How to correctly switch from the simplified tax system to the patent tax system

To simplify accounting and reduce the tax burden, entrepreneurs often choose special taxation regimes (USN, Unified Agricultural Tax, UTII, PSN).

If an individual entrepreneur (IP) is engaged in several types of activities, he can combine, for example, the simplified tax system with the patent taxation system (PTS) or even switch from one taxation system to another.

And before you figure out how to correctly switch from the simplified tax system to the PSN, you need to understand what the PSN is and how it differs from the simplified tax system.

USN or PSN?

Special tax regimes help entrepreneurs reduce tax documentation and payments. Each mode has its own advantages for certain types of activities. If a businessman has several of them in his arsenal, it is worth thinking hard about the advisability of one or another special regime and, possibly, about replacing or combining them.

Common features of PSN and simplified tax system:

• the same tax rate – 6% of income;
• fixed insurance premiums “for yourself” (depending on the minimum wage);
• annual revenue is limited to 60 million rubles;
• accounting is not necessary;
• You can combine the regimes both with each other and with other tax systems.

What are the differences between the patent system and the “simplified” system?

1. There is no need to generate reports and submit declarations, just fill out the Income Book.
2. It is not necessary to install cash registers, but to issue strict reporting forms to all clients instead of checks.
3. An entrepreneur is not required to pay a number of taxes:
   VAT;
4. personal income tax;
5. property tax for individuals if they are involved in business.
6. The validity of a patent lasts from 1 to 12 months.
7. Each subject of the Russian Federation is required to obtain its own patent.
8. You can hire workers, but no more than 15 people.
9. The single tax cannot be reduced, unlike the simplified tax system, where such a possibility is real for a single individual entrepreneur due to fixed payments.

RESULT: when is it profitable to switch to the patent system? The transition from the simplified tax system to a patent is advisable for an entrepreneur if in a given region he expects income from his activities in an amount significantly greater than the cost of the patent itself.

How long does a patent last and how to renew it?

The Tax Code of the Russian Federation has approved the deadline for filing a patent application for 2022 - at least 10 days before the start of application of the PS (clause 2 of Article 346.45, clause 6 of Article 6.1 of the Tax Code of the Russian Federation). In addition, the Tax Code also regulates the validity period of this taxation system: from 1 to 12 months.

PSN is issued from any date of the month specified in the application. The minimum validity period is 1 month, the maximum is 1 year. If the PS was issued for less than a year, the tax period is the time of its validity. If the individual entrepreneur plans to continue working on the PSN, it will be extended for a new term.

Who can plan the transition?

Not all businessmen have the right to change the current tax payment system to a patent one. For the replacement to be legally valid, 2 conditions set out by the Ministry of Finance of the Russian Federation in letter No. 03-11-12/50675 dated November 25, 2013 must be met:

• the patent tax regime is permitted for use in the relevant constituent entity of the Russian Federation;
• the type of business activity is contained in the transfer permitted for PSN, clause 2 of Art. 346.43 of the Tax Code of the Russian Federation, and cooperation is allowed with both individuals and organizations.

ATTENTION! This list can be expanded: you can add household services from OKUN to it (clause 8 of Article 346.43 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of the Russian Federation No. 03-11-11/45760 dated September 12, 2014), if they are provided only to individuals.

Who can't switch to PSN

If the type of activity of an individual entrepreneur, although included in the list of those permitted for a patent, is carried out under a simple partnership agreement (joint activity) or within the framework of trust management of property, PSN is not available for such persons.

We combine simplified taxation system and PSN

When combining PSN and simplified tax system, at the end of the tax period, the entrepreneur is obliged to submit to the Federal Tax Service a declaration under the simplified tax system, where income is presented without taking into account income from activities in respect of which the PSN is applied.

What to do with the volume of revenue when combining these special modes? In both tax systems there is a limit of 60 million rubles. By applying simultaneously the PSN and the simplified tax system, revenue is summed up under both modes (subclause 3, clause 6, article 346.45 of the Tax Code of the Russian Federation).

Otherwise, the established restriction may be violated and the right to use the PSN may be lost (subclause 1, clause 6, article 346.45 of the Tax Code of the Russian Federation). It is also worth paying attention to the fact that this right may be lost if the tax payment is late.

If the individual entrepreneur has ceased activities in respect of which the PSN was applied, he is obliged to notify the Federal Tax Service within 10 calendar days from the date of the occurrence of the circumstance that is the basis for termination of activities under the above special regime (clause 8 of Article 346.45 of the Tax Code of the Russian Federation). An individual entrepreneur has the right to switch to PSN again no earlier than from the next calendar year.

