Article 209 of the Tax Code of the Russian Federation. Object of taxation (current version)

Subjects of personal income tax taxation

All individuals who have income specified in Article 23 of the Tax Code of the Russian Federation must pay personal income tax on Russian territory. First of all, these are citizens who have tax resident status, i.e. continuously staying in Russia for at least 183 days. Individuals staying in the country for less than the specified period are not tax residents, but this fact does not exempt them from paying personal income tax.

It is important to know: if a personal income tax subject left Russia due to training or the need for treatment for a period of up to six months, he retains the status of a tax resident.

Civilians who receive all kinds of income (in national or foreign currency) from business entities operating on Russian territory are subject to personal income tax. It does not matter in what terms the payment is made - in cash, in kind or in the form of material benefits. Tax withholding by the employer is carried out for both residents and non-residents of the Russian Federation.

If an individual derives income from a source located in another state, then in order to withhold personal income tax, the citizen must have resident status.

What is the object of personal income tax taxation?

A personal income tax object arises under the conditions specified in Art. 209 of the Tax Code of the Russian Federation.

Read more about this in the material “What is the object of personal income tax taxation (nuances)?” .

The main operations that form the object are:

1. Receiving dividends and interest. In this case, you should pay attention to how income from participation is taxed when one of the founders leaves the company.

This situation is discussed in the materials “The share of a participant who left the LLC is distributed in favor of the remaining ones: what about personal income tax?” and “Distributed interest in LLC - taxable income of remaining participants .

1. Rental relations.

Read about this in the article “Renting from a “physicist” - personal income tax must be calculated on inseparable improvements.”

1. Payment of certain types of pensions.

You will learn about which pensions are subject to taxation from the publication “Is a pension subject to income tax (nuances)?” .

1. Compensations made under employment contracts.

The materials on which payments made by the employer to employees should be taxed are discussed in the materials “Renting housing for employees is subject to personal income tax and contributions” and “Compensation for sports: personal income tax, contributions, profit.”

An important condition when determining the object of taxation is the presence or absence of justification for its occurrence. Having correctly executed documents often allows you to avoid tax calculation.

This situation is discussed in more detail in the article “Does economic benefit arise on business trips?”

At the same time, sometimes the possibility of non-withholding of personal income tax can be proven in court.

How this happens in practice is discussed in the material “The accountant confirmed expenses with documents from a non-existent company. Do I need to withhold personal income tax? .

Current personal income tax rates

The dominant (standard) rate at which personal income tax is calculated for tax residents is 13% of the income received. However, tax law limits the application of other tax rates depending on the type of income received and the status of an individual.

Read more about personal income tax rates in a separate article.

When calculating income tax, the amount should be calculated for each type of income received and at the rate determined by law.

Comfortable! You can make a quick calculation using a special personal income tax calculator.

Features of determining residence

Citizenship of the Russian Federation is not a determining condition for establishing the status of a Russian tax resident. This means that a Russian citizen may not be a tax resident of the Russian Federation, and vice versa, not only a foreigner, but even a person without citizenship can be recognized as a tax resident of the Russian Federation. Supervisory authorities have spoken out on this issue more than once, for example, in letters from the Ministry of Finance of Russia dated November 15, 2012 No. 03-04-05/6-1305, Federal Tax Service of Russia dated September 23, 2008 No. 3-5-03/ [email protected] , Federal Tax Service of Russia in Moscow dated February 29, 2008 No. 28-10/019821.

From all that has been said, a particular conclusion follows that in determining the status, the place of birth of an individual and his address of residence are of no importance.

However, there are also persons who, according to paragraph 3 of Art. 207 of the Tax Code of the Russian Federation does not apply to the time limit of 183 days. That is, regardless of the duration of stay in the Russian Federation, the following should be considered tax residents of the country:

• Russian military personnel serving abroad;
• state and municipal employees, as well as employees on business trips abroad.

But in relation to family members of government employees, tax status should be determined in a general manner. The same rule applies to persons working in diplomatic and trade missions and consular offices. The Ministry of Finance of Russia, in a letter dated August 26, 2009 No. 03-04-05-01, separately addressed this issue.

