Tax base
The obligation to pay property taxes to organizations using a simplified taxation system was imposed by Federal Law No. 52-FZ of April 2, 2014.
It was he who introduced amendments to the first paragraph of paragraph 2 of Article 346.11, according to which “simplified people” must pay tax in relation to real estate objects, the tax base for which is determined as their cadastral value. In this case, the cadastral value must be determined as of January 1 of the current year (if such data was not available on January 1, then there is no need to pay a fee). Thus, the tax base in this case is all types of real estate that have a cadastral value at the beginning of the tax period.
What applies to such property?
- Shopping and business centers, premises in them.
- Office and retail premises.
- Restaurants, cafes, canteens - public catering facilities.
- Public service buildings.
- Residential buildings and premises, we will talk about them separately.
What taxes should entrepreneurs not pay using the simplified tax system?
Article 346.11 (paragraphs 2-3) contains a list of taxes from which individual entrepreneurs and organizations using the Simplified Taxation System are exempt. So, individual entrepreneurs and organizations do not have to pay the following taxes in 2020:
Tax that does not need to be paid to the simplified tax system
Exception and comment
Property tax
It is necessary to pay property tax according to the cadastral valuation
Corporate income tax
Payable on dividends that entrepreneurs rely on the simplified tax system from other businesses
Value added tax (VAT) on the sale of valuables (in the vast majority of cases)
There is no need to keep a book of purchases and sales, submit reports and issue an invoice
To know what taxes individual entrepreneurs must pay and when, we recommend studying this tax calendar.
That is, individual entrepreneurs and organizations are not required to pay all the taxes that were listed in the table. All fees are replaced by tax according to the simplified tax system.
Let us add that the tax according to the simplified tax system may have one of the following objects of taxation:
Let us note that the application of the simplified tax regime does not exempt either organizations or entrepreneurs from performing the function of a tax agent for personal income tax.
Special conditions
However, not all so simple. In addition to the cadastral value, several other important conditions must be met in relation to real estate:
- The building, structure, structure or premises therein must belong to the taxpayer organization on the right of ownership or right of economic management.
- Real estate must be accounted for on the organization’s balance sheet as part of fixed assets (account 01 “Fixed Assets” or 03 “Profitable Investments in Material Assets”).
- The land plot under the real estate must have the appropriate type of permitted use: for the placement of retail units, public catering and (or) consumer services; for the placement of office buildings for business, administrative and commercial purposes.
- More than 20% of real estate, according to the Unified State Register of Real Estate, is intended for use for these purposes. For example, to host trading platforms. It is important to confirm the actual use of the facility for the specified purposes, in the declared volume, not less than 20%.
- Real estate property must be included in the list of objects for which the tax base is determined as the cadastral value.
The list from the last paragraph must be determined by the subject of the Russian Federation (at the location of the real estate) and published on the official website of this subject of the Russian Federation. You can find out the cadastral value by receiving an extract from Rosreestr about the cadastral value of the object in accordance with Article 63 of Law No. 218-FZ. If all conditions are met, you must pay a real estate tax. If any condition is not met or the cadastral value has not been determined, there is no need to pay tax obligations for this year.
The Ministry of Finance of Russia, in a letter dated March 11, 2016 No. 07-01-09/13596, reminded that the simplified people still do not pay the property tax, based on the book value of the objects. By the way, individual entrepreneurs using the simplified tax system are still exempt from tax, however, there is one exception, which will be discussed below.
Residential Properties
Is property tax paid under the simplified tax system on residential buildings and premises? Residential real estate is also recognized as subject to property taxation. But there are exceptional rules for such objects.
A residential property will be recognized as taxable if it is not listed in the organization as a fixed asset. That is, residential real estate is taxable if it is taken into account in the organization’s balance sheet in the following accounts:
- 08 “Investments in non-current assets”;
- 41 "Products";
- 43 “Finished products”.
In relation to such objects, property tax for simplifiers is calculated based on the cadastral value (Letters of the Ministry of Finance of Russia dated 05/19/2017 N 03-05-05-01/30753, dated 01/25/2019 N 03-05-05-01/4064).
IMPORTANT!
If residential real estate is taken into account in or 03 “Profitable investments in material assets,” then it is not recognized as a taxable object (Letter of the Ministry of Finance of Russia dated December 22, 2017 N 03-05-05-01/86054).
