Taxation system for individual entrepreneurs: how to choose the most effective

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

To select a specific tax regime, you need to familiarize yourself with each in detail and understand which taxation system is most beneficial for individual entrepreneurs.

Simplified system

This system is known as the simplified tax system, it represents a special taxation regime, which is the most beneficial for doing business. When in this mode, business entities do not need to provide the tax authorities with a balance sheet and a statement of losses and profits. At the same time, such a taxation system for individual entrepreneurs implies the absence of income tax, property tax and VAT.

Modern legislation involves the use of two types of "simplification":

- payment of 5-15% of the amount of income received, reduced by the amount of expenses (the percentage varies depending on the region);

- payment of 6% of income.

Another kind of simplified system is the agricultural tax. This taxation system for individual entrepreneurs is similar to the simplified tax system, but only for agricultural enterprises and using the relevantbenefits. In this case, the tax base is income subject to reduction by the amount of expenses. The rate in this mode is 6%. And the transfer of insurance premiums for employees is less.

The choice of taxation system for individual entrepreneurs largely depends on the current tax legislation. So, there is another simplified regime - patenting, used only by IP. It is applied only on the basis of a decision of local legislation for specific types of activities. A patent is valid only on the territory of the subjects where it was acquired.

General system

This system can be classified as one of the heaviest tax regimes. It is applied by those individual entrepreneurs who, during registration, did not apply for the transition to "simplified". The general taxation system for individual entrepreneurs of certain types of activities must be used without fail.

The specified regime provides for registration as a payer of property tax, VAT and personal income tax. All necessary reporting must also be submitted to the controlling tax authorities.

What is the taxation system for individual entrepreneurs

The general system can be justified only for those individual entrepreneurs who import goods to Russia. The same can be said if a business entity has a sufficient number of counterparties - VAT payers.

Applying the general taxation system, an entrepreneur pays personal income tax on total income (from the results of all his activities), as well as on those income from which this tax was not paid. Perthe tax base is income reduced by various professional, property and social deductions.

The so-called UTII can be used depending on the region. If it is allowed in a particular locality, you can work, otherwise it is forbidden.

Entrepreneurs need to remember that it is impossible to combine the general and simplified taxation systems. It is possible to combine only the simplified tax system and UTII, as well as UTII and the general system.