How to switch to simplified tax system
To get on the simplified tax system, you do not need permission from the tax authorities. Individual entrepreneurs and companies simply submit a notice of transition. The main thing is not to be late with submission.
Regular transition to simplified tax system
By default, the entire business is subject to the common tax system. New companies and individual entrepreneurs submit a notification to the simplified tax system immediately with documents for registration or within 30 days after. And those already employed can switch from the new calendar year by submitting a notice in the current year before December 31. You cannot switch to the simplified tax system within a year. This is the rule of Art. 346.13 Tax Code of the Russian Federation.
To transfer, a notification is submitted in Form 26.2-1.
Article: how to issue a notification on the simplified tax system
Transition of individual entrepreneurs to the simplified tax system from tax for the self-employed
There is an exception for individual entrepreneurs who previously applied the tax for self-employed people, but have lost their right to it. Such individual entrepreneurs can switch to the simplified tax system in the middle of the year by submitting a notification within 20 days after removal from the NAP in “My Tax”. There is no need to wait until the end of the year. This is a benefit from Art. 15 of the Law on Tax for Self-Employed Persons.
Former self-employed individual entrepreneurs submit a special notification using the KND form 1150094.
Article: when an individual entrepreneur loses the right to tax for the self-employed
Transition of an individual entrepreneur to the simplified tax system after loss of the right to a patent
Individual entrepreneurs who applied a patent but lost the right to it are subject to the simplified tax system. The same thing happens when the patent expires. But only on the condition that the individual entrepreneur has previously submitted an application for the simplified tax system. If the right is lost, the former patentee is subject to the simplified tax system retroactively - from the beginning of the patent. And at the end of the period - after the end date. There is no need to submit hotel notices.
Article: when an individual entrepreneur loses the right to a patent
Transition to simplified tax system from canceled UTII
Since 2022, the UTII regime has been abolished. For former imputed persons there was a grace period for switching to the simplified tax system - until March 31, 2022. The Federal Tax Service reported this. The usual notice had to be given. If the notification is submitted within this period, it is considered that they have switched to the simplified tax system.
If the entrepreneur did not send the notification within the established time frame, he does not have the right to apply the simplified tax system. This is the rule from paragraphs. 19 clause 3. art. 346.12 Tax Code of the Russian Federation.
Sometimes an entrepreneur does not have time or forgets to submit a notification. There may also be errors in the notification, for example, there is no signature or the object is not indicated - “income” or “income minus expenses”. The tax office is also not always clean: inspectors may lose the notice. In such cases, the tax office requires you to pay taxes according to the general system. Usually, an entrepreneur finds out about this when the tax office blocks the account due to failure to submit VAT and personal income tax returns, or even comes with an on-site inspection and charges additional taxes.
Application of the simplified tax system from next year
If you do not meet the 30-day deadline after registration, you will have to wait until the beginning of next year to switch to the special regime. Please note that the notification must be submitted before the end of the current year in order to switch to a simplified system next year.
Application for the transition of individual entrepreneurs to the simplified tax system from the beginning of the new year
An example of a notification about the transition of an individual entrepreneur to the simplified tax system from the beginning of the new year
- XLS, 384 KB
- PDF, 1.2 MB
How to confirm that the notification about the transition to the simplified tax system was
In response to filing a notification, the tax office does not say anything. It simply transfers to the simplified tax system. The notification of the transition remains with the tax office.
You can confirm the notification in the following ways.
- A copy of the notification with the inspector’s signature on acceptance - if it was made;
- Information from the Personal Account of the individual entrepreneur, where in the section “My taxation system” there is the simplified tax system;
- A receipt for receipt of documents for registration of LLC and individual entrepreneur, where the list contains a notification.
- A description of the mail attachment where the notification is written.
You can also make a free-form request to the tax office to confirm the simplified tax system. Inspectors must send an information letter in Form 26.2-7 within 30 days. But this option is not suitable if the tax office already has claims.
If there really was no notification or it was late, the right to the simplified tax system depends on whether the tax authorities recognized the tax transition or not.
Sending a notification
You can send a document to the tax office in different ways: during a personal visit, by mail, or online.
Important: notification of the transition to a simplified taxation system must be submitted to the tax office at the place of registration.
