The main elements of personal income tax. General characteristics of personal income tax

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Value added tax is considered one of the most common in the Russian Federation. Which is not surprising: it is paid from the many incomes of ordinary citizens - individuals. In the article we will consider the main elements of personal income tax, we will present their characteristics. Let's figure out which articles of the Tax Code regulate them.

About tax

Let's begin to consider the essence of personal income tax, purpose, the main elements of this tax.

As the name implies, this tax payment is subject to the entire spectrum of personal income. Personal income tax itself is direct in nature. In Russia, this is a federal tax. That is, it goes to the national, not regional, not local treasury.

The second part of the Tax Code has been the main legal normative act regulating it since 01.01.2009. This is sec. 8 "Federal taxes", Ch. 23 "NDFL".

Taxpayers here are individuals. First of all, tax residents of the Russian Federation. Also, personal income tax is paid by persons who are not tax residents of the state, butearning income in Russia. A list of citizens who are completely exempt from paying income tax has also been introduced. It is presented in Art. 217 NK.

The tax base for personal income tax is the following:

• The payer's income transferred to him in cash.
• Profit received by the payer in kind.
• Income represented by material gain.
• Profit in the form of the right to dispose of some property.

What do you mean?

What is meant by elements of personal income tax? These are the following components:

• Taxpayer.
• Objects of taxation.
• Tax periods.
• Tax bases.
• Tax rates.
• Tax deductions.
• Individual income tax calculation.
• Paying tax.
• Reporting.

Each of the above elements of personal income tax will be analyzed further in order in detail.

Taxpayers

This item is governed by art. 207 Russian NK. Here is what is presented there regarding personal income taxpayers:

1. All individuals who are tax residents of the Russian Federation.
2. Individuals who are not considered Russian tax residents, but have sources of income in the territory of the Russian Federation.

To deal with this element of personal income tax, you must also submit a definition of a tax resident. This is an individual who actually stays on Russian territory for at least 183 days a year (that is, incontinued for 12 consecutive months). Such a period is not interrupted if an individual has left the Russian Federation for the purpose of education or treatment for a period of less than 6 months.

It is important to note that regardless of the time spent directly on the territory of the Russian Federation, the following citizens will be recognized as tax residents:

• Domestic servicemen.
• Employees of the Russian state authorities and local self-government structures, forced to work outside the Russian Federation on duty.

Object of taxation

Another element of personal income tax. This refers to the income that individual taxpayers receive. It can be expressed in the following ways:

• From profitable sources located both in the Russian Federation and outside the Russian state. In relation to those individuals who legally act as a tax resident of the Russian Federation.
• From profitable sources located specifically in the Russian Federation. In relation to persons who are not legally tax residents of our country.

All of the above is governed by three articles of the Tax Code - 208, 209, 217.

Tax base

What is this element of personal income tax? The tax base here is considered to be all the income of the taxpayer, which was accepted by him both in cash and in kind, in the form of material benefits.

It is important to note that the tax base here is determined by a specific income source. After all, each of the latter has its own taxrates.

For those incomes subject to a 13% rate, the tax base is the monetary value of these incomes, which is reduced by the amount of the tax deduction.

For incomes subject to different tax rates, the tax base is the monetary representation of income without reduction by the amount of the tax deduction.

The following cases stand out separately:

• Profit in kind.
• Receiving income expressed in material benefits.
• Tax base calculated under compulsory pension insurance contracts.
• NB in relation to categories of income from equity participation in the affairs of companies and enterprises.
• Tax base for various operations with securities and various financial instruments in the field of forward transactions.

All of the above is regulated by art. 210-214 of the domestic tax code.

Tax period

The tax period is also an element of personal income tax. In this case, it is the calendar year. The element is regulated by Art. 216 Tax Code.

Tax deductions

Another basic element of personal income tax. There are several categories of deductions:

• Standard.
• Property.
• Social.
• Professional.

Regulating their provisions - art. 218-231 Russian NK.

All the above deductions in the Russian Federation will be relevant only in relation to income subject to this tax onrate of 13%. Let's get to know them in detail.

Standard deductions

As for the standard deductions, they are provided to the payer by one of the withholding agents who is the source of income payments. The latter is elected by the taxpayer himself - he draws up an appropriate application. It is supported by documentation that confirms the right to receive a deduction.

The amount of standard tax deductions can range from 400 to 3000 rubles. The amount depends on the grounds for granting.

Social deductions

A Russian citizen is en titled to tax social deductions if in the current reporting period they incurred expenses related to the following:

• Provision of charitable assistance in monetary terms.
• Cash donations paid/sent by the payer to religious organizations (only for purposes within their statutory activities).
• Payment for education in educational centers, institutions.
• Paying for medical treatment, buying prescription drugs.

Property deductions

Citizen has the right to claim a property deduction in the following cases:

• Sale of property that belongs to him by right of ownership.
• The cost of building your own home. Or to buy a ready-made house, an apartment for living on the territory of the Russian Federation.

