Every future individual entrepreneur needs to know how much taxes an individual entrepreneur pays. But it’s impossible to answer this question in a nutshell. If only because the number and amount of taxes of an individual entrepreneur are determined by the taxation system (tax regime) that the individual entrepreneur applies in his activities. You also need to take into account all the nuances of constantly changing legislation; an automatic online service will help with this.
Depending on the tax regime, an individual entrepreneur may pay one tax per year or make several tax payments every month. We will tell our readers how much taxes individual entrepreneurs pay in 2020 in our publication today.
Tax categories for individual entrepreneurs
Please note that all tax payments of individual entrepreneurs can be divided into categories. There are four of them:
- fixed payments by individual entrepreneurs for compulsory medical and pension insurance (“for oneself”);
- taxes and payments for compulsory types of insurance (deductions from employee salaries);
- taxes provided for by the taxation system applied by the individual entrepreneur;
- taxes and payments that are additional (depending on the type of business activity).
Fixed payments for individual entrepreneurs for compulsory insurance (“for oneself”)
In 2020, as in previous years, individual entrepreneurs continue to pay insurance premiums for compulsory types of insurance. Individual entrepreneurs pay insurance premiums regardless of the taxation system. Moreover, it does not matter whether there is income or not. Responsibility for paying insurance premiums begins from the date of registration of an individual as an individual entrepreneur. The amount of contributions is fixed. If an individual entrepreneur does not have employees, he makes fixed payments only “for himself”.
In 2020, an individual entrepreneur must make payments to the INFS at the place of his registration as an individual entrepreneur (quarterly or once for the entire year).
Let us recall that the amount of fixed insurance premiums in 2019 , with an income of less than 300,000 rubles, was as follows:
- The contribution to the Federal Tax Service for compulsory pension insurance is 29,354 rubles.
- The contribution to the Federal Tax Service for compulsory medical insurance is 6,884 rubles.
In total, for 2020, an individual entrepreneur must pay mandatory contributions for himself in the amount of 36,238 rubles , with an annual income of less than 300,000 rubles.
In 2020, the amount of insurance premiums in a fixed amount will increase by 4,636 rubles and amount to:
- The contribution to the Federal Tax Service for compulsory pension insurance is 32,448 rubles.
- The contribution to the Federal Tax Service for compulsory medical insurance is 8,426 rubles.
In total for 2020, an individual entrepreneur must pay mandatory contributions for himself in the amount of 40,874 rubles , with an annual income of less than 300,000 rubles
Mandatory and optional payments to individual entrepreneurs
The annual cost of maintaining an individual entrepreneur includes payments that are mandatory for all entrepreneurs, regardless of what they will do and what tax regime they choose. Other expenses depend on specific operating conditions and the availability of income.
Mandatory insurance premiums for individual entrepreneurs for themselves
The obligation to pay insurance premiums for yourself even in the absence of income from the business is often called the main disadvantage of an individual entrepreneur. The amounts are indeed considerable - in 2020, the fixed contribution amount is 40,874 rubles for income up to 300,000 rubles. You can temporarily suspend their accrual only during certain periods, for example, if you are on maternity leave for a child up to one and a half years old.
But before you give a negative assessment, you need to understand what these payments are. Contributions are taken into account when calculating the total tax burden of individual entrepreneurs, but are not taxes. On the contrary, they reduce the calculated taxes, in some regimes and with low incomes - to zero.
Contributions are sent to the account of the insured person in the Pension Fund, i.e. This is financing the entrepreneur's pension. And part of the contributions goes towards his medical insurance. Therefore, it is incorrect to call insurance premiums irrevocably spent funds.
Of course, if an individual entrepreneur has registered, but the business has not been running for a long time or only receives losses from it, then contributions will have to be paid from other sources, for example, from wages or income from renting out an apartment. But you must admit, such a business is of little use, so it’s worth deregistering from the tax register.
In addition to the amount of 40,874 rubles, another 1% must be transferred from income over 300,000 rubles. For example, if an individual entrepreneur earned 400,000 rubles in a year, he will pay a thousand more in contributions - 41,874 rubles.
Starting from 2020, an entrepreneur who complies with a number of restrictions can become a payer of professional income tax. On the NAP, contributions are paid for oneself voluntarily, but one must remember that in this case the individual entrepreneur will not receive an insurance pension, but only a social old-age pension.
How much taxes does an individual entrepreneur have to pay per year?
Unlike contributions, there is no general answer to this question. The amount of tax deductions depends on several factors:
- the applied taxation system;
- region of activity or registration of the individual entrepreneur;
- availability of employees;
- line of business;
- amount of income;
- share of expenses in revenue, etc.
Only accounting specialists can correctly take into account all these factors and choose the optimal taxation system. We advise our users to contact us for a free consultation.
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But very briefly, you need to know that the taxation systems in the Russian Federation are divided into two groups:
- the tax depends on the income received: OSNO, simplified tax system, unified agricultural tax, NPD;
- the tax does not depend on real income: UTII and PSN.
What does it mean? If you have chosen a system from the first group, then if you have no income, you will not pay tax. But when choosing UTII or PSN, taxes are mandatory payments, even if the individual entrepreneur does not receive any income.