Having figured out which tax inspectorate to report the transfer to, the taxpayer chooses the method that suits him. If you send a document by mail, the letter must be registered with a list of attachments.
The fastest and most convenient way is to send a document over the Internet. Our service for working with electronic reporting, Astral Report 5.0, is suitable for this purpose.
When is it considered that the tax office has recognized the right to the simplified tax system?
The courts have an ironclad position: if the tax office does not immediately react to the unjustified application of the simplified tax system by an entrepreneur, then it is considered that the transition has taken place. This is roughly what the Supreme Court formulated in paragraph 1 of the Review of disputes on the simplified tax system and patents dated July 4, 2018.
It turns out that the tax office should react to the first advance payment under the simplified tax system and say that the entrepreneur is paying the wrong taxes. But often newcomers do not pay anything because they are on a tax holiday with a simplified tax rate of 0%. Then the tax office must react for the first time when filing an annual simplified tax return. If you didn’t react, it means that you recognized the entrepreneur’s right to the simplified tax system, and you can no longer demand taxes under the general system.
This is what the courts consider recognition of tax rights to the simplified tax system:
— the entrepreneur paid an advance payment, and the tax office did not ask for an explanation;
— the entrepreneur submitted his annual declaration to the simplified tax system, the tax office accepted it and did not ask for any explanation during the desk audit for three months;
— the tax office did not require declarations and taxes for VAT, personal income tax and other taxes in the first reporting period, and the entrepreneur did not submit or pay them;
— the tax office has made a demand for an advance or annual payment of the simplified tax system;
— the tax office issued a cash register to the entrepreneur indicating the simplified taxation system.
If at least one of these circumstances occurs, the court will recognize the transition to the simplified tax system as valid.
The IP opened on July 24, 2015. On March 16, 2016, I submitted my simplified taxation system declaration for 2015. In October 2016, the tax office conducted an on-site audit and found out that the individual entrepreneur submitted a notification for the transition late. Immediately, the tax office assessed additional personal income tax and VAT for 2015 in the amount of 8,410,980 rubles, penalties of 1,247,191 rubles and a fine of 841,098 rubles. The individual entrepreneur appealed this decision to the regional Federal Tax Service, and after the refusal, to the court.
The court confirmed that the tax office recognized the right to the simplified tax system and now cannot transfer individual entrepreneurs to the general system. The individual entrepreneur made advance payments in 2015 and 2016, but the tax office did not count them as an overpayment, and the tax office accepted the annual tax return without requiring explanations within a three-month period for the camera - case No. A45-29990/2017.
What document confirms the right to special treatment?
Notification
If a company or individual entrepreneur switches to the simplified tax system, then they should send a notification to their Federal Tax Service about the transition to the simplified system. This is form No. 26.2-1 (approved by order of the Federal Tax Service dated November 2, 2012 No. MMV-7-3/829).
According to the provisions of paragraph 1 of Art. 346.13 of the Tax Code of the Russian Federation, this should be done before the beginning of January, in order from that moment to legally have the status of a tax payer under the simplified tax system.
You can download this form from our website here.
However, you should know that tax authorities are not required to provide any additional documentary evidence of the transition to a simplified tax system. The situation seems hopeless. After all, the tax inspectorate has the right not to send any permitting or notification letters to the counterparty. And where then can I get an answer to the letter about the application of the simplified taxation system ?
Information letter
By order of the Russian Tax Service dated November 2, 2012 No. ММВ-7-3/829, another form of interest to us was approved - No. 26.2-7. This is an information letter. And not just a letter, but a very necessary document through which tax authorities confirm:
- receiving a notification from a company or individual entrepreneur about a change in their tax status and switching to a simplified tax system (in the letter form it is called an application);
- receiving reports under the simplified taxation system. Although information about submitted declarations may not be visible if the day for their submission has not yet arrived, and the information letter is already ready.
The form of this letter looks like this:
To receive such a letter, the simplifier should make a request for confirmation of the fact of application of the simplified tax system. And it is this document (its certified version) that will become the evidence that will confirm the status of a simplifier.
Also see “Moving from “imputation” to “simplified”.
Declaration
In the end, the status of your counterparty as a simplified person can be confirmed by the title page of a fresh declaration under the simplified tax system. In addition to the information letter from the Federal Tax Service, attention is drawn to this by the letter of the Ministry of Finance dated May 16, 2011 No. 03-11-06/2/75.
