Should an individual entrepreneur pay personal income tax? What is income tax and does an individual entrepreneur pay it under the simplified tax system? Individual entrepreneurs submit personal income tax
An individual entrepreneur (IP) is an individual who does not have a legal education, but is registered as an entrepreneur and has many legal rights. An individual entrepreneur carries out independent activities aimed at profit from the sale of goods, services or performance of work.
Questions that often arise for individual entrepreneurs: do I have to pay personal income tax? If yes, what amount? What happens if you miss the payment deadline?
In this article we will try to answer these questions.
Taxation for individual entrepreneurs
So, an entrepreneur can choose one of the taxation systems:
· Simplified taxation system (STS);
· Unified tax on temporary income (UTII);
· General taxation system (GTS);
· Patent taxation system (PTS).
Payment of personal income tax depends entirely on the chosen system.
simplified tax system
If a taxpayer uses a simplified form, he is exempt from paying personal income tax. The exemption is valid in all cases, except for those described in the current law, Article 226 of the Tax Code of the Russian Federation as not subject to.
UTII
If the taxpayer’s activities include an OKVED code (all-Russian classifier of types of economic activities), then personal income tax must be paid.
OSN
Under the general taxation system, individual entrepreneurs must pay personal income tax. But there are exceptions here too. For example, when the revenue for the sale of goods and services for the last 3 months does not exceed 2 million rubles.
PSN
When using the patent system, the taxpayer does not pay tax on net profits. If his activities involve activities that do not fall under the PSN system, then it is necessary to submit a 3-NDFL declaration to the tax office.
Personal income tax for individual entrepreneurs without employees
If an entrepreneur receives income from activities that are provided for in the Unified State Register of Individual Entrepreneurs, then personal income tax is not paid. If the activity is not included in the Unified State Register of Individual Entrepreneurs, then personal income tax is paid at a rate of 13%. In this case, the taxpayer has the right to tax deductions.
If the activities of an individual entrepreneur do not include employees, then personal income tax is not paid.
Features of personal income tax for individual entrepreneurs
After the taxpayer calculates the amount of personal income tax and draws up the appropriate declaration, it is necessary to check the amount of tax and, if necessary, adjust it. If the amount is exceeded, you can return it from the budget, if, on the contrary, the taxpayer pays extra.
Individual entrepreneurs, whose activities are based on hired workers, pay personal income tax on the amount of their salaries to the state treasury at rates of 13% or 30%. This must be done the next day after the payment of the salary.
Individual entrepreneurs reserve the right to receive a tax deduction on income subject to personal income tax. If a taxpayer uses voluntary pension insurance or is involved in charity, then he can take advantage of social deductions.
Payment of personal income tax can be made in two ways:
Based on advance payments upon notification from the Federal Tax Service (Inspectorate of the Federal Tax Service);
After submitting the declaration to the Federal Tax Service, if you need to pay extra or deduct funds from the amount.
Advance payments are calculated based on the data specified in the declaration for the previous reporting period, taking into account deductions.
If for any reason the personal income tax payment is overdue, a penalty will be charged on the debt.
Entrepreneurs using the simplified taxation system are exempt from paying. Accordingly, such individual entrepreneurs do not need to submit a year-end declaration in Form 3-NDFL (approved by Order of the Federal Tax Service of Russia dated December 24, 2014 No. ММВ-7-11/671@). True, there are exceptions to this rule.
