Taxation of an entrepreneur: what are the options

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

Any state collects taxes from all its citizens. It is important to note that entrepreneurs, citizens and legal entities replenish the budget in different ways. Now I would like to talk specifically about the taxes that people who have the status of an individual entrepreneur are required to pay.

Taxation of entrepreneurs

First, let's talk about what a tax really is. In principle, this is a kind of mandatory contributions made to the budgets of various levels, in the order specified in the country's legislation.

Taxation of an entrepreneur has a fiscal function. That is, he must transfer part of the income to the state treasury. Other functions are also known (regulating and so on).

The taxation of an entrepreneur varies depending on economic processes. What are the goals of the state itself? It wants to make a profit, but at the same time it is interested in actively developing entrepreneurship. It's hard to find the exact balance. It is for this reason that taxation of entrepreneurs implies the possibility of using one of several existing systems, each of which has both advantages and disadvantages.shortcomings.

Individual taxation system

Let's start with the general. With it, the IP pays VAT, the amount of which can reach 18 percent. Property tax - 2.2 percent and personal income tax, which is 13 percent. In the event that an entrepreneur uses hired labor, he will also have to pay insurance premiums for his employees.

Everything is quite complicated, as you have to devote a lot of time to bookkeeping.

Let's consider what a simplified taxation system is. In this case, the IN does not pay any property tax, personal income tax, or VAT. What does he pay? Of course, a single tax. Income in this case is taxed at a rate of 6 percent. You can instead pay a percentage of income, which is previously reduced by the amount of expenses. You will have to pay 15 percent.

All payroll taxes are also paid here. What can be said about reporting? The entrepreneur will submit a report once a year. If there are employees, then you will have to report on them quarterly. This system of taxation of entrepreneurs is simple. Chosen by many.

Let's talk about UTII. This is a tax on imputed income. It has to be paid equally to those who earned a lot, and those who were left with nothing. This system of taxation is by no means beneficial for all individual entrepreneurs.

IP patent. Now the state is trying to introduce a system of IP patenting. Its essence isin the fact that at the beginning of the calendar year you will have to pay a certain amount, and then calmly engage in business. Such taxation of an entrepreneur can be disadvantageous, as people pay without earning anything yet. By the way, you will have to pay differently for different types of activities. The district coefficient is also important here.