✐ Example ▼
Let's consider a simple example: an entrepreneur provides hairdressing services, there are no employees, and income is irregular. If you apply for a patent for an individual entrepreneur, its cost depends on the region of activity. Thus, in Ufa, a patent for a hairdresser costs 1,784 rubles per month, this amount is paid regardless of how much is actually earned.
But if the simplified tax system Income mode is selected at a rate of 6%, then the tax directly depends on the revenue: if 20,000 rubles are received, the tax will be 1,200 rubles, and with an income of 30,000 rubles, the tax will be 1,800 rubles. This is already comparable to the cost of a patent. It turns out that with irregular and low income, it will be more profitable for a Ufa hairdresser to work under the simplified tax system. Then, during a break in business, he will not pay tax, but on PSN he will have to pay a fixed amount every month.
In addition, the patent system still does not provide for the possibility of deducting insurance premiums paid for oneself from the cost of a patent. However, there is already a bill that will make the corresponding changes.
Insurance premiums for employees
In addition to contributions for themselves and taxes on income from business activities, individual entrepreneurs must pay insurance premiums for their employees. The standard rate is 30% of the amounts paid, but from April 1, 2020, tariffs for wages above the minimum wage have been halved.
The more employees and higher salaries, the more contributions you will have to pay. Of course, if the individual entrepreneur does not plan to hire staff, then he will not have these expenses.
Cash machine
After the start of cash reform in 2020, the use of cash registers has become almost universal. Online cash registers are required for retail trade, including in online stores, public catering, and the provision of services by organizations and individual entrepreneurs with employees.
Now, individual entrepreneurs without staff who provide services can work without a cash register, but the deferment for them is valid only until July 1, 2021. There are also slight relaxations for PSN, because some services on a patent are completely exempt from CCP.
Also, cash registers are not used if an entrepreneur makes payments to organizations or individual entrepreneurs through a current account. Therefore, when working only in the b2b segment, you can do without cash registers.
A cash register with an Internet connection is not a cheap pleasure. Firstly, the online cash register itself costs about 20 thousand rubles. Secondly, you need to pay for the services of a fiscal data operator, who transmits information about sales to the Federal Tax Service, and this is at least 3,000 rubles per year. Thirdly, you need to pay for Internet access itself, which is another 3-4 thousand rubles. That is, if you need to install a cash register, plan about 30 thousand rubles for these purposes in the first year.
Checking account
A current account is not required for individual entrepreneurs, but it is a very convenient payment tool. In addition, without a current account, you can only accept payments from clients and customers in cash, which greatly limits doing business.
Moreover, cash management services have not been a significant expense item for a long time. With relatively low turnover, you can work on completely free RKO tariffs or not exceeding 1,000 rubles per month. And the amount in the individual entrepreneur’s account up to 1.4 million rubles is insured, the same as for ordinary individuals.
Most large banks open a current account for free, and you don’t even have to leave your home to do so. You can choose the most favorable tariff during our free consultation.
How to open a current account for free
Increase in insurance premiums in 2020
Let us remind you that starting from 2020, the amount of fixed contributions for individual entrepreneurs is not calculated from the minimum wage established at the beginning of the year. Law No. 335-FZ dated November 27, 2017 amended the Tax Code of the Russian Federation. Art. 430 of the Tax Code of the Russian Federation it is determined that if the payer’s income for the billing period does not exceed 300,000 rubles, then the fixed amount of contributions to pension insurance is:
- 26,545 rubles for the billing period of 2020;
- 29,354 rubles for the billing period of 2020;
- 32,448 rubles for the billing period of 2020.
Thus, the increase in the burden on fixed contributions in 2019 compared to 2020 is 2,809 rubles. And in 2020 it is necessary to pay fixed contributions already 3,094 rubles more than in 2020.
Insurance premiums for health insurance in a fixed amount, regardless of the income of the entrepreneur, will be:
- 5,840 rubles for the billing period of 2020;
- 6,884 rubles for the billing period of 2020;
- 8,426 rubles for the billing period of 2020.
Please note that in case of excess annual income (more than 300,000 rubles), the individual entrepreneur additionally pays 1% of the excess amount. Payment must be made no later than April 1 of the following year.
An individual entrepreneur without income did not work in 2020: what taxes and contributions must be paid?
Important information! Pay special attention to the fact that they promise to write off taxes and contributions for the second quarter of 2020 for those individual entrepreneurs who belong to the most affected areas of the economy. They also promise to reduce insurance premiums by 12,130 rubles for such individual entrepreneurs (read more at this link). Read about other measures to support individual entrepreneurs in connection with the pandemic at this link. Good afternoon, dear individual entrepreneurs!
It often happens that an individual entrepreneur has opened, but does not conduct any commercial activities. Doesn't work as an individual entrepreneur, zero income. And here many entrepreneurs make a huge mistake by reasoning as follows: “Well, since I have no income and I don’t work as an individual entrepreneur, then I don’t owe the state anything!”
And then they really don’t do anything. They don’t pay fees “for themselves”, don’t submit declarations and other reports…. And then they receive demands for payment of huge sums in the form of insurance premiums in the maximum amount and fines of several hundred thousand rubles.
