The terms for applying USN (Simplified Tax System)
The Simplified Tax System (hereinafter – the STS) is one of the tax regimes which means a special procedure of the tax payments and is aimed at the representatives of the small and medium-sized business.
The sense of the STS is that the taxpayers pay a single tax which replaces a number of the taxes of the traditional tax system.
The organizations and the individual entrepreneurs (hereinafter – the IE) are recognized as the payers of the single tax.
Applying the STS exempts the organizations from paying the income tax of the organizations (other than a tax paid from the dividends and on the transactions with the separate types of debt obligations); the property tax; VAT (with the exception of WAT payable when importing the goods into the territory of the Russian Federation and the other territories under its jurisdiction as well as VAT paid in accordance with Art. 174.1 of the Tax Code of the RF).
Applying the STS exempts the IE from paying the individual income tax (in respect of the income received from the entrepreneurial activity with the exception of the tax paid from income taxed at rate 35% and 9% provided for by Clause 2, 4 and 5 of Article 224 of the Tax Code of the RF); the tax to property of physical persons (in respect of the property used for the entrepreneurial activity); VAT (with the exception of VAT payable when importing the goods into the territory of the Russian Federation and the other territories under its jurisdiction as well as VAT paid in accordance with Art. 174.1 of the Tax Code of the RF).
The other taxes are paid according to the general procedure.
The organizations and the individual entrepreneurs who apply the STS are not exempted from fulfilling the obligations of the tax agents provided for by the Tax Code of the RF. The existing order on cash register transactions and the procedure of providing the statistical reporting retain for the organizations and the individual entrepreneurs.
Taking into consideration special attraction of the regime STS due to increasing the taxation burden the law-makers restricted the conditions of its application:
1) The organization is entitled to switch on the STS if the income does not exceed 45 000 000 rubles according as of the end of 9 months of the year in which it files an application on switching on. This amount shall be indexed annually to the deflator coefficient.
Thus, since 2015 the income of the organization for 9 months 2014 shall not exceed 48 015 000 rubles (45 000 000 × 1,067) when switching on the STS.
When switching on the STS since 2016 the income of the organization for 9 months 2015 shall not exceed 51 615 000 rubles (45 000 000 × 1,147).
2) The organizations and the individual entrepreneurs are not entitled to apply the STS if their average number of employees exceeds 100 people for the tax (accounting) period.
3) The organizations are not entitled to apply the STS if the residual value of the assets defined by the accounting data exceeds 100 000 000 rubles. In this case those assets are taken into account which are depreciated and are recognized as amortizable assets as per the rules of section 25 of the Tax Code of the RF.
4) The organizations are not entitled to apply the STS if their share in the other organizations is more 25% (except of the organizations specified in subparagraph 14 of paragraph 3 of Art. 346.12 of the Tax Code of the RF).
5) The organizations which have the branches and (or) the representative offices; the banks; the insurers; the non-governmental pension funds; the investment funds; the professional participants of securities market; the pawnbrokers; the organizations and the individual entrepreneurs engaging in producing the excisable goods as well as in extraction and realization of minerals other than the common minerals; the organizations performing the activity on organizing and carrying out gambling; the notaries engaging in private practice; the lawyers who have founded legal offices and other form of law bodies; the organizations who are members of production sharing agreement; the organizations and the individual entrepreneurs who pay the unified agricultural tax; the public and budgetary establishments, the foreign organizations; the microlenders are not entitled to apply the STS.
6) The organizations and the IE who have switched on the payment of the UTII for certain types of activities are entitled to apply STS for other types of activities. However, the restrictions on the stuff number and the value of the assets in respect of such taxpayers are defined on the basic of all carried by them types of activities and the limit of income is defined on those types of activities the taxation of which is performed according to the general taxation regime.
For switching on the STS the organizations and the IE submit a notice to the tax authority at its place of registration not later than 31 December of the calendar year preceding the calendar year beginning from which they are switching on the STS. The selected subject of taxation, the residual value of the assets and the income for 9 months are specified in the notice.
The newly created organizations and IE have the right to give notice of switching on STS not later than 30 calendar days from the date of its registration in the tax authority. In this case they can use the STS from the date if its registration.
Subject of taxation and tax rates under STS
The subject of taxation under the STS can be:
- or “the incomes”. In this case the tax rate is 6%. This subject simplifies maximum the tax accounting and allows avoiding the documentation of expenditures.
- or “the income reduced by the amount of expenditures”. Thus the tax rate is 15%. The differentiated tax rates within limits from 5% to 15% can be established by the law of the constituent units of the RF.
The taxpayer needs to compare the tax sums which are paid by the different subject of taxation to choose the optimal option for himself.
Cancellation of applying STS
The taxpayer forfeits the right to apply STS:
1) if its income has exceeded 60 000 000 rubles as of the end of the accounting (taxable) period defined in accordance with Art. 346.15 of the Tax Code of the RF and Subparagraph 1 and 3 of Paragraph 1 of Art. 346.25 of the Tax Code of the RF. This amount is indexed to the deflator coefficient. In particularly, the income of the taxpayer applying the STS shall not exceed 64 020 000 rubles (60 000 000 × 1,067) in 2014, in 2015 – 68 820 000 rubles (60 000 000 × 1,147). If the taxpayer simultaneously applies the STS and the patent system of taxation, the income on both special tax regimes are taken into account when defining the amount of the income;
2) and (or) if the unconformity with the conditions of applying the STS took place provided for by Paragraph 3 and 4 of Art. 346.12 of the Tax Code of the RF above within the accounting (taxable) period.
The taxpayer is obliged to inform of it to the tax authority within 15 calendar days upon the expiry of the accounting (taxable) period.
The taxpayer deems to forfeit the right to applying the STS from beginning of that quarter in which the specified exceeding and (or) unconformity take place.
The taxpayer applying the STS is entitled to switch on another regime of taxation from beginning of the following calendar year giving notice of it the tax authority not later than the 15th of January in which he supposes to switch on another regime of taxation. In addition he can switch on the STS again no sooner than one year.
In case of terminating the activity in respect of which the STS was applied the taxpayer shall inform of it the tax authority within 15 days from the day of its termination.