In addition, the Tax Code in Art. 7 determined: if the Russian Federation has international agreements that establish norms other than those in the Tax Code of the Russian Federation, then the provisions from international treaties must apply. This also applies to the procedure for establishing residency. Letter of the Federal Tax Service of Russia dated October 1, 2012 No. OA-3-13 / [email protected] confirms this. In particular, it contains references to the following acts:

• Agreement dated December 5, 1998, concluded by the Governments of the Russian Federation and the Republic of Cyprus on the avoidance of double taxation.
• Agreement dated 02/08/1995, concluded by the Governments of the Russian Federation and Ukraine on the avoidance of double taxation and the prevention of tax evasion.

About the rules for determining residence, read the material: “How to correctly determine the period required to give a citizen the status of a tax resident”

Non-taxable income

Tax law (Article 217 of the Tax Code) provides for several categories of income of citizens, which under no circumstances are subject to personal income tax. Tax is not charged on the following payments:

• all types of social benefits (for minor children, maternity benefits, subsidies for job loss);
• compensation accruals not included in the wage fund or established by local legislation;
• pensions (labor, social, survivor) and federal regular supplements;
• alimony;
• awards and grants received as measures of support in the fields of science, art, and education;
• scholarships.

When selling products grown/fed on private farms, the income received will not be subject to taxation.

Attention: received inheritance and income (monetary and material) transferred to an individual under a gift agreement are not included in the personal income tax tax base.

State benefits for personal income tax

A rather voluminous article in the Tax Code of the Russian Federation is devoted to a significant number of deductions that the state provides to reduce personal income tax due. In particular, individuals can use various types of deductions:

• property;
• standard;
• professional;
• social.

Property deductions

A reduction in personal income tax is possible for citizens who have made transactions with their own real estate or other assets. When selling property, the former owner has the right to underestimate the tax base by 1 million rubles. In this case, it is necessary that the period of possession of the property be 3 years or less.

Important: if the property was purchased in 2016, then in order to receive a property deduction when selling it, the ownership period is increased to five years.

For citizens purchasing housing or carrying out individual construction, a deduction is provided in the amount of actual expenses for the purchase or construction of an apartment (house, share). The maximum amount for which personal income tax can be “refunded” is limited to 2 million rubles.

You can receive property deductions after the tax period (year) has ended. Working individuals can submit an application to their employer and attach supporting documents, and unemployed citizens must contact the territorial tax authority. In addition to contracts, receipts and payment documents, you will need to attach a completed declaration in Form 3-NDFL to your application.

EXAMPLE 1 In 2014, an individual purchased an apartment worth 1,895,000 rubles. Since the amount paid for real estate is less than the maximum tax deduction, a citizen has the right to declare his right to use the benefit in full. The deduction amount will be 1,895,000 x 13% = 246,350 rubles.

Standard deductions

This type of government benefit applies to

• citizens engaged in military service,
• persons who have the highest state awards or other services to the Motherland,
• taxpayers raising children.

The standard deduction is applied on a regular basis and is reflected monthly in the employer’s tax registers and the 2-NDFL certificate.

The amounts that the tax agent accepts as standard tax deductions vary for each category of “beneficiaries” - from 500 rubles per month for people who became bone marrow donors to 3,000 rubles for parents with many children or Chernobyl victims.

The standard child deduction applies to both parents, even if they are legally divorced.

A father/mother deprived of the rights to raise a child by court can use a tax deduction if they pay the established alimony.

EXAMPLE 2 An employee is raising two school-age children. Her annual income is 332,118 rubles. For each of two children, a deduction of 1,400 rubles per month is provided. Thus, without taking into account the deduction, the amount of personal income tax would be 332,118 x 13% = 43,175 rubles. Taking into account the standard deduction, personal income tax is calculated in a smaller amount: 332,118 - (2800 x 12 months) = (332,118 - 33600) x 13% = 38,807 rubles.

Professional deductions

Deductions related to the professional activities of the taxpayer are accepted in the amount spent on services/work. Professional deductions are used when assessing personal income tax on the income of the following categories of citizens:

• officially received the status of a notary, lawyer, individual entrepreneur;
• performing work/services under GPC agreements;
• who are the authors of works of art.