Here is a very typical comment from a blog reader who also thought so:
I repeat that such thoughts are a VERY serious mistake that leads to HUGE problems. I think I have convinced you that the fact that an individual entrepreneur did not work and had no income is not a reason not to submit reports, not to pay taxes and fees.
Let's consider a specific example for an individual entrepreneur on the simplified tax system of 6% without income for 2020
We will study the situation with taxes and contributions in 2020 for a specific case when the following conditions are simultaneously met:
- Individual entrepreneur on the simplified tax system 6% “income”;
- The individual entrepreneur was open until December 1, 2020 (I’ll talk about this important point in the video below).
- An individual entrepreneur without employees (that is, is not registered as an employer and has never hired employees or entered into civil contracts with individuals);
- The individual entrepreneur has no income. That is, the entrepreneur does not conduct any commercial activities within the framework of an individual entrepreneur;
- Individual entrepreneurs have no debts on taxes and contributions for previous tax periods. There are also no penalties or interest.
I warn you right away that here we will consider the scheme only for the simplified tax system and mandatory contributions. The fact is that in addition to the tax under the simplified tax system, an individual entrepreneur without income may also be a payer of other taxes. For example, industry taxes. This is a different story.
Also remember that below we are talking about individual entrepreneurs on the simplified tax system of 6% with the “income” attribute.
So let's get started.
Tax according to the simplified tax system
If the individual entrepreneur did not have income, then there is no need to pay it. You don't need to notify anyone, just don't pay. The fact that the income is zero is reflected in the tax return under the simplified tax system, which must be submitted on time.
Contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund
In fact, starting from 2020, individual entrepreneurs’ insurance premiums “for themselves” must be paid not to the Pension Fund of Russia, but to the Federal Tax Service. That is, it is more correct to say not “contributions to the Pension Fund” and “contributions to the FFOMS”, but:
- Insurance contributions of individual entrepreneurs “for themselves” for pension insurance (to the Pension Fund of Russia)
- Insurance premiums of individual entrepreneurs “for themselves” for health insurance (in the Federal Compulsory Compulsory Medical Insurance Fund)
In 2020, the amount of these contributions will be:
- Contributions to the Pension Fund for oneself (for pension insurance): RUB 32,448.
- Contributions to the FFOMS for yourself (for health insurance): 8426 rubles.
- Total for 2020 = 40874 rubles.
- Also, do not forget about 1% of the amount exceeding 300,000 rubles of annual income
- The maximum contribution to pension insurance with an income of more than 300 thousand rubles per year will be 32448 * 8 = 259584 rubles.
These fees must be paid by December 31, 2020.
A very common mistake of an individual entrepreneur without income
Many people think that since an individual entrepreneur did not work, he should not pay fixed contributions. No, you must pay these fees, since their size does NOT depend on the income of the individual entrepreneur.
There are only six categories of entrepreneurs who are TEMPORARILY exempt from paying fees:
But this benefit must be received IN ADVANCE. You cannot simply stop paying dues, as this will inevitably lead to problems.
Do I need to submit a zero declaration?
Necessarily. If our individual entrepreneur from the example on the simplified tax system of 6% does not submit a declaration for 2020, then in 2021 he will receive a requirement to pay a pension insurance contribution in the maximum amount of 259,584 rubles. They will also add a fine for being late in submitting the declaration + penalties will be calculated.
If there is an account for an individual entrepreneur in a bank, then it will be blocked upon filing with the Federal Tax Service. The declaration under the simplified tax system will need to be submitted by April 30, 2021.
Is it necessary to maintain KUDIR?
Yes need. Even if it is zero, you should have it. But you don’t need to submit it to the Federal Tax Service along with your tax return.
Do I need to pay 1% on income of more than 300,000 rubles per year?
An individual entrepreneur on the simplified tax system without income does not pay this 1%, since he had no income.
Do I need to pay contributions “for myself” if an individual entrepreneur simultaneously works in another company, like an ordinary employee?
Yes need. Why you need to do this, watch this short video:
I'll stop there
I repeat that we considered the basic scheme for individual entrepreneurs on the simplified tax system of 6% without income in 2020. But there may be other nuances, since everyone has different situations. If you have a question, it is better to ask it in the comments below, or to another relevant article on the blog.
I also recommend subscribing to blog news, as everything is constantly changing:
Best regards, Dmitry Robionek.
PS I recommend watching the video:
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Individual entrepreneur taxes depending on the tax regime
As mentioned earlier, the answer to the question of how much taxes an individual entrepreneur pays largely depends on the tax regime he has chosen.
For individual entrepreneurs, the legislation of the Russian Federation provides for five tax regimes - four special and one general.
Tax regimes for individual entrepreneurs:
- OSN or General Taxation System.
- UTII or Unified Tax on Imputed Income.
- PSN or Patent Tax System.
- STS or Simplified Taxation System.
- Unified Agricultural Tax or Unified Agricultural Tax.
Now let’s look in more detail at how much taxes an individual entrepreneur pays on each of the above taxation systems.
Taxes and obligatory payments of individual entrepreneurs 2020
What taxes does the individual entrepreneur pay? It depends on which tax system you choose. Taxes differ in rate, base, period, calculation procedure and payment deadlines. If you are interested in how to reduce taxes for individual entrepreneurs, then you need to familiarize yourself with all taxation systems in force in the Russian Federation.
