In 2020, specialists from the Ministry of Labor and the Pension Fund of Russia analyzed the real state of affairs related to the official employment of the population in our country.
Thus, in 2020, about 24 million Russians have shadow income and are in one way or another involved in “gray” economic schemes. Among them, special mention should be made of persons who conduct business activities without any registration and accounting by regulatory authorities.
This situation has a negative impact both on public finances, since the treasury is deprived of significant tax revenue, and on the citizens themselves, who for this reason may be deprived of many social benefits.
However, today the Government has developed mechanisms that encourage citizens to legalize their activities and their income. In the article we will examine the questions of what self-employment is, how the activity works and what they can do.
The concept of self-employed citizens
Self-employment is the activity of citizens who offer services or sell goods that they themselves worked on producing, without being employed in any organization, or registered as individual entrepreneurs.
It is extremely important to note here that this category of citizens does not engage third parties to sell goods or provide services , that is, they work exclusively independently.
In practice, the self-employed have been outside the legal framework for a long time. The only way for them to legalize their activities was to register as an individual entrepreneur or create a legal entity.
However, it should be understood that the income of the self-employed is quite low, and the costs associated with running the same individual entrepreneur can have an extremely negative impact on the financial situation of a citizen.
Reference! Despite periodic raids by tax officials who fined self-employed citizens for illegal business activities, this category of persons did not strive to conduct their activities within the framework of the forms established by law.
What to do for self-employed people who do not live in experimental regions
The place of residence does not matter for the application of the special professional tax regime. The use of a special regime is permitted when carrying out work on the territory of the experiment. In the application for switching to professional tax, the applicant independently indicates the region in which he works.
The duration of the experiment is 10 years. Now self-employed citizens working in the desired subject of the Russian Federation have the right to register; their regions of residence do not matter. But for those who are both registered and operating in areas outside the experimental zone, it is not yet possible to use the regime. It remains to be seen that it will spread to other regions.
Let's summarize: the law on types of activities for self-employed citizens has not been adopted and does not exist in the legislative system of the Russian Federation, but there are certain restrictions and requirements in Federal Law-422, and we have to focus on them.
Who is included in the self-employed population?
The Government of the Russian Federation, in agreement with relevant institutions and services, proposed a different, softer approach, providing the opportunity for the self-employed to work legally. As an experiment, a special preferential tax regime was introduced in certain regions of our country in 2020.
It should be noted that current legislation does not operate with this term. The mechanism for the legalization of self-employed citizens is established by Federal Law No. 422-FZ of November 27, 2020. This regulatory document introduces a special tax on professional income.
The law establishes specific requirements for persons who can take advantage of this tax regime. Thus, compliance with these criteria determines the citizen’s status as self-employed.
Next, we should examine in detail the conditions under which the tax regime in question can be applied:
- Lack of hired workers . A person must carry out his activities personally, without the involvement of third parties.
- The maximum income should not exceed 2 million 400 thousand rubles. In this case, we are talking about the total annual income of a citizen. If at the end of the year it turns out that it exceeds this amount, then this tax regime does not apply. In this case, the size of the monthly income of a self-employed person does not matter.
In addition, even if the conditions specified above are met, citizens who sell excisable goods cannot be considered self-employed.
Important! Both citizens who have not previously been registered as individual entrepreneurs and existing entrepreneurs can be recognized as self-employed if they meet the conditions stated above.
Persons with citizenship of foreign states that are members of the EAEU can also be recognized as self-employed.
It is also useful to read: How pensions are calculated for the self-employed
Law on self-employed
From January 1, 2020 to December 31, 2028, in several regions of the country (Moscow, Moscow Region, Kaluga region and Tatarstan), draft federal law No. 551845-7 was introduced, according to which it is proposed in these areas to conduct an experiment to establish a special tax regime “Tax on professional income".
Its goal is to simplify the taxation process for those who work for themselves. That is, just for those who worked in the “gray” zone of the economy, without showing their income. The only way for them before was to open an individual entrepreneur. But the majority rejected this option, because an individual entrepreneur needs to pay 13% personal income tax, or 6% of income. And the income from this type of employment is already small.
Activities
Until 2020, citizens who had to pay personal income tax on their income were recognized as persons providing the following services:
- care for elderly people, as well as those with chronic diseases and those in need for medical reasons;
- tutoring;
- help on the farm.
Today, in the new realities of the preferential tax regime, this list should be significantly expanded. However, today the legislation does not contain a list of specific professions whose representatives can be recognized as self-employed. According to the leaders of the economic block of the Government, the corresponding list will be compiled without fail, but not earlier than in the second half of 2020.
With all this, if we proceed from the current legal norms that establish requirements for the self-employed, the latter include persons:
- providing construction and repair work;
- renting residential premises (including daily and longer term);
- working remotely through electronic platforms on the Internet (freelancers);
- providing legal and accounting services privately;
- providing cosmetic services (including at home);
- selling goods (including food products) produced independently.
Attention! In addition, tutors, as well as persons caring for elderly and sick citizens, as well as helping with housework, will be able to use the new special regime.