3-NDFL for individual entrepreneurs on the simplified tax system
There are situations when an entrepreneur using the simplified tax system still has to submit a 3-NDFL declaration to his Federal Tax Service. This must be done in the following situations:
- The income received by an individual entrepreneur is subject to personal income tax. For example, if an entrepreneur receives an interest-free loan from an organization, provided that the individual entrepreneur does not receive any other money (for example, for goods, work, services) from this organization (Letter of the Ministry of Finance of Russia dated 08/07/2015 No. 03-04-05 /45762). In this situation, the individual entrepreneur must submit 3-NDFL to the simplified tax system. After all, the material benefit from saving on interest is subject exclusively to personal income tax, and the lender company cannot fulfill its obligations. Consequently, it is the individual entrepreneur who is obliged to submit a declaration and pay personal income tax to the budget;
- During the reporting year, an individual entrepreneur using the simplified tax system lost the right to use a special regime. In this case, the entrepreneur automatically switches to the application of the general tax regime; accordingly, he must report to the Federal Tax Service by submitting a 3-NDFL declaration based on the results of this reporting year;
- An individual entrepreneur sells his property like an ordinary individual, income from the sale of which must be declared, or represents 3-NDFL in order to receive a deduction for personal income tax (for example, a property deduction for the purchase of a home) and a tax refund.
When is payment of personal income tax required for individual entrepreneurs using the simplified tax system?
Individual entrepreneurs using the simplified tax system must transfer to the personal income tax budget:
1. In the above cases (except for the situation when 3-NDFL is submitted to them as an ordinary individual for the purpose of returning tax from the budget).
2. If this individual entrepreneur pays income taxable to personal income tax to individuals, for example, wages to its employees. In this situation, the individual entrepreneur will act in the role.
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 must be paid by all citizens. Individual entrepreneurs are included in this category.
An individual entrepreneur can work under different taxation systems. Most often, activities are carried out using the simplified tax system, standard mode, UTII, as well as patent obligations.
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Depending on which system is used by the businessman, it is determined whether the individual entrepreneur pays personal income tax. It is important to find out the procedure for withholding and transferring taxes in 2019.
Methods and systems
An individual entrepreneur can use one of the tax systems to choose from during his work.
Among them, the most common are:
- simplifiedSystem();
- general mode (OSNO);
- UTII, in which tax is levied on imputed income;
- patent
To find out whether an individual entrepreneur pays personal income tax, it is important to know the tax regime and the features of its application. When choosing a general system, personal income tax is mandatory. Payment is made in several ways.
An entrepreneur can make advance payments after receiving receipts sent by the Federal Tax Service. Taxes for the first half of the year must be paid by July 15. For the third and fourth quarters, payments are due by October 15 and January 15, respectively.
At the end of the year, a declaration is submitted to the tax authorities. According to the document, the need for additional payment or return of money from the treasury is determined.
If an advance payment is delayed, a penalty may be charged. The norm is reflected in Article 75 of the Tax Code of the Russian Federation.
Advance contributions are determined in accordance with the information provided in the previous declaration. Tax authorities should focus on Articles 218 and 221 of the Tax Code of the Russian Federation. It is important to take into account deductions.
Things to consider
In accordance with Article 227 of the Tax Code of the Russian Federation, personal income tax is paid by both ordinary citizens and individual entrepreneurs. The latter must be officially registered, but not considered a legal entity, and also receive income in the course of their activities.
Calculation and payment of tax are carried out by individual entrepreneurs independently. Payment is sent no later than July 15 of the following reporting year.
You don't need to make a one-time deposit. The taxpayer must make several payments throughout the year. The amount is determined by tax authorities based on the data specified in the previous declaration.
How to find out if an individual entrepreneur pays personal income tax
In accordance with Article 227 of the Tax Code of the Russian Federation, individuals who have the status of an individual entrepreneur are required to pay personal income tax. If a citizen has an obligation to pay, the tax authorities will calculate the amount and send a notification to the individual entrepreneur. The new document is submitted no later than one month before the payment deadline. If funds are not deposited on time, a penalty will be charged.
According to the law, an individual entrepreneur has the right to pay personal income tax on both general income and expenses, for which there is documentary evidence. Thus, you can take as a basis not only income, but also expenses. Taxation then applies only to part of the income.