Free tax consultation
Entrepreneurs can choose one of six tax systems for individual entrepreneurs:
- OSNO or the general taxation system is complex, with a high tax burden, but allows you to conduct any type of activity and has no restrictions. Anyone can work for OSNO, but if we talk about reducing taxes for individual entrepreneurs, then the general taxation system for individual entrepreneurs does not provide such opportunities. The rate on income received in this regime will be the same as the personal income tax on wages - 13%, and in addition, you must pay VAT - the most difficult tax to calculate and pay. The VAT rate, depending on the category of goods or services, ranges from 0% to 20%.
- system or simplified taxation system is chosen by most beginning entrepreneurs. This mode has two options: simplified taxation system Income and simplified taxation system income minus expenses, which are very different from each other. If you choose the “Income” option, then the individual entrepreneur tax on the simplified tax system in 2020 will be only 6% of the income received. This is a good option if your business-related expenses are small, because costs cannot be taken into account in this mode. If expenses make up 65-70% of income, then it is more profitable to choose the simplified tax system Income minus expenses. Individual entrepreneur taxes in this case will be lower, because are calculated at a rate of 5% to 15% on the difference between income and expenses. The permitted types of activities on the simplified tax system almost coincide with the types of activities available to any individual entrepreneur on the OSNO.
- Unified agricultural tax or agricultural tax is a favorable regime in which you only have to pay 6% of the difference in income and expenses. True, only individual entrepreneurs who produce their own agricultural products or are engaged in fish farming can use it.
- UTII or single tax on imputed income is a taxation system, the peculiarity of which is that it taxes not the income that the individual entrepreneur actually receives, but that calculated by the state. The types of activities on the EBND are limited - you cannot engage in production, wholesale trade, or construction. The list of permitted areas of activity includes services, transportation and retail.
- PSN or patent taxation system. This is the only tax regime intended only for individual entrepreneurs. Very similar to UTII, because Taxation is also imposed not on real income, but on state-calculated income. The types of activities are largely the same as for the imputed tax, but small-scale production is also allowed: felted shoes, glasses, business cards, carpets, agricultural implements, dairy products, bread, sausages, etc.
- NAP or professional income tax is a new regime that is currently in effect in 23 regions of the Russian Federation. It can only be used by individual entrepreneurs without employees who are engaged in providing services, performing work and selling goods of their own making.
All special taxation systems (USN, Unified Agricultural Tax, PSN, UTII, NPD) require the entrepreneur to comply with many conditions: limiting the number of employees, limiting income received, certain types of activities, etc. Choosing a taxation system taking into account all the criteria is already turning into a difficult task, and After all, individual entrepreneurs have an obligation to pay, in addition to taxes, also insurance premiums for themselves.
Contributions made by individual entrepreneurs for themselves are contributions to pension and health care funds. Every year, the state calculates a fixed amount that the individual entrepreneur must pay, regardless of whether he worked and whether income was received. In 2020, the fixed amount of entrepreneurial contributions for himself is 40,874 rubles. If your income for the year exceeded 300,000 rubles, then contributions to the Pension Fund are calculated additionally, based on 1% of income above the limit.
Are you planning to open a sole proprietorship? Don’t forget about a current account - it will simplify doing business, paying taxes and insurance premiums. Moreover, now many banks offer favorable conditions for opening and maintaining a current account. You can view the offers on our website.
Individual entrepreneur taxes on OSN
The general taxation system is not used very often by individual entrepreneurs. The use of OSN requires the payment of the following taxes by individual entrepreneurs:
- Personal income tax or personal income tax (which is paid on all income of an individual entrepreneur);
- VAT or value added tax;
- property tax (which the individual entrepreneur uses for business purposes);
- land tax.
Being on the General Taxation System (GTS), the individual entrepreneur pays VAT and personal income tax “for himself”.
Thus, while on the OSN, an individual entrepreneur pays at least two taxes.
Individual entrepreneur taxes on UTII
Since 2013, the transition to paying a single tax on imputed income (UTII) has been voluntary. The amount of this tax is determined by a special formula. To calculate the amount of UTII tax, the value of the basic profitability of an individual entrepreneur is taken, which is established by the government authority of the constituent entity of the Russian Federation. The tax calculation formula also includes coefficients that reflect the specifics of the individual entrepreneur’s work.
The single tax on imputed income is suitable for entrepreneurs who have a constant and stable income.
When applying UTII, the amount of tax payment does not depend on the actual income of the individual entrepreneur. Therefore, if the expected income is low, it is better not to apply UTII, but to use a different taxation system.
Please note that from 2020, UTII will be abolished for those entrepreneurs who sell labeled goods (furs, clothing, shoes, medicines, etc.). And from 2021, UTII is planned to be completely abolished.
How to correctly calculate the tax burden
To understand which taxation system for individual entrepreneurs will be the most profitable, it is necessary to make a preliminary calculation. Let's do it, for example, for household trade services.
The individual entrepreneur provides landscape improvement services in the city of Ramenskoye, Moscow region. The company operates without hiring employees.