At the same time, the deduction is provided for the sale (during the reporting tax period) of any typeproperty of the taxpayer - both movable and immovable. Its (deduction) size will depend on the following:

• The time period during which the citizen was the owner of the property alienated by him.
• A type of realizable property.

The following variations are allowed by law:

• Ownership of any kind of property for 3 or more years. The deduction will be presented in an amount equal to that received by the taxpayer upon sale.
• Property ownership for less than 3 years. There are limitations here. You cannot claim a deduction if its amount exceeds 1 million rubles for property and 125 thousand rubles for any other property.

Such a deduction cannot be received by individual entrepreneurs in the event that they sell property, one way or another related to entrepreneurial activity.

Occupational deductions

The following categories of citizens have the right to receive special professional deductions:

• Individuals engaged in entrepreneurship without registering a legal entity.
• Taxpayers performing work/providing services on the basis of civil law contracts.
• Taxpayers who receive roy alties for the creation/performance/other use of works of art and literature, for scientific achievements, discoveries, inventions, or the presentation of industrial designs.
• Notaries in private practice.
• Lawyers who arefounders of law offices.
• Other persons engaged in private practice in the manner approved by the legislation of the Russian Federation.

Accordingly, they are granted a deduction only according to the amount of actually incurred, documented expenses directly related to their professional activities.

Tax rates

Let's deal with the characteristics of the personal income tax element. In most cases, a rate of 13% applies.

But also introduced a rate of 35%. It is relevant in the following exceptional cases:

• The sum of various prizes and winnings. In the case when its value exceeds 2000 rubles.
• Insurance payments under voluntary insurance contracts (in case of exceeding the established limits).
• Interest income on bank deposits - only in a situation where the limits established by law are exceeded. They are determined at the current refinancing rate for the entire period of accrual of interest on ruble deposits. This rate is floating. As for foreign currency deposits, an increased taxation applies if the interest on them exceeds 9%.
• Savings on interest as a result of obtaining borrowed funds and exceeding the limits set for them.

A rate of 30% is valid for non-residents of the Russian Federation who receive income in Russia.

The tax rate of 9% is relevant in relation to profit from equity participation (dividends). There is also a 9% tax on interest on mortgage-backed bonds issued before2007-01-01, profit of the founders of trust management with mortgage coverage, received on the basis of the purchase of a mortgage participation certificate issued before 2007-01-01.

All of the above is also regulated by the Tax Code. In this case, attention should be paid to Art. 224.

Calculation of taxes

Also one of the main elements of the personal income tax. In this context, the payment amount is considered to be the share of the tax base corresponding to the established rate. The total amount of personal income tax will be calculated at the end of the tax period in relation to all income of the taxpayer (meaning the profit that he received during the tax reporting period).

As for this main element of personal income tax taxation, it is regulated by Art. 225-228 of the Tax Code of the Russian Federation. The tax legislation additionally highlights the following features:

• Individual income tax calculations by various tax agents.
• Calculations of income tax by individual groups of individuals.
• Individual income tax calculations for specific types of income.

Paying personal income tax and reporting

We continue to characterize the main elements of personal income tax. The last two that are interconnected remain - payment and reporting.

Tax agents must send the amount of personal income tax no later than the day they receive cash from the bank to pay income or the day the income is sent to the taxpayer's bank accounts.

Separate groups of individuals pay income tax at the place of registration of the payer. Dothis is necessary no later than July 15 of the year, which immediately follows the reporting one. The legislation notes that advance payments by such groups of taxpayers will be paid on the basis of notifications from the Federal Tax Service:

• From January to June. Not later than July 15 of the current year. With respect to 1/2 of the total annual amount for advance payments.
• From July to September. Not later than October 15 of the current year. Regarding 1/4 of the total annual amount of advance payments.
• From October to December. Not later than January 15 of the year following the reporting year. Regarding 1/4 of last year's advance payments.

If the taxpayer receives income, upon payment of which the tax agent does not withhold the amount of tax, then he pays personal income tax in two payments, and in equal shares:

• First deduction. Not later than 30 calendar days from the date of receipt by the Federal Tax Service of a notice of the need to pay tax.
• Second deduction. Not later than 30 calendar days from the first moment of payment of personal income tax in the reporting year.

Not later than April 30 of the year following the reporting year, the following taxpayers submit a tax return:

• Separate categories of individual payers.
• Individuals in relation to specific income categories.

All this is normalized by Art. 228 of Russian tax legislation.

Invalid value of the personal income tax element

You can also find such a definition. Although it is consonant with the categories we have analyzed, it has nothing in common with them. Error "Invalidthe value of the element in 2-NDFL" can occur when generating tax electronic reporting in accounting programs. For example, in the application "Legal Taxpayer" it is easy to fix it by checking the details for extra spaces, re-filling the form lines.

In closing

We have analyzed the main elements of personal income tax that characterize the essence of this tax. Its payers, as can be seen from the abbreviation, are individuals, the object of taxation is their income. Each of the indicated elements of the tax is regulated by separate provisions of the Tax Code of the Russian Federation.