To determine this value, an individual entrepreneur will need to make calculations. They are regulated by Chapter 25 of the Tax Code of the Russian Federation. It reflects the main costs that you can focus on.
Payment of personal income tax is possible if:
- development of natural resources;
- production of products or provision of services;
- support of the production process;
- maintenance, repair of main equipment and machinery;
- research developments;
- voluntary and compulsory insurance.
A feature of the calculations is the inclusion of state duty in expenses. Therefore, when paying personal income tax, a significant reduction in the amount of payment is possible.
There are some cases when the payment of personal income tax is not provided. This is possible under the simplified tax system, when individual entrepreneurs are exempt from paying property and income taxes.
If an entrepreneur uses the general mode, he needs to switch to the simplified mode. He will be able to forget about paying personal income tax forever.
In case of accounting according to OSNO, the tax is mandatory. At the same time, the individual entrepreneur does not have to pay only for himself. If he has employees, 13% tax is also deducted from them.
Personal income tax is not provided for under the patent system. Businessmen must contribute a certain amount, which is specified in the patent.
Who should contribute for?
Personal income tax is paid by the entrepreneur independently. Also, if employees work for a businessman, personal income tax is paid on their income.
For myself
An entrepreneur cannot independently conclude an employment contract. Therefore, a question arises regarding the payment of personal income tax.
In accordance with Letter No. 358-6-1, prepared on February 27, 2009, and Article 129 of the Labor Code of the Russian Federation, wages are considered remuneration for labor activity. It refers to incentive payments.
The Civil Code of the Russian Federation (Article 2) reflects the procedure for carrying out business activities. It is associated with a person receiving a certain income. The law states that operations carried out by an entrepreneur are not considered labor activity.
In this case, the profit that a person receives in the course of work is subject to taxation. Therefore, if you use the general regime, you are required to pay personal income tax for yourself. Exceptions are situations when taxation is carried out under simplified or imputed regimes.
For employees
If an individual entrepreneur employs other persons, then personal income tax is required to be paid on their income. 13% tax is withheld and transferred from the amount accrued as wages.
Thus, with a salary of 10 thousand rubles, the tax will be 1 thousand 300 rubles. The remaining funds are transferred to the employee in the form of salary.
During the calculations, the employer needs to take into account deductions. They are required, for example, if employees have minor children.
Algorithm and calculation example
When using the general tax system, deductions are calculated using the following formula:
N = (Exp. – Exp. – Deut.) * Stav
The reporting period for calculations must be considered 12 months. If the registration of an individual entrepreneur occurred at the beginning of the year, but the activity was started later, the countdown is carried out from the moment the work began.
When calculating personal income tax, you need to focus on the following algorithm:
- First, all income in the reporting year is grouped to determine rates for them. Standard taxation is carried out at a rate of 13%. For non-residents, 30% of income applies. In case of receiving income in the form of interest on mortgage bonds, a 9% rate is applied. When you receive a winning from a profit of more than 4 thousand rubles, 35% tax is deducted.
- Next, expenses for the current year are determined. They are also grouped according to species.
- At the next stage, the amount that reduces the tax base is calculated. The deduction can be applied to income taxed at a 13% rate.
- It is necessary to determine the amount of the tax fee. If one activity requires different rates, then each type is calculated separately.
To clarify the calculation procedure, you need to consider the example of paying taxes by an entrepreneur who does not have employees.
Individual Entrepreneur Stolyarov sells vegetables and fruits.
In 2019, he received income:
In May, Stolyarov paid for his son’s education in the amount of 75 thousand 300 rubles.
- When determining business tax, a rate of 13% is taken into account. The deduction from 815 thousand 123 rubles will be 50 thousand rubles. The calculation is 815123 - 50000, and the result is multiplied by 13%. The tax is 99 thousand 465 rubles 99 kopecks.
- When selling an apartment, no tax is paid. This is due to the fact that the individual entrepreneur had the rights to it for more than three years.