Data for calculation
For individual entrepreneurs on UTII, contributions from excess income over 300 thousand rubles are calculated based on imputed, and not real, income, as on the simplified tax system. For this type of activity, the amount of imputed income for the quarter amounted to 43,087 rubles and did not exceed 300 thousand rubles. Accordingly, the individual entrepreneur does not pay the contribution from the excess to UTII in this example.
Since the general taxation system in this case is unprofitable by default, we will not consider it and will focus only on special taxation regimes. We will consider the tax burden for each tax regime separately so as not to get confused.
USN Income
Taxation of individual entrepreneurs on a simplified basis is quite simple. To calculate tax, you do not need to look for the values of special coefficients and imputed income. The payment is calculated based on the income received: Income x 6% – insurance premiums
.
Since the individual entrepreneur does not have hired employees, he can reduce the tax on all insurance premiums without limitation. The amount payable to the budget will be: (1,420,000 x 6%) – 20,260 = 64,940 rubles
.
When calculating your tax, pay special attention to the rate under the simplified tax system “Income” established in your region. It can be reduced to 1%. This is due to the fact that regions themselves have the right to set preferential rates under the simplified tax system.
USN Income minus expenses
We calculate the tax using the following formula: (Income – Expenses) x 15%
.
The amount payable to the budget is equal to (1,420,000 – 970,260) x 15% = 67,461 rubles
.
In this version of the simplified tax system, the standard tax rate can also be reduced by regulations of the constituent entities of the Russian Federation, from 15% to 5%.
UTII
The tax on UTII is more difficult to calculate than on the simplified tax system. To do this, you need to know the values of K1 and K2, the physical indicator and the basic profitability. The calculation formula is as follows: Basic profitability x Physical indicator x K1 x K2 x 15% x 3 months
, Where:
- basic income for household services* – 7,500 rubles;
- physical indicator – 1 (number of employees, including individual entrepreneurs).
- K1 – 1.915 (in 2020).
- K2 – 1 (in accordance with the Decision of the Council of Deputies of the Ramensky Municipal District dated November 14, 2012 No. 13/4-SD).
*In accordance with Government Order No. 2496-r dated November 24, 2016, landscape improvement activities (OKVED 81.30) are classified as household services for the purpose of applying UTII.
We calculate the tax using the above formula: 7,500 x 1 x 1.915 x 1 x 15% x 3 = 6,463 rubles
.
In order to reduce the imputed tax on insurance contributions, they must be paid in the quarter for which the tax is calculated. The law also allows for the possibility of paying contributions before submitting a declaration for the reporting period. For example, in order to reduce UTII by contributions for the 1st quarter of 2020, an individual entrepreneur must pay them before April 22. We reduce the tax on insurance premiums: 6,463 – 9,059.5 = 0 rubles
.
Since the insurance premiums transferred for yourself significantly exceed the amount of tax, you will not have to pay anything to the budget. The individual entrepreneur will only need to pay a fixed payment for compulsory medical insurance and compulsory medical insurance.
PSN
The tax on the patent system, as well as on UTII, is calculated based on the income established by the state. Real income has no effect on the value of a patent. Thus, the formula for calculating the tax on PSN is as follows: Potentially receivable income x 6%
.
This formula calculates the tax for the year, but if you need to calculate the cost of a patent for an incomplete year, the formula will be like this:
Potential income x 6%: 12 x number of months for which the patent is purchased
You can find out the amount of income established by the state in the law of the region in which the individual entrepreneur will operate. In our case, this is the Law of the Moscow Region dated November 6, 2012 No. 164/2012-OZ. You can also find out the cost of a patent on the Federal Tax Service website, indicating only the region in which the activity will be conducted, the type of activity and the number of employees.
Income for landscape improvement activities in the Moscow region is 208,804 rubles. provided that the individual entrepreneur has no employees. If you have employees, income will be higher. Thus, the cost of a patent for 3 months in our case will be (208,804 x 6%): 12 x 3 = 3,132 rubles
. The individual entrepreneur will have to transfer this amount in a lump sum before the expiration of the patent.
The disadvantage of PSN is that the taxation of individual entrepreneurs in this regime does not provide for the possibility of taking into account insurance premiums when calculating a patent. This must be taken into account when calculating the tax burden under this regime.
Individual entrepreneur taxes on the simplified tax system
The simplified taxation system or simplified taxation system is the most popular taxation system among small businesses. This taxation system provides for payment of tax quarterly.
An individual entrepreneur has the right to choose the object of taxation:
- income (tax rate - 6%);
It is worth noting that in accordance with the federal law dated July 13, 2015 No. 232-FZ, signed by the head of state, “On Amendments to Art. 12 of Part I and Part II of the Tax Code” changes will affect simplified tax rates. Thus, the regional government has the right to approve the corresponding law of the subject of the Federation and set a rate from 6% to 1% for various taxpayers. Those. regulation of rates is now possible at the regional level, and some regions have already reduced these rates.
- income reduced by the amount of expenses (tax rate - 15%).
The individual entrepreneur tax in this case is an income tax. Subjects of the Federation may establish reduced rates (but not lower than 5%) for various groups of taxpayers and/or types of activities.
Example
An entrepreneur operates on a simplified taxation system, in which income is taxed at a rate of 6 percent. He pays tax only if he has income. A business representative is registered as an employer, since he hired a staff of employees to ensure the planned activities. He is obliged to pay wages to each employee in accordance with the employment contract, regardless of the amount of income received. Additionally, contributions accrued to the employees' wage fund are withheld.