Property tax for individual entrepreneurs using the simplified tax system
By virtue of Article 346.11 of the Tax Code of the Russian Federation, the use of the simplified tax system by individual entrepreneurs provides for their exemption from payment of property tax for individuals in relation to property used in business activities. However, there is an exception: if the real estate they own is included in the list of administrative, business and shopping centers approved by a constituent entity of the Russian Federation in accordance with paragraph 7 of Article 378.2 of the Tax Code of the Russian Federation, they still need to pay tax.
The specifics of calculating and paying such tax for individual entrepreneurs are regulated by Chapter 32 “Property Tax for Individuals” of the Tax Code of the Russian Federation, introduced by Federal Law No. 284-FZ of October 4, 2014. According to Article 400 of the Tax Code of the Russian Federation, payers of property tax for individuals are all citizens who have the right of ownership of property recognized as an object of taxation. This applies equally to individual entrepreneurs.
The basic rules that individual entrepreneurs must adhere to when calculating the amount payable are as follows:
- By virtue of Article 405 of the Tax Code of the Russian Federation, the tax period is recognized as a calendar year.
- According to the provisions of Article 408 of the Tax Code of the Russian Federation, the tax amount is calculated by the tax authority after the expiration of the tax period. This amount is determined by tax authorities separately for each taxable item.
- It is necessary to pay the property tax of individual entrepreneurs under the simplified tax system no later than October 1 of the year following the expired tax period, this is stated in Article 409 of the Tax Code of the Russian Federation.
- Taxes must be calculated and paid at the location of the property. For example, if an individual entrepreneur is registered in one region, and the property is in another, you need to pay at its location.
Now we know that individual entrepreneurs do not need to calculate anything themselves, and also report to the Federal Tax Service. The tax notice will be sent to him by the Federal Tax Service itself at the location of the property. Also, the individual entrepreneur should not make any advance payments. However, an individual entrepreneur, like a legal entity, may have questions related to the cadastral value.
Taxation of individual entrepreneurs using the simplified tax system and LLCs using the simplified tax system (table)
Let's take a closer look at the taxation of individual entrepreneurs:
| IP on the simplified tax system | LLC on the simplified tax system |
| Tax rates | |
| – 6%, the object of taxation is the total income of the enterprise for the year. Costs are not included in the calculation. The regime is beneficial to those who receive stable incomes and do not incur large expenses. – 15%, the tax base is made up of the difference between the income and expenses of the enterprise. The system is beneficial to those who have relatively large expenses in the course of their activities and hire employees. | |
| Frequency of tax payment | |
| Once a year | Every quarter (advance payments, 25% of the total tax) |
| Submitting reports | |
| The declaration only needs to be submitted once at the end of the year. | |
| Accounting and document flow | |
| If a 6% rate applies, no accounting is required at all. If you choose a system with a rate of 15%, you need to keep a Book of Income and Costs. In both cases, keeping accounts and organizing document flow does not seem to be a difficult task. | |
| Minimum opportunities to receive claims from the tax service | |
| The list of costs that can be taken into account when calculating tax and thereby reducing the tax base is closed, which means that other costs cannot be included in the list of costs in principle. Therefore, it is almost impossible to cause dissatisfaction with the tax authorities regarding the illegality of reducing the tax base. | |
| No need to pay VAT | |
| One less reason for a tax audit. | |
| No income tax | |
| And along with it - the need for the Federal Tax Service to control the accounting of losses of the enterprise | |
| Restrictions on the use of the simplified tax system | |
| – No more than one hundred employees, including part-time workers and contractors; – There is an income limit: from January 1, 2020 it is 150 million rubles. | |
| Limitation of transition to simplified tax system – The amount of income for 9 months cannot exceed 112 million rubles; – The company’s equity capital must be at least 75% of the total; – The cost of fixed assets should not exceed 150 million rubles. | |
How to deal with cadastral value?
So, if an organization or individual entrepreneur using the simplified tax system has found out that they are obliged to pay tax on the cadastral value, the question immediately arises of how to do this practically. First of all, on the basis of Article 378.2, the tax base in this case in the subject in which the company is registered as a taxpayer must be established by the cadastral value of real estate objects.