An individual entrepreneur combining regimes has the right to switch to the simplified tax system for the type of activity in respect of which the patent was applied, from the day of deregistration as a taxpayer of the PSN (letter of the Ministry of Finance of the Russian Federation dated March 18, 2013 No. 03-11-11/18691).

Fully or partially?

If an entrepreneur has several relevant types of activity in his arsenal, the law allows him to combine the simplified tax system and the PSN in the way that seems more profitable to him. Or you can completely change the “simplified” form to a patent if the activities fall within those permitted under the PSN.

When combining tax systems, it is important to take into account the following nuances:

• profitability under both tax systems together should not exceed the limit of 60 million rubles;
• income from activities on the simplified tax system must be substantiated by a declaration that does not include income from the special tax system; this document is submitted in its own way at the end of the reporting year;
• if there were no violations of the conditions, the right to the simplified tax system, even if the regimes are combined, will remain with the individual entrepreneur for the next tax periods; it does not need to be specifically confirmed.

Additional conditions for the transition to the simplified tax system for an operating business

When switching to the simplified tax system for an already operating business, it is not enough to wait until the beginning of the next year to submit a notification. It is important to ensure that the organization complies with the established limits:

• income for nine months of the year in which the application for the simplified tax system is submitted does not exceed the values ​​​​specified in Article 346.12 of the Tax Code of the Russian Federation;
• the residual value of fixed assets as of October 1 of the year of filing the notification does not exceed 150 million rubles.

The starting value of the income limit for nine months is 112.5 million rubles, but an annual deflator coefficient is applied to this amount. In 2022, its value is 1.032 (Order of the Ministry of Economic Development dated October 30, 2020 N 720). Taking this into account, the transition to the simplified tax system from 2022 is possible if the LLC’s income for nine months did not exceed 116.1 million rubles.

Requirements regarding income limits and the value of fixed assets do not apply to individual entrepreneurs. However, both organizations and individual entrepreneurs planning to switch to the simplified tax system must comply with another limit - no more than 130 employees.

Algorithm for switching to a patent

An individual entrepreneur can choose the option in which part of his activities will be taxed under a simplified system, and the part that is suitable by law is transferred to the STS, or make a complete transition, completely abandoning the simplified tax system. To do this, the following steps are required:

1. Submitting an application at least ten days before the planned start of work on the patent, and it is required to indicate the desired period of activity of the patent (up to 12 months or before the end of the calendar year). It is enough to contact the tax office at the place of registration of the individual entrepreneur. You can submit a document:
   during a personal visit;
2. through a representative (by proxy);
3. send by mail;
4. through the Internet.

IMPORTANT! A document confirming payment of tax under the patent system is not provided to the tax office.

5. 5 days of waiting for the application to be considered by tax authorities.
6. Issue of a patent in the form approved by Order of the Federal Tax Service of the Russian Federation No. ММВ-7-3/599 dated November 26, 2014, or refusal to issue in the form from Order of the Federal Tax Service of the Russian Federation No. ММВ-7-3/957 dated December 14, 2012. Simultaneously with the patent, the individual entrepreneur will receive a certificate stating that he is registered as a PSN payer (letter of the Federal Tax Service No. PA-4-6/22635 dated December 29, 2012).

NOTE! A newly minted individual entrepreneur can immediately choose a patent taxation system by indicating this in the application. Then he will be issued a patent simultaneously with registration documents.

What taxes are individual entrepreneurs exempt from on the PNS?

Individual entrepreneurs are not paid in this special regime (clause 10, clause 11 of Article 346.43 of the Tax Code of the Russian Federation):

• Personal income tax (on income received from business activities);
• VAT (except for cases of mandatory payment of value added tax when importing imported goods and when conducting transactions with VAT);
• property tax for individuals (on property used for business activities).

From 01/01/2021, individual entrepreneurs under the patent taxation system (PTS) were given the opportunity to reduce the amount of tax by the amount of insurance premiums and sick leave benefits paid for the first three days of illness. The deduction is provided in the amount:

• insurance premiums for yourself (for mandatory pension and health insurance) in the amount of 40,874 rubles;
• insurance premiums for workers engaged in activities covered by the PSN - no more than 50% of the cost of the patent.