- Dividends received by an entrepreneur are subject to taxation at a rate of 13%. The tax will be 13 thousand 759 rubles 85 kopecks.
- The final annual personal income tax amount is 113 thousand 225 rubles 84 kopecks.
What does the duty refer to?
Obligations to pay taxes on personal income are formed taking into account the application of taxation regimes:
| simplified tax system | Under the simplified tax system, individual entrepreneurs will not have some tax obligations. This applies to payment:
If the activity is carried out by the entrepreneur independently, without the involvement of hired workers, then personal income tax is not paid. After all, the individual entrepreneur pays a general tax every year. When hiring employees, personal income tax is paid for each of them. The rate is set at 13%. Additionally, contributions to the funds are made. Funds are transferred annually for yourself, and monthly for employees. |
| UTII | In accordance with the Tax Code of the Russian Federation, an individual entrepreneur should not pay income tax on profits from his main job, on net income. But if the activity does not allow the use of UTII, then the citizen must send a declaration to the Federal Tax Service. According to the law, the imputed person has an obligation to pay personal income tax when receiving income under a different OKVED code. Among such situations are:
When hiring employees, personal income tax must be paid even on UTII. The rate is 13%. Funds are transferred to the Federal Tax Service at the place of registration. |
| Patent |
|
| BASIC | When using the general system, personal income tax is paid on the profit that is received in the course of carrying out the activities specified during registration. Tax payment is made in two ways. If an advance system is used, then payment for the six months is sent before July 15, for the third quarter - before October 15, and for the fourth - before January 15. In case of incorrect tax calculation, the funds can be returned. When calculating, it is important to remember about deductions that are not taken into account during taxation. When adjusted, new amounts are reflected in if they differ by more than two times. The declaration must be submitted no later than April 30. Based on paragraph 1 of Article 220 of the IP, deductions are allowed for income. It is also possible to apply social deductions for:
|
Special modes
Payment of personal income tax is not provided if the individual entrepreneur switched to the simplified tax system or the patent system before the start of the reporting period. Also, deductions are not made when applying UTII from income from activities that are indicated in the register.
In some cases, individual entrepreneurs, even under special regimes, must pay taxes:
- if you receive a loan from another individual entrepreneur or legal entity at a rate of 0%, the tax is determined based on the savings obtained from the difference between the interest;
- in case of receiving dividends during participation in a joint-stock company, personal income tax is withheld from the individual entrepreneur’s funds by the tax agent;
- when an entrepreneur sells his property, the tax payment procedure is similar to ordinary individuals;
- if an entrepreneur wins more than 4 thousand rubles in the lottery, tax must be paid;
- Personal income tax is calculated when receiving income from foreign companies;
- the debt may be written off for amounts that were not declared in a timely manner.
The main condition for excluding the payment of tax is the implementation of the activities specified during registration. If deviations are observed, personal income tax is included in the budget.
The procedure for calculating personal income tax is reflected at the legislative level. Therefore, it is important to carefully study the rules of law to find out whether you need to pay tax.
Attention!
- Due to frequent changes in legislation, information sometimes becomes outdated faster than we can update it on the website.
- All cases are very individual and depend on many factors. Basic information does not guarantee a solution to your specific problems.
Personal income tax (PIT) is the main type of direct taxes. Personal income tax is calculated as a percentage (of the total income of individuals minus documented expenses), in accordance with the norms of the current legislation of the Russian Federation.
In this article, we will consider in what cases an individual entrepreneur pays personal income tax on the simplified tax system, OSNO, UTII and PSN, and in what cases an individual entrepreneur does not need to be a payer of personal income tax.
Personal income tax for individual entrepreneurs using the simplified tax system in 2019
Taxpayers who use the simplified tax system are exempt from paying personal income tax on profits generated as a result of business activities. This profit is subject to simplified taxation. At the same time, an individual entrepreneur using the simplified tax system is not exempt from paying personal income tax in the cases provided for in paragraphs 2, 4, 5 of Article 226 of the Tax Code of the Russian Federation.
