Simplified tax system (STS): income, expenses and features

STS (simplified tax system) is a demanded tax regime that can be used by both individual entrepreneurs and various companies. It is considered one of the most popular modes, as it allows entrepreneurs to pay not too high taxes. There are several options for such a system, so you can choose STS "Revenues" or STS "Revenues minus expenses". Any option has its own characteristics, and at the same time they differ in accrued interest on income or profit.

System features

The features of the application of the USN include:

• the regime can be used only by some entrepreneurs whose activities are suitable for the requirements of this system;
• the possibility of simple reporting is provided, which even the entrepreneur himself can handle;
• the calculation is also considered simple, so if you understand well what can be considered an expense, then it will not be difficult to determine the correct amount of tax;
• this regime is not always beneficial, therefore, entrepreneurs must evaluate the consequences of its application, since often even the basic operational safety will be more effective for some areas of work.

The choice between the STS “Revenues” and the STS “Revenues minus expenses” should be based on the income received and profit.

Tax amount

Initially, entrepreneurs must determine how much they will transfer to the budget if they use this tax system. This takes into account not only transfers to the budget, but also various insurance premiums. They are approximately 30% of the salary of each employee. In addition, IPs for themselves must transfer these funds.

Tax rates are not considered too high, therefore, a much lower amount is paid than with the application of the general tax liability, and often with UTII. The percentage size depends on the selected system option.

Any version of the simplified tax system is considered convenient and easy to determine, so many entrepreneurs and companies apply this particular tax regime. But at the same time, it is advisable to compare it with UTII, OSNO and PSN in advance, as it is often for other types of activities that other systems can be more profitable.

With this tax, it is allowed for taxpayers to reduce advance payments from the insurance premiums listed if they are paid in the corresponding quarter. Therefore, the choice of this option is considered optimal for entrepreneurs with employees. If the IE does not have officially employed specialists, then it is possible to completely deduct insurance premiums for themselves from the tax. Often, after this process, the tax is canceled. What reporting is formed?

The declaration on the simplified tax system “Revenues” or “Revenues minus expenses” is considered to be easy to fill out, so often the entrepreneurs themselves are involved in this process, which allows them to save a significant amount of money on the wages of a hired accountant. This document should be submitted only once a year, and companies are required to submit a declaration to the Federal Tax Service by March 31 of the year following the reporting year, and IP until April 30 of the same year.

Declaration completion of the STS “Revenues” is considered a simple process, since only all funds received during the year are taken into account. If “Income minus expenses” is selected, then all expenses must be correctly indicated in the declaration, for which it is necessary to understand all the expenses of the enterprise in advance. With the STS "Revenues", a sample declaration is considered understandable, but in the second case, you need to carefully deal with all costs.

Additionally, companies and entrepreneurs keep track of the USN income book in this mode, which lists all cash receipts and expenses in the process of doing business.

In this mode, advance payments are required, therefore, the calculation must be carried out quarterly. Calculation of the STS “Revenues” is considered simple, since only all funds received are taken into account, and in the second case, expenses must be calculated.

What disagreements usually arise with the FTS?

When using the simplified tax system “Revenues” or “Revenues minus expenses”, entrepreneurs or companies often have numerous disputes with tax officials. The most popular odds are as follows:

• if income and expenses are considered under the simplified tax system, then entrepreneurs should carefully study all the rules related to the determination of costs, as tax officials often do not take certain expenses into account;
• if serious disagreements arise, then taxpayers have to go to an arbitration court, and decisions are often made in favor of the plaintiffs in such cases;
• the income book for the simplified tax system should contain all expenses, and each such item should be confirmed by official documents, while taking into account the strict and complete list of costs contained in art. 346.16 Tax Code.

The undoubted advantage of choosing this tax regime is that entrepreneurs do not need to pay VAT.

Combination with other tax regimes

The disadvantage of the system is that often entrepreneurs have certain problems when working with other companies. The fact is that it is unprofitable under the STS “Revenues minus expenses” or when accounting only for revenues to cooperate with contractors who are forced to pay input VAT.

Usually, companies transferring VAT to the budget simply refuse to cooperate with companies calculating the simplified tax system, since they have difficulties with drawing up a deduction.

Who can become a tax payer?

STS is used both by legal entities and individual entrepreneurs, but for this all of them must meet the numerous requirements of the system.

It is not allowed to apply the STS “Revenues minus expenses” or “Revenues” to organizations that have received income exceeding 45 million rubles for 9 months.

Who can’t use this mode?

There are certain restrictions on the use of this system, so not all entrepreneurs or firms can use the simplified mode. Therefore, it is not allowed to switch to it for firms that are:

• foreign companies;
• budget organizations;
• banks, various insurance companies, private pension funds, companies operating in the securities market, or investment funds;
• enterprises engaged in the field of gambling;
• firms whose operating systems exceed 100 million rubles in value;
• organizations that participate in agreements on the basis of which production sharing is supposed;
• firms in which other enterprises participate, and their share exceeds 25%.

For IP there are also certain restrictions, which include:

• it is impossible to use the simplified tax system if the IP did not inform the FTS of its decision in a timely manner;
• officially employed more than 100 people;
• the entrepreneur is engaged in the extraction or sale of minerals, but the exception is sand or clay, peat or other similar building materials;
• specializes in the production of excise products.