Insurance premiums reduce tax only if they are paid during the patent period. To reduce tax, an individual entrepreneur sends a notification to the Federal Tax Service in the form KND 1112021. The recommended form of notification is communicated to taxpayers by Letter of the Federal Tax Service of Russia No. SD-4-3/ dated 01/26/2021.

ConsultantPlus experts examined whether an individual entrepreneur should notify the tax office about the transition to a patent tax system in order not to pay a trade tax. Use these instructions for free.

Why can the Federal Tax Service refuse a patent?

The tax authority, having considered the submitted application, may not allow the entrepreneur to apply the PSN. There may be the following reasons for this:

• These types of activities do not fall under Art. 346.43 of the Tax Code of the Russian Federation, limiting the use of the patent system;
• the validity period of the patent is indicated incorrectly: it exceeds a calendar year, or this year no activity recognized as patent was carried out, or the conditions for the patent were not met;
• the individual entrepreneur has a tax arrears under the PSN;
• non-compliance with the conditions for PSN (based on the number of hired workers and/or annual income);
• the entrepreneur did not fill out all the required items in the application form.

How to apply

To obtain a patent, a completed copy of the application is submitted to the Federal Tax Service (form No. 26.5-1, recommended by letter of the Federal Tax Service dated February 18, 2020 No. SD-4-3 / [email protected] ). The document can also be submitted to the MFC or sent by mail (by a valuable letter with an inventory). It is allowed to send a notification electronically via TKS, if the entrepreneur has an electronic signature. The application will be considered within 5 days, after which the individual entrepreneur will be issued either a patent or a written refusal. The list of reasons why you can be refused the use of a special regime is given in paragraph 4 of Art. 346.45 Tax Code of the Russian Federation:

• discrepancy between the declared type of activity and the list of types for which PSN can be applied, in accordance with regional legislation;
• the patent validity period is indicated incorrectly;
• violation of established limits for the use of PSN;
• All required fields are not filled in in the application;
• The individual entrepreneur has an arrears under the patent.

The beginning of the validity period is indicated in the patent itself. It is allowed to issue several patents at the same time - for different types of activities or for individual objects. Their validity periods may not coincide.

“No” simplified tax system, “yes” PSN

If an entrepreneur has made a choice in favor of a complete transition to a patent, he will lose the right to use the “simplified version”. In this case, you need to fully pay off the relevant tax payments and report on them:

1. Patent tax is paid at the beginning of the quarter in which the entrepreneur loses the right to the simplified tax system.
2. If monthly payments under the simplified tax system were not made on time, fines and penalties are calculated for this and they do not apply to the quarter in which the entrepreneur switched to the simplified tax system.
3. It is necessary to notify the Federal Tax Service of the termination of the simplified tax system. To do this, the individual entrepreneur has a period of 15 days after completion of the “simplified” work.
4. If an individual entrepreneur plans to later return to the simplified tax system, he will have to work in a different tax regime for at least a year (clause 7 of article 346.13 of the Tax Code of the Russian Federation).

When is it possible

Whether you will be able to switch to a patent in the middle of the year depends on the number of activities of your organization. Which one do you want to apply the patent to?

Patent for a new type of activity

If an individual entrepreneur is already working on the simplified tax system and wants to open an additional line of business on a patent. There is no ban on this. In this case, there will be a combination of taxation systems, not a transition. In this situation, it is necessary to maintain separate accounting in two modes in order to see the income and expenses of each.

A patent for one of the existing activities

If an individual entrepreneur on the simplified tax system has several lines of business, then one of them can be transferred to a patent in the middle of the year. At the same time, other directions will remain simplified. (letter of the Ministry of Finance dated December 29, 2020 No. 03-11-03/4/116148).

Here there will also be a combination of simplified taxation system and PSN and separate accounting will be required.

Patent for a single type of activity

This is the most ambiguous situation. There are no such explanations in the Tax Code, and the letters from the Ministry of Finance contradict each other.

Some letters confirm the possibility of a transition at any time (letters from the Ministry of Finance of Russia dated 02/04/2015 No. 03-11-11/4299, dated 04/29/2016 No. 03-11-12/25785, dated March 25, 2022 No. 03-11-11 /23200), others indicate that the transition from simplified tax system to PSN is allowed only from the beginning of next year (Letter dated August 20, 2019 No. 03-11-11/63550).

