultural Tax?
Payment by an entrepreneur of UTII exempts him from paying personal income tax only in relation to income received from activities subject to UTII (clause 4 of Article 346.26 of the Tax Code of the Russian Federation).
If the “imputed” person receives income from activities for which the entrepreneur is not registered as a UTII payer, then personal income tax is paid on such income.
An individual entrepreneur using the patent system does not pay personal income tax on income from those types of activities for which a patent has been obtained. If in his activities he uses those types of activities that do not fall under the PSN, he must pay personal income tax on income from these types of activities and submit a 3-NDFL declaration to the tax authorities.
Individual entrepreneurs who are agricultural producers and pay the unified agricultural tax are exempt from personal income tax in terms of income received from business activities (clause 3 of article 346.1 of the Tax Code of the Russian Federation). However, there is an exception for certain income. Thus, an individual entrepreneur on the Unified Agricultural Tax pays personal income tax on income from dividends and income subject to personal income tax at a rate of 35 and 9%.
If an individual entrepreneur on UTII, Unified National Social Economy or PSN uses the labor of employees in his activities, he has the obligation to withhold tax from their wages. It is paid at the place of registration of the individual entrepreneur. Before April 1 of the next year, it is necessary to submit information to the Federal Tax Service on income paid to employees and withheld tax in Form 2 of Personal Income Tax, and quarterly reporting in Form 6-NDFL.
Read about the specifics of filling out the certificate in the materials in the section “Certificate 2-NDFL in 2017-2018 (form and sample)”.
If an individual entrepreneur pays income to employees or attracts individuals under civil contracts, then, regardless of the taxation system applied, he performs the duties of a tax agent, which means he is obliged to withhold and pay personal income tax on income paid, submit reports in form 2-NDFL and 6 -NDFL.
Under OSNO, the income of individual entrepreneurs is subject to personal income tax, and the obligation arises to pay advance payments and submit a 3-personal income tax declaration.
When applying special regimes, individual entrepreneurs are exempt from paying personal income tax on income received from business activities. But it is important to take into account that in the application of one or another special regime there are nuances and exceptions in which the payment of personal income tax becomes mandatory.
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What is income tax and does an individual entrepreneur pay it under the simplified tax system?
What is income tax and simplified tax system?
Personal income tax (NDFL) is the main type of direct taxes levied on individuals based on the funds they own. In the structure of expenses of individual entrepreneurs, a significant part is made up of taxes and contributions to extra-budgetary funds. At the stage of starting a business, you need to familiarize yourself with the list of taxes that an individual entrepreneur is required to pay and the procedure for calculating them.
Regardless of the taxation system, individual entrepreneurs are required to pay the following taxes:
- Transport tax;
- personal income tax;
- Land tax;
- Property tax for individuals and other taxes established by the Tax Code of the Russian Federation.
The simplified tax system is a tax regime for small and medium-sized businesses. The simplified tax system assumes a minimal tax burden and simplified accounting. The main taxes paid by entrepreneurs in other taxation systems are replaced by a single tax under the simplified tax system. Accounting is kept in a special book for recording income and expenses, the individual entrepreneur’s declaration is submitted once a year, advance payments are made once a quarter.
Under the simplified system, the taxpayer independently selects the object of taxation and pays a single tax at the established rate:
- Income – tax rate 6%;
- Income reduced by expenses – tax rate 15%
Do individual entrepreneurs need to pay personal income tax using the simplified tax system?
Some taxes established by the Tax Code of the Russian Federation are not paid by individual entrepreneurs using the simplified tax system. These include:
- personal income tax;
- Property tax (if the property is not reflected in the cadastre).
An individual entrepreneur can carry out its activities either independently, that is, alone, or hire employees. This is why disputes arise regarding the obligation of individual entrepreneurs to pay personal income tax.
Let’s dot the “i’s” by considering 2 situations:
- An entrepreneur works independently - in this case, the individual entrepreneur is exempt from paying personal income tax, since it is included in the tax paid by the individual entrepreneur annually under the simplified tax system. At the same time, individual entrepreneurs using the simplified tax system are not exempt from paying fixed contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund. Today, an individual entrepreneur is required to contribute 23,153 rubles 33 kopecks per year to extra-budgetary funds.