Funds that an individual entrepreneur received from performing those types of activities that are specified during registration and entered into the Unified State Register of Individual Entrepreneurs are not subject to fees.
The profit that an individual entrepreneur receives using the simplified tax system from transactions not listed in the Unified State Register of Individual Entrepreneurs is, by law, considered a transaction made by an individual and is subject to taxation at a rate of 13%.
An individual entrepreneur using the simplified tax system can exercise his right to a tax deduction and reduce his taxable income.
An individual entrepreneur using the simplified tax system is a personal income tax payer in the following cases:
- from profits in the form of cash (material) prizes as a result of participation in various promotions that are carried out by sellers (manufacturers) of products for winnings that exceed 4,000 rubles;
- from the profit generated in the case of receiving loans (from loans in rubles - an amount calculated as 2/3 of the refinancing rate minus the cash equivalent of interest under the loan agreement; from loans in foreign currency - the monetary benefit is calculated at a rate of 9% per annum minus the interest specified in terms of the agreement - in accordance with Articles 212 and 224 of the Tax Code of the Russian Federation);
- from profits generated as a result of receiving interest on bank deposits (deposits in rubles are calculated as the sum of the refinancing rate of the Central Bank of the Russian Federation and 5 percentage points; deposits in foreign currency are calculated at a rate of 9% per annum);
- from profits from foreign sources;
- in the form of dividends (from participation in third-party organizations);
- from funds received for which it was not previously transferred and withheld in accordance with Article 228 of the Tax Code of the Russian Federation.
Thus, an individual entrepreneur using the simplified tax system who needs to pay personal income tax must report to the tax authorities (by filing a declaration) before April 30 of the year following the year of profit formation and pay the tax no later than July 15.
If an individual entrepreneur on the simplified tax system is an employer, he is recognized as a tax agent regarding income paid to his employees. In accordance with the law, individual entrepreneurs are obliged to deduct 13% from their earnings (or 30% for foreigners), transfer them to the budget and submit the relevant certificates to the tax office.
Personal income tax for individual entrepreneurs on OSNO in 2019
In accordance with the norms of the Tax Code of the Russian Federation, individual entrepreneurs who apply the general taxation system (OSNO) in some cases have an obligation to pay personal income tax. When fulfilling the obligation to pay, you should be guided by the norms of Chapter 23 of the Tax Code of the Russian Federation.
In accordance with Article 223 of the Tax Code, individual entrepreneurs on OSNO pay personal income tax in two ways:
1. Advance payments
Advance payments are paid by individual entrepreneurs on the basis of received tax notices within the following periods:
- for six months - until July 15 in the amount of 50% of the annual amount of advances;
- for the 3rd quarter - until October 15 in the amount of 25% of the annual amount of advances;
- for the 4th quarter - until January 15 of the next year in the amount of 25% of the annual amount of advances.
2. Additional payment or refund of funds from the budget based on adjustments to the submitted information.
Please note that in case of failure to pay the advance payment (on time), a penalty will be charged on the debt (Article 75 of the Tax Code of the Russian Federation).
Advance payments of individual entrepreneurs to OSNO are calculated by the Federal Tax Service based on the estimated (actual) profit. At the same time, deductions (Articles 218 and 221 of the Tax Code of the Russian Federation) reflected in the declaration for the previous reporting period are taken into account.
After the calculation of advances on individual entrepreneur payments to OSNO has been made (but no later than 30 days before the date of the specified payment), the individual entrepreneur receives a notification about the obligation to make the payment.
Let us note that if an individual entrepreneur on OSNO has not received such a notification, then he is not obliged to independently calculate the payment amount (letter of the Ministry of Finance No. 03-04-05 / 3-266 04/15/2011). At the same time, penalties and fines for unpaid advances are not assessed if a notification from the Federal Tax Service is not received.