The tax return must be accompanied by supporting documents confirming the actual expenses incurred. If a citizen cannot provide expense receipts, then the deduction may be 20%-40% of the proceeds (income) received.

The standard for expenses accepted for professional deduction depends on the category of taxpayer and is specified in Art. 221 Tax Code of the Russian Federation.

EXAMPLE 3 An individual entrepreneur made expenses for the year in the amount of 99,542 rubles with an income received of 327,110 rubles. All costs are documented and therefore accepted in full. The amount of personal income tax intended for payment will be: (327,110 – 99,542) x 13% = 29,584 rubles.

EXAMPLE 4 The annual income of an individual entrepreneur was 420,540 rubles. Justified expenses in the amount of 48,230 rubles were documented. The amount of personal income tax when applying a professional deduction for the amount of actual expenses will be: (420,540 – 48,230) x 13% = 48,400 rubles. If an individual entrepreneur chooses the option of using a professional deduction in a standardized amount, then the benefit will be 20% of income, i.e. RUR 84,108 Personal income tax in this case will be: 420,540 – 84,108 = 43,736 rubles.

Important: if an individual entrepreneur cannot fully confirm a documentary tax deduction, then it may be more profitable to use a cost standard for calculating income tax. The combined use of both standards and expenditure documents is not permitted.

Social deductions

The tax base for personal income tax can be reduced by the amount of social tax deductions, which include:

• charitable contributions to social institutions (orphanages, boarding schools for the elderly);
• contributions made to non-state pension funds as additional insurance;
• sums of money spent on education (of oneself or minor children), the purchase of medications according to a specialized list, or treatment of the taxpayer himself or his family members.

EXAMPLE 5 The annual income of an employee with a minor child was 369,520 rubles. The child's education at college cost the parent 42,000 rubles. The amount of personal income tax is calculated in this case taking into account the deduction: (369,520 – 42,000) x 13% = 42,578 rubles.

Remember: contributions to charity and treatment costs are deductible in full (documented). The social deduction for education is 50 thousand rubles per year. In this case, the educational institution must be accredited and licensed.

How to calculate a 183-day calendar period?

Calculating the 183-day period is not difficult: you need to sum up all the calendar days during which the personal income tax payer was in the Russian Federation, and those days that he needed for short-term trips for training or treatment. The count is carried out over a 12-month continuous period. This procedure is provided for in paragraph 2 of Art. 207 of the Tax Code of the Russian Federation and explained in the letter of the Ministry of Finance of Russia dated May 22, 2012 No. 03-04-05/6-654.

Article 207 of the Tax Code of the Russian Federation, which regulates the calculation procedure, does not contain instructions that these days must be consecutive. That is, the period may be interrupted by business trips, vacations, etc. The regulatory authorities have paid attention to this more than once, for example, in letters from the Ministry of Finance of Russia dated 04/06/2011 No. 03-04-05/6-228, Federal Tax Service of Russia dated 08/30/2012 No. OA-3-13/ [email protected] , Federal Tax Service of Russia in Moscow dated July 24, 2009 No. 20-15/3/ [email protected]

Example

An employee whose activities involve business trips was in the Russian Federation for more than 183 calendar days from April 16, 2022 to April 16, 2022. This period was interrupted several times, resulting in the following graph.

He stayed outside the territory of the Russian Federation for the following periods:

• from May 12 to May 23, 2022;
• from July 5 to July 13, 2022;
• from September 1 to September 20, 2022;
• from January 19 to January 30, 2022;
• from March 2 to March 27, 2022.

Total: 79 days.

On the territory of the Russian Federation it was located:

• from April 16 to May 11, 2022;
• from May 24 to July 4, 2022;
• from July 14 to August 31, 2022;
• from September 21, 2022 to January 18, 2022;
• from January 31 to March 1, 2022;
• from March 28 to April 16, 2022.

Total: 285 days.

Undoubtedly, the time spent on the territory of the Russian Federation is more than 183 days. Since he acts as a tax agent here, this employee should be recognized as a tax resident on April 17, 2019. It was on this day that he was paid income in the form of a bonus.

You can read about the importance of observing deadlines for staying on the territory of the Russian Federation in the material: “A long foreign business trip may be unprofitable for an employee from the point of view of personal income tax”

When should personal income tax be withheld and paid?