If only or all types of activities are transferred to a patent, then the entrepreneur loses the right to simplification. The taxpayer is obliged to notify the tax office about this in the manner prescribed by clause 8 of Art. 346.13 Tax Code of the Russian Federation. Such conclusions are contained in the letter of the Ministry of Finance of Russia dated May 14, 2020 No. 03-11-11/39360.

These letters are not regulatory legal acts, but they are valid, and local tax authorities can use any of them. To understand the position of your Federal Tax Service, make a request based on your situation.

In practice, many entrepreneurs find a way out of the situation - they register another OKVED and find themselves in a situation where transfer to a patent of one type is permitted. In this case, the simplification will remain as a safety net in case of exceeding patent restrictions or opening a new type of activity.

We talked in detail about adding OKVED for individual entrepreneurs in the article.

Reasons for changing the tax system

The transition to another tax regime can be voluntary or forced. In the first case, the main reason for the transition will be a reduction in the tax burden. In the second, the organization or individual entrepreneur violates the conditions for applying the preferential treatment.

For example, when registering an LLC, it chose the USN Income system. But then the company began to conduct business with a high share of expenses and paying taxes without taking them into account became unprofitable. In this case, it is worth considering the option of the simplified tax system Income minus expenses, the transition to which is possible only from the new year.

If an organization has exceeded the limit on annual income or number of employees, then it loses the right to the simplified tax system and must switch to OSNO. In this case, the tax system will have to be changed, even if it is unprofitable for business.

When voluntarily switching to other preferential regimes, many different criteria must be taken into account, including the period of the year. But if the conditions for applying reduced rates are violated, there is no need to wait for anything - the organization or entrepreneur “flies” from the special regime and ends up on the general system at any time of the year.

Please note: when switching to another taxation system, the accounting deadlines for submitting declarations, paying taxes, and the procedure for recognizing income and expenses change. An incorrect change in tax regimes will lead to problems with the Federal Tax Service, so in such a situation we recommend turning to professionals.

The general algorithm for switching to preferential regimes is as follows:

1. Study the conditions for applying the chosen taxation system, including possible transition dates.
2. Conduct an individual calculation of the tax burden for a specific business.
3. Complete and submit a notice or application for transfer.
4. Make sure that the transition to preferential treatment is registered.
5. Submit reports and pay taxes under the previous regime.

Now let’s look in detail at how an individual entrepreneur or LLC can change the taxation system.

How long does it take

After receiving the application, the tax authority is obliged to review it within five days and give a positive or negative response. In the first case, this will be the issuance of a patent certificate. In the second, the applicant is given a formal notice of refusal.

The patent form is uniform and approved by the Order of the Federal Tax Service. In this case, the individual entrepreneur independently chooses the patent term, which is issued for a period from one month to a year exclusively for a calendar period and does not transfer to another year.

Important! If a patent certificate is issued for a period of less than a year, the period is considered to be the months for which the patent was issued. If an individual entrepreneur closes activities under a patent before its expiration, the tax period will be recognized as the period from the beginning of its validity until the date of closure of production.

At the same time, the amount of income received by the enterprise does not affect the cost of the patent received.

The tax rate under this system is 6%. However, regions have the right to adopt legislation to reduce it.

The formula for calculating the tax amount is as follows:

H = (Revenue base / 12 months × patent term) × 6%, where:

• N - the estimated amount for the patent, accrued for payment;
• revenue base - the projected annual income of an enterprise, taking into account its approved size under federal or regional legislation. But it also depends on the Russian Federation and on the type and location of activity.

After making payments within the established time frame, the individual entrepreneur is obliged to transfer this amount to the budget.

When the patent term does not exceed six months, payment is made no later than its expiration date.

If the patent is issued for more than six months, tax is paid in two amounts:

• 1/3 - three months after the start of production activities under the patent;
• 2/3 - until the expiration of his patent.

Important! Under the patent taxation system, the entrepreneur does not provide tax payment documents to the tax office.

When is a transition possible?

STS or UTII - which is more profitable for individual entrepreneurs, is it possible to switch to another regime

As mentioned above, thanks to recent amendments to the Tax Code, switching to a patent tax system for individual entrepreneurs has become somewhat more difficult. First of all, this must be done at the end of the reporting year and only upon application to the tax authority at the place of registration. Its sample can be downloaded from the Federal Tax Service website.

But, if permission from the tax authorities is nevertheless obtained, do not forget that the patent is valid only during the calendar year, which means such an action is not very profitable at the end of the year. Of course, you can always extend the patent in January, but it is worth analyzing how financially feasible this is.