- An entrepreneur hires external workers - in accordance with the legislation of the Russian Federation, the employer is obliged to calculate and transfer personal income tax for each employee. The amount of personal income tax is 13% of wages.
Also, the individual entrepreneur must transfer contributions to extra-budgetary funds for each employee. Moreover, if an individual entrepreneur pays contributions for himself once a year, then for employees it is necessary to do this every month. Personal income tax is also paid every month.
Summarize. Individual entrepreneurs who are on a simplified taxation system are exempt from paying personal income tax if they work alone without hiring employees.
When hiring employees, an individual entrepreneur is required to pay monthly personal income tax for each employee in the amount of 13% of wages and make payments to extra-budgetary funds - the Pension Fund and the Federal Compulsory Medical Insurance Fund.
Individual entrepreneur - taxes and other payments
When starting your own business, it is very important to choose the right tax system. For example, for federal companies, especially with foreign participation, it is important that counterparties are VAT payers, so for some individual entrepreneurs VAT is a necessity. It is much easier to pay taxes under the simplified tax system, so some individual entrepreneurs, having initially chosen, for example, UTII, can switch to a simplified tax system. The simplified tax system allows you to quickly obtain a OGRNIP, register a cash register, draw up documents necessary for hiring, strict reporting forms for individual entrepreneurs, etc.
The list of taxes and the procedure for their calculation are determined based on the taxation system used. Today there are 4 types of individual entrepreneur taxation:
- OSNO – pays personal income tax, VAT, property tax;
- STS – pays a single tax once a year, does not pay personal income tax, VAT, property tax;
- UTII – pays a single tax, is exempt from VAT, personal income tax, property tax, etc.;
- Individual entrepreneur on a patent - pays the cost of the patent for a period of 1 month to a year, the cost of the patent depends on the potential income
It is worth noting that UTII and the patent system are applicable to certain types of activities specified in the Tax Code of the Russian Federation.
Changes in the Tax Code in 2017
Traditionally, the beginning of the year is marked by changes in various areas of activity of Russians. This also applies to Tax legislation. According to experts, despite the difficult economic situation in the country, a significant increase in the tax burden is not expected in 2017.
Other sources will be sought to finance the budget deficit, since small and medium-sized businesses will no longer bear additional expenses.
The main innovation of 2017 is the return of the Unified Social Insurance Tax (ESS). It will replace contributions to pension and health insurance for individual entrepreneurs and LLCs, which are currently administered by the Pension Fund. The ESSS will improve payment discipline, thereby increasing tax collection. The responsibility for collecting the ESSS passes to the Federal Tax Service, which has significantly more tools than the Pension Fund. The Tax Service will administer current payments and collect arrears for the previous year.
Advice: Contact the Pension Fund of Russia or the Federal Tax Service for a detailed explanation of the new scheme for calculating and paying the ESSC for individual entrepreneurs.
In 2017, changes may affect personal income tax. Officials are considering increasing the tax rate to 15%, which will increase budget revenues by 0.5 trillion. rub. The changes will affect individual entrepreneurs and the simplified taxation system. The process of transition to a simplified tax system will be simplified, and the income limit will be increased to 120 million rubles. etc.
Despite the clear distribution of tax payments in relation to the taxation systems used, many individual entrepreneurs still have questions of an everyday nature - whether a current account is needed for an individual entrepreneur under the simplified tax system, whether it is necessary to pay personal income tax to an individual entrepreneur using the simplified tax system, etc.
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Before registering as an individual entrepreneur, many want to find out whether the individual entrepreneur pays income tax under the simplified tax system. This is wise, since you will have to make a lot of contributions to tax services and extra-budgetary funds. Whatever tax system is in effect, an entrepreneur needs to make payments of the following types:
To find out whether an individual entrepreneur pays income tax under the simplified tax system, you need to have a good understanding of what it is. With such a taxation system, simplified accounting and a reduction in the tax burden are assumed. In this case, the simplified tax system replaces a number of other taxes that businessmen pay when using other systems. To keep records, a special book is opened in which all income and expenses are recorded, a declaration is submitted to the tax service annually, and payments are made every quarter.
When working under the simplified tax system, an entrepreneur can choose the object of taxation himself, this can be:
Should individual entrepreneurs pay income tax under the simplified tax system?