When it is considered that there was no transition to the simplified tax system
If inspectors immediately responded to incorrect payment of taxes and incorrect reports, it is considered that the entrepreneur did not switch to the simplified tax system.
This is when the courts side with the tax authorities:
— after paying the first advance payment, the tax office demanded an explanation due to the lack of an object under the simplified tax system;
- within three months after submitting the simplified tax system declaration, the tax office asked for an explanation in connection with the lack of an object under the simplified tax system - if advance payments were not made due to vacations or lack of income;
— the tax office did not accept the simplified tax system declaration;
— the tax office promptly sent notifications about the payment of personal income tax and a demand for VAT;
— the tax office blocked the entrepreneur’s account for failure to submit returns under the general system within 10 days after the deadline.
The individual entrepreneur registered on February 1, 2022, but forgot to submit a notification about the transition to the simplified tax system. On April 24, 2022, the individual entrepreneur made an advance payment for the first quarter of 2022. On April 25, 2022, I submitted my declaration for 2022. But already on May 30, the inspectors asked for clarification and reported that the individual entrepreneur was not on the simplified tax system. And on May 24 and 28, the individual entrepreneur’s account was frozen for failure to file personal income tax and VAT returns. The individual entrepreneur challenged the blocking, citing the advance payment and the simplified tax system declaration. But the court supported the tax office, because it immediately noticed the lack of the right to the simplified tax system - case No. A43-2021/2020.
It is important that the tax office sends the request for clarification to the registration address of the individual entrepreneur or the legal address of the company from the Unified State Register of Individual Entrepreneurs and the Unified State Register of Legal Entities. Entrepreneurs are required to monitor mail at these addresses. The excuse that the request was not received will not work - Art. 51 Civil Code of the Russian Federation.
Information letter on the use of the simplified tax system
When switching to the “simplified” system, an enterprise or individual entrepreneur sends a notification to the Federal Tax Service at the place of registration on form No. 26.2-1, approved by Order of the Federal Tax Service dated November 2, 2012 No. MMV-7-3 / [email protected] The taxpayer usually submits 2 copies of this to the inspectorate documents: one of them with an inspector’s mark remains with the payer and can serve, for example, as proof of the right to work without VAT.
But what to do if such a notification is submitted to the tax office in a single copy, and the simplifier does not have any “paper” confirmation of the right to work on the simplified tax system? In such a situation, the subject can contact the inspectorate and receive an information letter about the transition to the simplified tax system in form No. 26.2-7.
Such a letter is not a mandatory document. But practice shows that when concluding contracts, counterparties may be interested in the basis of calculations without including VAT. And if in such a case the payer is unable to provide a notice of application of the simplified tax system, the only way out will be to request information from the Federal Tax Service.
By the way, until April 2010, when switching to the simplified system, the payer was given a notification about the possibility of using the simplified tax system, but the order of the Ministry of Taxes and Taxes dated September 19, 2002 No. VG-3-22/495, which approved this notification, was canceled. Now, by default, inspectors do not send any confirmations to simplified taxation system payers.
What to do if you find yourself on a shared system
It will only be possible to switch to the simplified tax system starting next year. And for the remainder of the current one you will have to pay taxes on the general system, plus fines and penalties for late payments for the previous period. And you can’t do it without an accountant. If the deadline has not yet passed, it is worth paying and submitting reports right now. But here it will be assumed that the entrepreneur himself has already recognized the general system. This was the case in case No. A40-3779/2019.
However, for individual entrepreneurs there are exit options:
- Close and reopen the IP. Then you can switch to the simplified tax system already this year as a newly created business. You will have to pay insurance premiums and taxes before closing. But it’s still cheaper than surviving a year on a shared system.
- Consider a patent if you are conducting a suitable type of activity. During the time before switching to a patent, you must pay general taxes, after which there will be an exemption. A notification to the simplified tax system for the transition from next year still needs to be submitted so that this system will be a backup.
- Consider a tax for the self-employed if the entrepreneur operates without employees, does not resell goods, and does not exceed other restrictions. The simplified tax system will not be needed as it cannot be combined with the NAP.