The law strictly specifies specific deadlines when the tax agent is obliged to withhold and pay income tax from the budget. Personal income tax must be paid to the budget one day after the date of payment of income.

The only exceptions are accruals for loss of ability to work (“sick leave”). In this case, the tax agent is required to pay the withheld tax by the end of the calendar month.

Keep in mind: when paying income for the first half of the month (advance), you should not transfer income tax to the treasury.

If the income (or part of the income) of a citizen consists of natural objects - food, industrial goods, meals at the workplace - then the withholding of income tax should be timed to coincide with the first cash payment. A similar rule applies in cases where an individual receives a material benefit (for example, in situations where an employee is given an interest-free loan at the expense of the employer).

Remember: individuals engaged in private practice and individual entrepreneurs must pay advances on personal income tax throughout the calendar year. Transfers are made on the basis of notifications prepared by tax officials.

Who are residents and non-residents?

Paragraph 2 of Article 207 of the Tax Code contains a definition clarifying who should be considered a tax resident. The law includes individuals in this category who have been in the Russian Federation for at least 183 days. Moreover, this period must be within 12 consecutive months.

Using this definition, it is easy to find out who is a non-resident of the Russian Federation. This category accordingly includes persons who are on the territory of the Russian Federation for less than 183 days, falling within 12 consecutive months. The category of non-residents includes labor migrants, foreign tourists, students, etc.

There are also special cases in this matter. For example, the Russian Ministry of Finance in letter dated December 24, 2012 No. 03-04-06/6-364 explained that non-residents should also include individuals located within the Russian continental shelf. Specialists from the Ministry of Finance, having in mind tax legal relations, moved this territory outside the Russian Federation.

Personal income tax and individual entrepreneurs

The obligation of private business entities (IP) to pay income tax depends on the taxation scheme applied.

When using simplified systems for individual entrepreneurs - simplified tax system, UTII, patent - the entrepreneur is exempt from federal taxes, including personal income tax. If an individual entrepreneur does not apply the special regime, then at the end of the year he is obliged to report on the income received and calculate the tax. When calculating personal income tax, an individual entrepreneur can reduce the tax base by the amount of social deductions.

The personal income tax return must be submitted to the territorial tax office before April 30 (inclusive), and tax payment must be made before July 15 of the year following the reporting year.

These rules apply in situations where an individual entrepreneur works independently, without the involvement of employees. If the entrepreneur’s staff includes employees who receive salaries, then the individual entrepreneur is obliged, as a tax agent, to calculate, withhold and transfer personal income tax to the budget account.

Remember: an individual entrepreneur who is exempt from personal income tax due to the use of a special regime is required to pay tax at the end of the year on income not related to the main activity (for example, when selling assets - real estate or transport).

The individual entrepreneur, along with the obligation to withhold and pay personal income tax for employees, must maintain tax registers for income tax. The register does not have a unified form and is developed independently. It is a set of personalized information for each employee, including accrued income, applicable deductions, amounts of tax withheld and paid. Violation of the obligation to maintain a tax register entails the imposition of an administrative fine.

If, for objective reasons, the individual entrepreneur did not withhold personal income tax from the employee, then by March 1 he should report to the tax authority the data on the taxpayer and the amount of income tax debt.

Question #3: How do I determine the date before a 12 month period?

Determining the date that is taken as the final reference point (it is preceded by a 12-month period), depending on the procedure for paying personal income tax, can go in two ways:

• If personal income tax is withheld and paid into the budget by the tax agent until the tax period has expired, then this date will coincide with the date the income was received. A similar conclusion was made in letters of the Ministry of Finance of Russia dated July 14, 2011 No. 03-04-06/6-170, Federal Tax Service of Russia dated August 30, 2012 No. OA-3-13/ [email protected] , Federal Tax Service of Russia for Moscow dated July 24, 2009 No. 20-15/3/ [email protected] The tax status, as follows from the letter of the Ministry of Finance of Russia dated March 19, 2013 No. 03-04-06/8402, should be determined at the end of the year.
• If an individual pays personal income tax independently at the end of the tax period, then residence is determined at the end of the tax period. In such circumstances, the period of stay of an individual in the Russian Federation is not taken into account both before the beginning of the tax period and after its end. This decision is supported by letters from the Ministry of Finance of Russia dated April 25, 2011 No. 03-04-05/6-293 and the Federal Tax Service of Russia dated August 30, 2012 No. OA-3-13 / [email protected]

Example

Employees often go on business trips abroad of varying durations. Moreover, some of them stay outside the Russian Federation for more than 183 days within a 12-month period.