Benefits of self-employment
The choice between the status of self-employed and entrepreneur primarily depends on the type of activity. The arguments in favor of self-employment compared to opening an individual entrepreneur are:
- lower tax (4 or 6% of revenue);
- no need to submit reports;
- the opportunity not to work overtime, to plan your own weekends and vacations;
- absence of tax audits;
- provision by the state of a tax deduction of 10,000 rubles. (amount allocated in advance to reduce tax).
In addition, certain categories of self-employed people are exempt from personal income tax (Clause 70, Article 217 of the Tax Code of the Russian Federation). Among them:
- caring for the sick, children, people over 80 years of age, and other citizens in need of care;
- tutors;
- busy with housekeeping and cleaning of living quarters.
However, if the amount of total income exceeds 2.4 million rubles per year, the self-employed person is obliged to register as an entrepreneur and accept all obligations corresponding to this status.
Article 217 of the Tax Code of the Russian Federation
Can a self-employed person provide services to legal entities?
Current legislation does not limit the number of clients of self-employed persons. They can be both private individuals and legal entities, as well as individual entrepreneurs. It should be noted that when working with organizations, citizens will have to pay income taxes at an increased rate. However, there are certain restrictions.
Thus, a person cannot work within the framework of it with the organization in which he is employed. This is due to the fact that their relationship is regulated by an employment contract. Also, NAP cannot be applied when providing services to legal entities, provided that the self-employed person previously worked in an organization, and after dismissal the two-year period has not passed.
Do self-employed people need a stamp?
First of all, you need to know that there is no separate federal law on mandatory printing. This is, firstly.
Secondly, a self-employed person works through the “My Tax” mobile application and other closing documents, except for the fact that this application does not issue a check. Accordingly, he will not need a seal for this.
But at the same time, if a self-employed person plans to work with legal entities, then he will have to certify the documents. Only today documents are certified by the signature of an authorized person. After all, for official papers a signature with a transcript is sufficient. (another thing is that many companies are so accustomed to stamps on documents that they require them where they are not necessary).
There are also no prohibitions on obtaining a seal for the self-employed. Therefore, it makes sense to formalize it only if the self-employed person plans to work with legal entities (don’t forget that the issue of transferring payment to accounts is not yet completely clear), or if the self-employed person plans to enter into an official contract.
In all other cases, printing will only be a waste of money.
But if you still decide to order a print, then what should be on its print?
- Full name
- TIN
- An indication that you are an NAP payer.
Any additional information is at the discretion of the self-employed person.
Now let's move on to the next global issue.
Subtleties of drawing up contracts with self-employed people
Legal entities that work with self-employed people must document the relevant relationship contractually. This could be a contract, provision of services, purchase and sale, and so on.
The biggest questions arise in this case regarding the procedure for payment for services or goods. Thus, when making a transaction, organizations need to have primary documents related to settlements. Such a document on the part of the self-employed can be a special check, which is generated using the “My Tax” mobile application.
The check can be provided in either paper or electronic form. It should also be noted the features of the form of payment. It can be carried out either in cash or in non-cash form. However, there are no limits for cash payments in this case.
In addition, payment can be made to any bank account of a self-employed person. Thus, the law does not oblige a person providing services or selling goods under a preferential tax regime to have a special bank account for transferring funds from legal entities.
Important! The terms of payment, including its form, must be clearly stated in the relevant agreement.
How to pay taxes as a self-employed person
The tax for self-employed people is called NPA - tax on professional activities.
For convenience, the “My Tax” application has been developed, which simplifies reporting. In it, the self-employed person needs to indicate the amount he receives for a product or service. A check is issued. All this is income registration.
Next, the self-employed person receives a notification from the tax office with the total tax amount for the previous month. Calculations are performed automatically, so there is no need to waste time on this.
The tax amount is transferred by the 25th day of the month following the reporting month. Payment can be made from a bank card.
Regions for the self-employed from 2020
The introduction of a new tax regime is experimental in nature. So, from 2020, that is, from the moment the corresponding federal law came into force, the new rules were extended to only four subjects of the Federation: Moscow, Moscow, Kaluga regions, as well as the Republic of Tatarstan.
From January 1, 2020, the following regions joined the experiment:
Republic of Bashkortostan, the city of St. Petersburg, Perm, Krasnoyarsk territories, Voronezh, Leningrad, Volgograd, Novosibirsk, Nizhny Novgorod, Chelyabinsk, Omsk, Tyumen, Sverdlovsk, Samara, Sakhalin, Rostov regions, as well as autonomous okrugs - Khanty-Mansiysk, Yamalo-Nenets , Nenetsky.
It should be noted that the above-mentioned subjects of the Federation are among the leaders in socio-economic development in the country.
That is why it was decided to begin applying the new tax regime in these regions. In addition, in 2019 alone, more than 200 thousand applications from self-employed citizens were registered in the territory of the first four constituent entities.
According to Government representatives, the estimated date for introducing the new tax regime throughout the country is the second half of 2020.
Restrictions
There are territorial restrictions: until 2020, as an experiment, the NAP regime was used only in 4 regions:
- Moscow;
- Moscow region;
- Kaluga region;
- Tatarstan.