Thus, the opportunity to switch to a patent always exists, but you need to understand how beneficial this is for the entrepreneur.

Who has the right to switch to PSN

Only entrepreneurs registered in the prescribed manner have the right to use such a profitable system as PSN. The transition to a patent taxation system for an entrepreneur is possible if all conditions established by law are met. Only individual entrepreneurs whose average number of personnel (including employees under civil contracts) for all types of activities do not exceed 15 people for the tax period are allowed to use PSN (Clause 5 of Article 346.43 of the Tax Code of the Russian Federation). In addition, there is a limit on annual income - no more than 1 million rubles (regional laws change this limit).

Find out for free about other tax regimes for individual entrepreneurs from a review from ConsultantPlus experts.

The main condition for the transition is the compliance of the types of activities carried out by individual entrepreneurs with the approved lists permitted for the use of the patent system. Clause 2 of Article 346.43 of the Tax Code of the Russian Federation names the types of business activities in respect of which the PSN is applied. The complete list of activities is established by the constituent entities of the Russian Federation by their laws and regulations. For example, the Law of St. Petersburg No. 551-98 dated October 30, 2013 “On the introduction of a patent taxation system in the territory of St. Petersburg” establishes the following types of business activities:

• repair and sewing of clothing, fur and leather products, hats and textile haberdashery products, repair, sewing and knitting of knitwear;
• hairdressing and beauty services;
• dry cleaning, dyeing and laundry services;
• maintenance and repair of motor vehicles and motor vehicles, machinery and equipment;
• provision of motor transport services for the transportation of passengers and goods by road;
• services for training the population in courses and tutoring;
• repair of computers and communications equipment;
• and others.

IMPORTANT!

From 01/01/2021, the list of activities for which the use of PSN is permitted has been expanded, including those that were used within the framework of UTII:

• car washes and parking lots;
• vehicle repair;
• vehicle maintenance.

This should facilitate the transition of entrepreneurs to a patent with UTII. Subjects of the Russian Federation will have the right to introduce PSN on their territory in relation to any types of activities listed in OKVED, to establish in relation to such types of activities any physical indicators for calculating the tax base.

Submitting an application to the Federal Tax Service

How to change the tax system for individual entrepreneurs and how often can this be done?

To switch to a patent, the head of an individual entrepreneur must submit an application for a patent for the type of activity he needs. The application form can be easily found on the tax website or on a thematic Internet portal.

Obtaining a patent

After filling out, the certified form is submitted to the Federal Tax Service office at the place of registration in person or sent via regular or e-mail with a notification of reading. This must be done no later than 10 working days before the start of this type of activity based on the patent.

How will the tax period for a patent change in 2021?

An ambiguous innovation is a change in the tax period for a patent.

In 2022, the tax period for a patent will be a month, but only if the patent is issued for a year (Article 346.49 of the Tax Code of the Russian Federation as amended by Law No. 373-FZ).

This rule was introduced primarily for those individual entrepreneurs who will switch to a patent from “imputation”. These entrepreneurs are not accustomed to patent restrictions and may violate, for example, a revenue limit in the middle or at the end of the year.

According to the rules in force in 2022, such an individual entrepreneur would have to pay taxes based on the simplified tax system or OSNO from the beginning of the year. And in 2021, he will begin to apply the new regime from the beginning of the month when the limit was exceeded (clause 6 of Article 346.45 of the Tax Code of the Russian Federation).

“tax holidays” in 2022 - a zero rate on a patent provided for certain types of activities (clause 3 of Article 346.50 of the Tax Code of the Russian Federation).

The fact is that “vacations” with a patent can be used for two tax periods in a row within two calendar years.

If an individual entrepreneur buys a patent for the entire year 2022, then formally there will be two tax periods – these will be January and February, and from March he will no longer be able to use the “vacations”.

An entrepreneur can buy a patent from the beginning of 2022 for 11 months, then this restriction will not apply. But in this case, he will have to immediately buy a second patent for December, since the validity of the patent cannot extend beyond a year. It turns out that the second year for the benefit will “disappear.”

As of today (December 2022), the most profitable option for a beginning individual entrepreneur who wants to use the “vacation” in 2022 is to start work and take out the first patent not from the beginning of 2022, but, for example, from February 1 to December 31.

Then the tax period for the benefit in 2022 will be 11 months. Then the individual entrepreneur will be able to take out a second patent without interruption at a zero rate for the entire 2022.