The Tax Code of the Russian Federation establishes that when working on the simplified tax system, entrepreneurs do not pay the following taxes:
An individual entrepreneur can run his business only on his own, as well as employ hired workers. Therefore, the question arises whether an individual entrepreneur pays income tax under the simplified tax system. There are two options here:
So, does an individual entrepreneur pay income tax under the simplified tax system? The answer can be simple: he does not pay for himself, but must make payments for his hired employees.
What's new in the Tax Code in 2017?
As a rule, with the advent of the new year, various changes occur in the lives of Russian citizens. This is true in relation to Tax legislation. As experts note, in 2017 the tax burden on business will not increase. To compensate for the budget deficit, it is planned to find other sources of revenue. The authorities do not want to do this at the expense of medium and small businesses, since this will hit them hard.
The main change in tax legislation in 2017 is the return of the ESSS. It represents the Unified Social Insurance Contribution. It will replace contributions to health insurance and pension insurance for entrepreneurs and limited liability companies. Now the Pension Fund is in charge of this. The ESSS is designed to improve payment discipline and collection of tax payments. Now this payment must be collected by the financial tax service, which has a significantly larger number of instruments compared to the Pension Fund. The Federal Reserve will be responsible for administering payments and collecting arrears for 2016.
What else could happen in 2017? The authorities may increase the personal income tax to 15 percent. In their opinion, thanks to this step, 500 billion rubles more will be attracted to the budget. Entrepreneurs can experience change too. For example, the transition to the simplified tax system will be simplified, and the income limit may also be increased to 120 million rubles.
So, we have comprehensively examined the question of whether an individual entrepreneur pays income tax under the simplified tax system. The business portal site provides a lot of useful information about companies operating in Russia and other countries. This page explains how you can get a tax credit for your education. Individual entrepreneurs will be especially interested. It is devoted in detail to the simplified taxation system and its key features. We hope that these tips will help you optimize your fiscal expenses when running a business.
Personal income tax is classified as direct tax deductions. It is calculated as a percentage of income. To accurately answer the question of whether an individual entrepreneur pays personal income tax for himself, you need to know what method of taxation he uses (for example, there is a big difference - simplified tax system or OSNO). The procedure for calculating and paying personal income tax in 2018 remained the same as in 2017.
When working in special modes
But there are a number of exceptions that provide for the payment of personal income tax for individual entrepreneurs in 2018 and under these special regimes. These include the following situations (see table).
| Action | Explanation |
| Obtaining a loan from another entrepreneur or legal entity at 0%. | Personal income tax is calculated based on the amount of savings received based on the difference between the percentages. |
| Receiving dividends as an individual while being a member of a joint stock company. | The entire procedure for calculating and paying tax in this case falls on the shoulders of the organization paying income to the individual entrepreneur. The tax agent withholds personal income tax from the profit received by the entrepreneur and sends it to the state treasury. |
| Receiving income from the sale of your own property. | The individual entrepreneur here acts as an ordinary individual. |
The need to pay in accordance with the general procedure
If the individual entrepreneur has not switched to any of the special regimes and works for OSNO, then he must pay personal income tax. The question of whether the individual entrepreneur pays personal income tax for himself does not arise here.
Article 227 of the Tax Code of the Russian Federation provides for the payment of personal income tax in the form of advance payments within the following established periods:
- before July 15 – for the first six months;
- until October 15 – for the third quarter;
- until January 15 – for the fourth quarter (payments are made in the next year following the reporting period).
Transfers are made in accordance with notifications received from the Federal Tax Service. Tax specialists, when making calculations, are guided by data on the estimated profit of the individual entrepreneur.
After the end of the reporting period, the entrepreneur himself makes a calculation of the exact amount of personal income tax paid. In this case, income and expenses for the entire year are taken into account. Do not forget: the individual entrepreneur must transfer the amount of calculated personal income tax minus advance payments to the treasury by July 15 of the next reporting year.
EXAMPLE
If for 2018 a merchant makes advance payments totaling 45 thousand rubles, and the amount he later calculated turns out to be equal to 63 thousand rubles, then he will have to pay another 18 thousand rubles to the treasury no later than the mentioned period.