Since 2020, 19 more regions have been added to them.
In addition to the listed restrictions (territorial, personnel and financial), there are also restrictions on types of activities for the self-employed; they are listed in Art. 4 FZ-422. The following are not entitled to switch to the professional tax regime:
- selling excise and labeled goods (the government plans to switch to almost universal labeling of products and goods by 2024);
- resellers;
- persons engaged in the extraction and sale of minerals;
- persons conducting business in the interests of third parties and concluding agreements with these third parties: orders, commissions, agency agreements;
- citizens delivering goods and products associated with accepting payments in the interests of other persons, with the exception of cases of using cash register equipment.
It should also be taken into account that professional tax cannot be applied in parallel with other taxation systems.
How to apply for self-employment
Persons who meet the criteria for recognition as self-employed and wish to work legally have the right to contact the tax office with a corresponding application.
You can submit it in the following ways:
- direct to the Federal Tax Service;
- through the portal “State Services”;
- through your personal account on the website of the fiscal authority;
- through the mobile phone application “My Tax”.
To register, all you need is an application and a copy of your passport with a photo.
Reference! If registration is carried out using the State Services portal, a copy of your passport with a photo is not required.
It should be noted that the date of registration corresponds to the date of filing the application. In general, the procedure for registering self-employment is simplified as much as possible. There is no state fee for filing an application.
How to become self-employed?
In order for the self-employed to pay taxes, they try to simplify everything as much as possible. Including the registration process.
Step 1. Download the application.
In order to register as self-employed, you will need to download the “My Tax” application to your mobile device. This can be done on the official website of the Federal Tax Service.
This page contains detailed instructions for the application, and at the very bottom there are two download links from the AppStore and GooglePlay stores.
Step 2. Register.
There are two ways to do this. The first is through the taxpayer’s personal account, if you have one. You will need a password and TIN. The second is using a passport. It will need to be scanned.
Step 3: Wait for the background check.
Note:
If you are switching from individual entrepreneur status to self-employment, you will need to send an application to the tax authority within 30 days after registration stating that you are switching to a different taxation system.
If, on the contrary, from PND to the simplified tax system, then the application must be submitted within 20 days.
If you don’t do this, you will be tied to a general taxation system, which is not very pleasant.
How do self-employed people pay taxes and can they receive a fine for failure to fulfill this obligation?
There are two tax rates established by law:
- 4% – when working with citizens;
- 6% – when working with legal entities.
The reporting period in this case is one month. There is no need to provide tax returns for self-employed people.
Penalties are provided for if a self-employed person fails to issue a check when providing a service or selling a product. In this case, for the first violation, he may be fined 20% of the amount of the outstanding check.
Subsequently (if the violation is repeated within six months), the citizen will be fined for the full amount of the unissued payment document. There are no other sanctions provided in this case.
Closing documents for self-employed people
A very private and important question. What to consider as closing documents from self-employed people. This is especially true for companies and individual entrepreneurs who work with them, because they need to confirm their expenses.
The closing document will be a check that the self-employed person is obliged to issue when paying for his services/goods/work.
If there is no such check, then there is a reason to receive a refusal to account for the expense. Accountants must remember this.
This procedure is regulated by the letter of the Federal Tax Service dated February 20, 2019 No. SD-4-3/ [email protected]
Note: you can store a receipt, including in electronic form, it is not prohibited. You can also print it if you wish.
Can a certificate of services performed be considered a replacement for a check?
No. The same letter from the Federal Tax Service also regulates this issue.
What if the self-employed person does not want to issue a check?
This question is specifically for those who work with the self-employed. But it would also be useful for the payer of the NAP to know what follows for non-issuance of a check.
Firstly, a check is needed as a closing document.
Secondly, you can complain to the tax office about a self-employed person. But you will need to confirm your complaint.
Fines for the employed
Moving on from the previous topic, let's look at what a self-employed person faces if he doesn't issue a check.
A fine may be imposed if a self-employed citizen has not issued a check, as well as if he has violated the terms for issuing the check, which we have already written about above.
The fine will be 20% of the receipt, but not less than 1000 rubles.
If the violation is recorded again within six months, a fine will be charged in the amount of the unissued check, but this time no less than 5,000 rubles.
Reviews from self-employed people about this form of doing business
I like the fact that the procedure for working with the Federal Tax Service is as simplified as possible. This applies to both registration and payment of tax payments. However, there is no guarantee that after the experiment the requirements will not be tightened.
Olga, city of Salavat, Republic of Bashkortostan.
I do apartment renovations in Moscow and the region. I have a good income, but I am officially unemployed, so I did not have the opportunity to go to the bank to get a mortgage. I registered as self-employed and can now provide all the necessary official information about my financial situation, which is good news.
Sergey, Klin city, Moscow region.
The new tax regime, according to Government forecasts, will make it possible to bring millions of our compatriots out of the “shadow”. This will give them the opportunity to receive the necessary social benefits, and will also ensure that local budgets are filled, which in the current conditions is extremely important for the regions of the country.