Additional payments and taxes for individual entrepreneurs
Today, there are some types of business activities that require the payment of additional taxes. These activities include the following:
- water tax (for the use of water bodies);
- mineral extraction tax;
- tax on the production (sale) of excisable goods.
Individual entrepreneurs who have licenses (special permits), in addition to paying taxes, must make payments for the use of subsoil, pay fees for the use of objects of aquatic biological resources and objects of wildlife.
Property tax
Until January 1, 2020, individual entrepreneurs applying special tax regimes were exempt from paying property tax. Since January 1, 2020, they have such an obligation.
In paragraph 1 of paragraph 3 of Article 346.11 of the Tax Code of the Russian Federation, a clarification is made that entrepreneurs do not pay property tax unless their property is included in the cadastral list of the region.
Thus, if an individual entrepreneur owns property included in the list of real estate objects in respect of which the tax base is determined as cadastral value, and uses it in business activities, he is obliged to pay property tax, regardless of what taxation system he applies.
The list of real estate objects for which the tax base is determined as the cadastral value must be posted on the official website of the Federal Tax Service or on the official website of the constituent entity of the Russian Federation. Responsibility for this lies with the authorized executive authorities of the constituent entities of the Russian Federation, in accordance with clause 7 of Article 378.2 of the Tax Code of the Russian Federation.
What objects may be included in this list:
- administrative and business centers;
- shopping centers;
- separate premises in administrative, business and shopping centers;
- non-residential premises, the purpose of which, in accordance with cadastral passports of real estate objects or technical registration documents of real estate objects, provides for the placement of offices, retail facilities, public catering and consumer services, or which are actually used for the placement of offices, retail facilities, public catering and consumer services .
Profit taxes
If there is no profit, then the payment of taxes depends on the taxation system. Yes, sometimes you still have to pay tax.
In this situation, no tax is paid on the simplified tax system. There is no need to notify the tax office that you do not pay tax because you have not earned anything. You simply don’t pay, but the zero tax return is submitted on time.
On a patent, tax is paid regardless of income.
Tax on UTII must be paid, since it does not depend on income, but is a fixed amount. As Yulia Kuznetsova, a professional accountant and author of the “Glorious Accountant” project, explains: “UTII is calculated and paid in accordance with paragraph. 2 tbsp. 346.27, paragraph 1 of Art. 346.29 of the Tax Code of the Russian Federation, based not on the income actually received, but on the imputed object of taxation. Therefore, whether or not the UTII payer actually conducts business and receives real income does not matter.” There is no tax to be paid on the Unified Agricultural Tax, since it is the product of the tax rate and the tax base (profit - production costs). No profit - no tax.
On OSNO everything is always more complicated. Yulia Kuznetsova explains: “Personal income tax is paid if there is a payment to employees or under GPC agreements, it does not depend on profit. VAT - if there is a sale, then VAT is paid. It may not be paid if the amount of input VAT is greater than the output VAT.”
But! On OSNO without income, zero reporting is still submitted: zero VAT return, zero income tax return, zero 3-NDFL return.
Land tax
Individual entrepreneurs pay land tax, just like individuals, on the basis of a tax notice. The tax authority sends a notification to the taxpayer no later than 30 days before the payment is due. The notification must indicate the calculation of the tax base, the amount of tax to be paid, and the deadline for its payment.
If for some reason you have not received such a notification, contact the inspectorate in person so as not to miss the payment deadline. The payment deadline is October 1, with the exception of Moscow and St. Petersburg, whose authorities have the right to set the deadline and procedure for paying land taxes.
All additional taxes (payments, fees) are paid by an individual entrepreneur, regardless of the taxation system in which he is located.
The material has been edited in accordance with changes in legislation relevant as of 09/03/2019
Value added tax
The general tax regime for individual entrepreneurs provides for the payment of VAT in a manner similar to that established for organizations. The procedure for accrual and payment is regulated by Chapter 21 of the Tax Code of the Russian Federation. In 2020, the tax rate can be 20, 10 and 0% depending on the goods sold, work performed or services provided.
VAT accrual is calculated as the product of the tax base (sales amount or prepayment received from buyers) by the tax rate. The payer has the right to reduce the tax calculated in this way by the amount of the tax deduction: the amount of VAT on goods, works and services received.
Individual entrepreneurs submit their reporting to OSNO regarding VAT in the general manner. The tax return was approved by Order of the Federal Tax Service dated October 29, 2014 No. ММВ-7-3/ [email protected] It must be submitted quarterly no later than the 25th day of the month following the reporting quarter.
Individual entrepreneur on OSNO, as a VAT payer, must issue invoices to customers and maintain a sales book and a purchase book in accordance with Government Decree No. 1137 dated December 26, 2011.
With revenue less than 2 million rubles. for the last three months, the entrepreneur has the right to be exempt from VAT in accordance with Art. 145 of the Tax Code of the Russian Federation.
This might also be useful:
- What taxes does the individual entrepreneur pay?
- Calculation of income tax from salary
- Tax system: what to choose?