Based on the results of the first quarter, on April 17, 2022, the company pays a bonus to all personnel. Since the company in the above circumstances acts as a tax agent, its accounting department should divide all employees into residents, whose income is taxed in accordance with paragraph 1 of Art. 224 of the Tax Code of the Russian Federation at a tax rate of 13%, and non-residents, whose income is taxed in accordance with clause 3 of Art. 224 of the Tax Code of the Russian Federation at a rate of 30%.

Status is determined on the date of payment of the bonus, which is considered income. That is, the company must count the number of calendar days that each employee spent in the Russian Federation during a 12-month continuous period. The period begins on April 16, 2022, and ends on April 16, 2019.

Personal income tax reporting

Fiscal authorities require entities performing the duties of a tax agent to regularly prepare income tax reports.

Help 2-NDFL

The main type of personal income tax reporting is a certificate in form 2-NDFL. This document is generated on the basis of registers filled out by the tax agent for each employee. The deadline for submitting form 2-NDFL is April 1 of the following reporting year.

In addition to the set of certificates, the tax agent is required to submit to the Federal Tax Service a register of submitted information.

For organizations/individual entrepreneurs with more than 25 employees, the law stipulates the obligation to provide all types of personal income tax reporting in electronic format.

Declaration 3-NDFL

The report on Form 3-NDFL is filled out and submitted to the tax authority by individuals. It is mandatory to submit a declaration for the following categories of citizens:

• Individual entrepreneurs and private practitioners who have not received entrepreneurial status;
• Russian tax residents – when receiving funds outside the state;
• individuals who have generated additional income by selling property, receiving prizes and winnings, and providing asset rental services.

In addition to the listed cases, a declaration in form 3-NDFL is part of the package of documents for filing an application for a property or social tax deduction.

Report 6-NDFL

This type of reporting has been in effect since 2016 and is a summary of accrued income, taxes withheld and transferred. The uniqueness of the 6-NDFL report is that it must indicate specific dates for the payment of income and payment of personal income tax to the budget.

A report in Form 6-NDFL is required for all business entities that use hired labor. The frequency of generating and submitting the report is once a quarter.

Penalties for personal income tax

The tax legislation specifies the types of violations and penalties for the preparation and submission of income tax reports:

• late submission of the report in Form 6-NDFL – 1000 rubles for each overdue month;
• erroneous or unreliable information in 2-NDFL certificates – 500 rubles for each document;
• failure to provide a 2-NDFL certificate – 200 rubles (each document).

Violation of the deadline for submitting personal income tax reports for a long period (more than 10 days) entails the possibility of blocking bank accounts.

Who pays personal income tax?

Personal income tax, according to the name of this tax, must be paid by individuals. Tax Code in para. 3 p. 2 art. 11 includes in this category:

• citizens of the Russian Federation;
• citizens of other countries;
• stateless persons.

Some clarification is required for minor children. They are also recognized as personal income tax taxpayers with the only condition: legal representatives must act on their behalf in legal relations with the tax service. As a rule, these are their parents or guardians. This thesis is covered in detail in letters from the Ministry of Finance of Russia dated 05/03/2012 No. 03-04-05/3-586 and the Federal Tax Service of Russia dated 04/23/2009 No. 3-5-04/ [email protected]

This list also includes individual entrepreneurs who, according to paragraph. 4 p. 2 tbsp. 11 of the Tax Code of the Russian Federation also apply to individuals. Since the status of individual entrepreneurs is available only to citizens of the Russian Federation, entrepreneurs, as a result, are within the first point.

It should be noted that not every individual can be recognized as a personal income tax payer, but only one who:

• is a tax resident of the Russian Federation;
• is not a tax resident of the Russian Federation, but receives income in our country.

This definition of payers of this tax is contained in paragraph 1 of Art. 207 of the Tax Code of the Russian Federation.