As noted above, additional payment or refund of funds from the budget occurs on the basis of adjustments to the information submitted by the individual entrepreneur to OSNO.
That is, if in one reporting period the taxpayer has a change in revenue (by more than 50%), he is required to submit a declaration to adjust advance payments in Form 4-NDFL.
In addition, you need to submit a declaration if new types of business activities have appeared (which are registered in the Unified State Register of Entrepreneurs). In such a situation, an individual entrepreneur independently determines the expected amount of income and indicates it in the notice.
At the end of the reporting year, the individual entrepreneur must submit a declaration to the Federal Tax Service (at the place of registration) by April 30th. The fee less advance payments and deductions must be paid by July 15.
If an individual entrepreneur on OSNO is an employer, then he is recognized as a tax agent (regarding the earnings of his employees). By law, he must deduct from the earnings of his employees (13% or 30%). The entrepreneur submits 2-NDFL certificates to the Federal Tax Service.
The payment must be transferred no later than the day following the day of payment of wages and no later than the last day of the month in which vacation or sick leave benefits were issued (Letter of the Ministry of Finance No. 03-0405/8-216 03/14/2013).
Paragraph 1 of Article 220 of the Tax Code of the Russian Federation provides for individual entrepreneurs the right to deductions in relation to income subject to taxation. An entrepreneur can use the right to a social deduction when expenses arise for:
- voluntary pension insurance;
- charity;
- treatment;
- education.
Do not forget that an individual entrepreneur who, at the end of the reporting year, suffered losses from carrying out work, cannot reduce taxable accruals.
Personal income tax for individual entrepreneurs on UTII in 2019
Based on Letter of the Federal Tax Service of Russia No. AS-4-3 /6753 04/26/2011, if an individual entrepreneur has types of activities that do not fall under UTII, but he indicated them in the Unified State Register of Individual Entrepreneurs, then the individual entrepreneur is not exempt from providing a declaration of the appropriate form.
In accordance with the Tax Code of the Russian Federation, an individual entrepreneur on UTII is not recognized as a personal income tax payer in terms of profits from the main work. Thus, he does not withhold tax from his net income and does not provide information to the Federal Tax Service.
The Tax Code requires individual entrepreneurs to pay income tax on UTII if they have profits from activities not provided for by the OKVED code and received as an individual, for example:
- profit from the sale of real estate;
- prizes received from the promotion;
- dividends (from participation in other organizations);
- funds from business activities.
If an individual entrepreneur on UTII is an employer, then he withholds personal income tax from the salaries of his employees (in the amount of 13%). The fee is paid at the place of registration of the entrepreneur in accordance with Article 224 of the Tax Code of the Russian Federation.
Personal income tax for individual entrepreneurs on PSN in 2019
An individual entrepreneur who uses the patent tax system (PTS) is not a personal income tax payer for individual entrepreneurs. This concerns a portion of the profits from the activity covered by the patent.
Income tax is not charged and is not payable on payment for a patent.
If an individual entrepreneur on a PSN uses types of activities that are not covered by a patent, he is required to provide a 3-NDFL declaration.
An individual entrepreneur on PSN as an employer is recognized as a tax agent in relation to the funds paid to him. In accordance with the norms of current legislation, he is obliged to deduct an amount of 13% from the salaries of employees or 30% for foreign workers. At the same time, the entrepreneur submits a 2-NDFL certificate to the Federal Tax Service.
In accordance with Letter of the Ministry of Finance No. 03-0405/8-216 dated March 14, 2013, withheld funds are paid by individual entrepreneurs to the PSN no later than the day following the day of payment of salaries to employees, and when issuing vacation or sick pay, the last date for transferring personal income tax is the last day month in which payments were made.
The material has been updated in accordance with the current legislation of the Russian Federation on December 13, 2018
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