- The amount of insurance premiums for compulsory health insurance and compulsory medical insurance for individual entrepreneurs in 2020
- Changes in individual entrepreneur taxation in 2020
- How to open an individual entrepreneur: step-by-step instructions
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Mikhail 01/20/2016 at 11:13 pm # Reply
Pensioners and mandatory payments to individual entrepreneurs
Colleagues, I will retire soon, but I want to become an individual entrepreneur. The tax regime is most likely the simplified tax system. Do I need to make a payment: Contribution to the Russian Pension Fund (PFR)?
Natalia 01/21/2016 at 08:17 # Reply
Mikhail, good afternoon. According to the current legislation of the Russian Federation, you are required to make payments to the Pension Fund and the Federal Compulsory Medical Insurance Fund as soon as you register as an individual entrepreneur, even if you are a pensioner. The legislation does not provide any tax breaks for individual entrepreneurs. Moreover, from 2020, working pensioners do not have the right to annual indexation of pensions.
Mikhail 02/03/2016 at 07:17 # Reply
Again please! Do I need to pay 1% on the amount over 300,000 rubles on UTII?
Natalia 02/05/2016 at 15:00 # Reply
Mikhail, good afternoon. When applying UTII, if the imputed income exceeds 300,000 rubles, you must pay 1% on this amount to the Pension Fund until 1.04 of the year following the reporting year. Your actual income does not matter in this case. The calculation is based on imputed income, from which 300,000 must be subtracted.
Tatyana 02/05/2016 at 15:00 # Reply
Hello. I register as an individual entrepreneur for house decoration, can I get a tax holiday?
ostapx1 02/05/2016 at 15:22 # Reply
Hello Tatiana! Regions have the right to introduce tax holidays. But only some regions took advantage of this right. Therefore, you need to study the legislation of your region in this regard.
Natalia 06/27/2016 at 01:02 pm # Reply
Tatyana, you can take advantage of tax holidays if the authorities of your region have adopted a corresponding law. The Federal Law allows the use of tax holidays, but for this there must be a decision of the local legislative assembly.
Alexander 02/21/2016 at 11:10 am # Reply
Hello, what taxes exist for private household plots and are there any concessions?
Natalia 02/21/2016 at 12:38 # Reply
Alexander, good afternoon. In Art. 2 of the Law of 07.07.2003 No. 112-FZ “On personal subsidiary plots” defines personal subsidiary plots (abbreviated as private household plots). Private household plots are a form of non-entrepreneurial activity for the production and processing of agricultural products. Those. You do not need to register as an individual entrepreneur. The Tax Code of the Russian Federation exempts from taxation the income of citizens received as a result of the sale of livestock and crop products grown in private household plots. But at the same time, the following requirements of the Tax Code of the Russian Federation must be met: 1. The total area of the land plot (plots), which (are) located (at the same time) under the right of ownership and (or) other right of individuals, does not exceed the maximum size established in in accordance with paragraph 5 of Art. 4 of Federal Law No. 112-FZ. Each region has the right to set maximum plot sizes by regulatory legal acts of local governments. 2. The taxpayer must maintain private household plots without the involvement of hired workers. Only family members can be involved in work. 3. The taxpayer must submit to the tax authority a document issued by the relevant local government body (the board of a horticultural, gardening or dacha non-profit association of citizens), confirming that the products sold were produced in his private household plot; Despite the fact that clause 4 of Article 2 of the above-mentioned Law establishes that “the sale by citizens running a private subsidiary plot of agricultural products produced and processed during the conduct of a private subsidiary plot is not an entrepreneurial activity,” it must be borne in mind that if You sell most or all of the products grown in private household plots and purchase and sale transactions are concluded constantly, and the buyers are individual entrepreneurs or organizations, then the tax authorities may consider the activity to be entrepreneurial. If you are the owner of a private household plot and registered as an individual entrepreneur, then tax inspectors almost always try to include income from the sale of agricultural products grown in the private plot in his income from business activities, on the general basis required for individual entrepreneurs.
Elena 03/04/2016 at 11:27 # Reply
I am an individual entrepreneur on the simplified tax system. I paid the mandatory payment to the Pension Fund and 6%. can I withdraw the rest of the money from the account for myself? Or do I need to pay personal income tax on this amount?
Natalia 03/04/2016 at 20:38 # Reply
Elena, good afternoon. You can safely manage the entire amount in your current account, the main thing is not to violate the deadlines for paying advance payments of the simplified tax system and contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund. Individual entrepreneurs on the simplified tax system without employees do not pay personal income tax.
Alexander 03.23.2016 at 20:26 # Reply
Good afternoon Please specify which amount of income is subject to 1% tax. Real income or imputed income i.e. settlement for individual entrepreneurs.
Natalia 03.23.2016 at 21:56 # Reply
Alexander, good afternoon. Your question, as far as I understand, refers to the additional contribution to the Pension Fund - 1%. If so, then 1% under the simplified tax system is taken from the difference between total income and 300 thousand rubles, under UTII the difference from imputed income and 300 thousand rubles is taken, under PSN the difference between potentially possible income and 300 thousand rubles is taken.
Anatoly 04/19/2016 at 09:44 # Reply
Good afternoon Are there tax benefits for individual entrepreneurs if it is registered in the name of one of the parents of a large family?