It is not allowed to apply the STS tax “Income minus expenses” or “Income” to notaries or lawyers who have private practice. In order to avoid such a situation in which the entrepreneur, by the decision of the Federal Tax Service, cannot use this simplified mode, one should correctly choose the OKVED codes.

What is the object of taxation?

The object may be a different amount of funds, depending on the choice of the direction of the simplified tax system. If the “Income” system is selected, then all cash receipts to the company are used for calculation, therefore there is no need to calculate expenses. The resulting value is charged 6%.

If another option is chosen, then USN income and expenses are taken into account for the tax; therefore, it is necessary to carefully evaluate all the costs of the enterprise. All expenses must be reasonable and official, therefore, they must be confirmed by documents. As a result, net profit will be obtained, with which 15% will be charged.

The tax base

The tax base is the amount of funds, which may be income or profit.

To accurately determine this value, you need to study the basic requirements for costs, which are described in Art. 346 Tax Code.

What tax rates are used?

If the fee is calculated relative to the income of the company, then the rate will be equal to 6%. It may be slightly reduced by regional authorities, but usually you have to use a standard and constant percentage.

If you need to determine the net profit of the company, then this value is charged 15%.

In some regions, there is a special relief for entrepreneurs who register for the first time, on the basis of which it is possible to work under the simplified tax system with a zero rate for a certain period of time, which will allow you to develop your business so that you can pay really high taxes in the future.

Which option to choose?

Since the USN mode is presented in several versions, often entrepreneurs encounter difficulties during the selection. Therefore, when choosing a particular mode, some recommendations are taken into account:

• if the margin is low, then it is advisable to pay a tax on net profit, since after all expenses are deducted from the income, a low amount of funds will be received, which will be charged further 15%;
• if the margin has a significant size, then it is optimal to pay 6% of all revenues to the company;
• it is rather difficult to use a system by which costs must be taken into account, so an entrepreneur will be forced to spend money on a staff accountant, as it is usually difficult to independently determine the costs;
• not all expenses of the company can be taken into account when calculating the tax base, since they must be confirmed by documents, and it is also important that they are made in the process of doing business, but it is not always possible to confirm all costs officially, which reduces the company's profit;
• if the company specializes in the resale of various goods, then proof of income and expenses requires not only documents that confirm the purchase of elements, but also their sale, which is not always possible, and the books of income and expenses under the simplified tax system are not enough for this.

Difficulties in the simplified tax system, when expenses are taken into account, arise when receiving advance payments from buyers, therefore only truly experienced and professional accountants should deal with the calculations.

Transition Rules

The transition to this tax regime is allowed in two ways:

• immediately after registration of the individual entrepreneur or enterprise;
• from the beginning of next year, and if the deadline is missed, you will have to wait again a whole year for the transition.

If at all during the work the income of the enterprise or individual entrepreneur will exceed 60 million rubles. then it automatically switches to OSNO, as the right to use the simplified tax system is lost.

How is tax paid?

According to the STS “Revenues”, contributions are paid in the same way as with “Revenues minus expenses”, therefore, only the procedure for calculating the fee is different.

A single tax under this taxation regime replaces VAT, personal income tax for the entrepreneur and income tax. In certain situations, property taxes still have to be paid. This refers to the situation when property on the balance sheet of the enterprise is valued using cadastral value. At the same time, the relevant regulatory act must be in force in the region.

VAT can be paid by ONS payers if firms import goods from other countries into Russia.

Reporting periods

For both types of STS periods are the same. The year is represented by the tax period, but in this case, the tax must be paid each quarter in advance.

Advances must be paid by the 25th of the month following the end of the quarter. The final payment must be paid by the IP until April 30, and by the company until March 31 of the year following the reporting year.

How is income tax calculated?

If this option is chosen by the entrepreneur, then it is necessary to calculate all the cash receipts for a specific period of time.

Next, insurance premiums are calculated, and if officially employed specialists work in the company, then the tax amount can be reduced as much as possible by 50%. If there are no workers, then the fee is reduced by the entire amount of insurance premiums, so often you do not have to pay any funds to the budget.

How is tax calculated on the basis of the “Income minus expenses” system?

In this case, it will be necessary to consider not only the cash receipts, but also the expenses of the company. Costs are deducted from receipts. 15% of the obtained value is determined, after which it is necessary to find out KBK STS “Revenues minus expenses” on the website of the Federal Tax Service or in the service department.

Difficulties can arise in determining different costs, so they must be confirmed by official documents, and also be directly related to the activities of the company.

Responsibility for tax evasion

If funds are not transferred within the established time according to the simplified tax system, then according to Art. 76 Tax Code, Article 119 Tax Code, Art. 75 Tax Code and Art. 122 of the Tax Code, different penalties are imposed for the taxpayer:

• if the delay exceeds 10 days, then account operations are suspended;
• for the absence of a declaration, a fine is imposed, the amount of which varies from 5 to 30 percent of the tax amount, but not less than 1 thousand rubles .;
• if the fee is not paid, a fine of 20 to 40 percent of the amount is charged;
• penalties are additionally charged, for which 1/300 of the refinancing rate is used.

Thus, the simplified tax system is a demanded taxation regime for the application of which individual entrepreneurs or companies must meet certain requirements. Transition is possible at registration or from the new calendar year. It is important to understand the two varieties of such a regime, as well as correctly calculate the tax and timely file a declaration. Relations with employees of the Federal Tax Service depend on the accuracy of calculation and delivery of documents. If the requirements of the law are violated, then the entrepreneur is forced to pay various fines and penalties.