Natalia 06/27/2016 at 01:18 pm # Reply
Anatoly, good afternoon. There are no tax benefits for individual entrepreneurs if they are one of the parents of a large family. There are tax benefits for large families, whether you are an individual entrepreneur or not - personal income tax deduction, for transport tax, for property tax. At the federal level, there is not a single federal law regulating the rights and freedoms of large families; this is provided for by the regional legislation of the region where you live .
Victoria 06/09/2016 at 08:05 # Reply
If I open an individual entrepreneur, how much% will I pay monthly to the Pension Fund?
Natalia 06/27/2016 at 13:00 # Reply
Victoria, good afternoon. An individual entrepreneur without employees is required to pay fixed contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund, regardless of the amount of actual income, in an amount depending on the minimum wage. In 2020, the minimum wage is 6,204 rubles for the payment of fixed contributions. Therefore, during the year, until December 31, 2016, you must pay: to the Pension Fund - 6204 x 26% x 12 months = 19356-48 to the FFOMS - 6204 x 5.1% x 12 months = 3796-48 You can pay in any amount monthly or one-time at the end of the year.
Evgeniya 06/27/2016 at 12:20 # Reply
Hello, please tell me, I want to open an individual entrepreneur and rent a small room 2x3m for a shop of handmade goods. Approximately how much will this cost me? I live in the Voronezh region. Thank you.
Natalia 06/27/2016 at 01:11 pm # Reply
Evgeniya, it all depends on the taxation system you choose. The only constant amount for individual entrepreneurs without employees is fixed contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund - 23,153-33 rubles. When choosing PSN or UTII, paying taxes will not depend on your actual income; with the simplified tax system, you will pay either 6% of income or 15% of the difference between income and expenses. In the Voronezh region, each municipality has the right to independently apply tax rates, everything depends on where you will carry out your activities. For example, with a sales area of 6 sq m, in the Borisoglebsk district for 12 months the PSN will be 30,000 rubles. For UTII, you need to know the adjustment coefficient k2 for your district.
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What should an individual entrepreneur pay under the general taxation system?
An individual entrepreneur operating under OSNO pays the following taxes:
VAT
The tax base is the cost of services provided, work performed or goods shipped. Accrual occurs at rates of 0%, 10% or 20% - depending on what services were provided or goods were supplied. The basic rate for most entrepreneurs is 20%, introduced on January 1, 2019.
It would seem that you will have to pay a lot. But on the other hand, an individual entrepreneur, being a VAT payer, has every right to accept VAT for deduction if it is highlighted in the invoices submitted to him by contractors and suppliers. Value added tax can be deducted only if there is an invoice and the services or goods are capitalized according to all the rules.
Example. The individual entrepreneur received an income of 10,000 rubles including VAT. Tax calculation: (10000/120%)*20% = 1666.7 rubles. But he purchased the same goods from the supplier for sale in the amount of 6,000 rubles. The VAT allocated in the invoice is equal to 1000 rubles. This means that 1666.7 – 1000 = 666.7 rubles are due for payment.
VAT is calculated quarterly, but it must be paid in installments within three months after the end of the quarter. Let me explain. If we take the second quarter of 2020 as an example, then 1/3 of the VAT must be paid by July 25, the second third by August 25, and the last third by September 25.
Attention! Individual entrepreneurs whose total revenue for 3 months of the quarter did not exceed 2 million rubles can receive an exemption from VAT, but only if they have the appropriate supporting documents.
Personal income tax
The tax base is income from business activities, reduced by the amount of tax deductions. If the entrepreneur is a resident of the Russian Federation, then the rate is 13%; for non-residents it is increased to 30%.
Paid for the first half of the year - until July 15, for the third quarter - until October 15, for the fourth quarter - until January 15 of the year following the reporting year. There is also a possible additional payment - it is carried out at the end of the year. The basis for it is a tax return. The additional payment must be transferred by July 15 of the year following the reporting year.
That is, if according to the declaration for 2020, which is submitted by an individual entrepreneur , there is an underpaid personal income tax, then it must be paid before July 15, 2020.
An individual entrepreneur working under the simplified tax system is exempt from paying income tax. Read more HERE.
On property
For an individual entrepreneur, the peculiarity of paying property taxes - property, transport, land - is that he carries them out as an individual. Just as a person paid, for example, car tax, he will pay it after registering as an individual entrepreneur.
Special
These include:
- water tax,
- for mining,
- for the gambling business,
- customs and government duties.
Paid if required by the type of activity.
A frequently asked question is: does an individual entrepreneur pay income tax if he is on OSNO?
Individual entrepreneurs are exempt from paying income tax. Only organizations are burdened with it.
Insurance premiums for compulsory medical insurance and compulsory medical insurance
Nobody canceled them. Only from 2020, insurance premiums need to be paid not to the Pension Fund, but to the Federal Tax Service. The amount of contributions is fixed, but changes every year. In 2020 you need to pay:
- for pension insurance - 29,354 rubles;
- for health insurance - 6884 rubles.
If an individual entrepreneur earns more than 300 thousand rubles in a year, then an additional 1% of the amount exceeding 300,000 is paid.
These were all the contributions that an individual entrepreneur pays if he operates without employees.