If disagreements arise based on the results of the assessment, the value of the object can be challenged in court or out of court. In the second case, you should submit an application, within six months from the date the object was entered into the cadastral register, to a special commission dealing with this issue. There must be good reasons for this: either the area of the property is incorrectly determined, or the cost does not correspond to the market assessment. You will also need to attach the necessary documents:
- cadastral passport;
- documents certified by a notary on the ownership of this property;
- documents on the basis of which you claim that the cadastral valuation is biased;
- conclusion of an expert member of the SRO on the assessment of the market value of the property.
If after the appeal the cadastral value has changed, then the tax can be recalculated from the beginning of the period, even if the decision was made in December.
How to calculate property tax under the simplified tax system?
Since the property tax is a regional tax, all amendments to federal legislation must be prescribed by local authorities. This applies to both rates and the obligation to pay. In any case, the tax base will be the cadastral value of the property. If there are several such objects, then calculations must be made for each of them. The fee rate is determined by the authorities of the constituent entity of the Russian Federation. The Tax Code of the Russian Federation only determines the maximum rates from 0.1% to 2%, depending on the type of object. The gratuitous transfer of property under the simplified tax system does not affect the amount and rate of tax in any way.
In addition, legal entities are required to make advance payments every quarter. The procedure for their calculation is determined by Article 382 of the Tax Code of the Russian Federation: the amount of the advance payment is calculated once a quarter as 1/4 of the cadastral value of real estate as of January 1 of the year that is the tax period, multiplied by the corresponding tax rate.
In the case where the cadastral value of the entire building or structure has been determined, and the payer owns only part of it, the tax base is calculated in proportion to the area.
The deadlines within which it is necessary to transfer the fee to the budget and submit reports are also established by local authorities.
Regulatory acts on the topic
Let's take a closer look at the regulations.
| clause 2 art. 346.11 Tax Code of the Russian Federation | On determining the amount of property tax based on the cadastral value of the property |
| clause 1 art. 378.2 Tax Code of the Russian Federation | List of objects subject to taxable property under property tax |
| Art. 379 Tax Code of the Russian Federation | On the establishment of reporting periods for property tax in the constituent entities of the Russian Federation |
| Clause 1.1 of Article 379 of the Tax Code of the Russian Federation | About the property tax rate |
| clause 12 art. 378.2 Tax Code of the Russian Federation | About advance payments for property taxes |
| clause 5 art. 382 Tax Code of the Russian Federation | On taking into account the time of actual operation of property when calculating property tax |
| clause 13 art. 378.2, paragraph 1 of Art. 383 Tax Code of the Russian Federation | About the deadlines for paying property taxes |
Accounting
Since organizations using the simplified tax system are required to maintain accounting records, they need to reflect all tax transactions in them. To reflect accrued amounts of property tax in accounting, it is necessary to follow the general rules for recognizing expenses. Thus, in PBU 10/99, all expenses of the organization, depending on their nature, conditions of implementation and areas of activity, are divided into:
- expenses for ordinary activities;
- other expenses.
All expenses other than expenses for ordinary activities are recognized as other. The calculated amounts should be attributed to expenses for ordinary activities. The Ministry of Finance warns about this in letter No. 03-05-05-01/16. To make entries, you must use the Instructions for using the Chart of Accounts for accounting the financial and economic activities of organizations, approved by Order of the Ministry of Finance of Russia dated October 31, 2000 N 94n. It says that the amount of tax (advance payment) on property accrued by an organization on a tax return is reflected by an entry in the debit of account 26 “General business expenses” and the credit of account 68 “Calculations for taxes and fees.” The wiring looks like this:
- Debit 26, 44 Credit 68 - accrued;
- Debit 68 Credit 51 - transferred.
Property tax reporting under the simplified tax system
The procedure for submitting a tax return for property tax under the simplified tax system to the Federal Tax Service is determined by Article 386 of the Tax Code of the Russian Federation. Simplified workers must report on a general basis if they are payers.
The declaration and calculations for advance payments must be submitted at the end of each reporting and tax period to the tax authorities at the location of its location, the location of each of its separate divisions that have a separate balance sheet, as well as the location of each piece of real estate. Calculations are submitted quarterly no later than 30 calendar days from the end of the corresponding reporting period, and the declaration must be submitted annually no later than March 30 of the year following the expired tax period.
Calculation forms and declarations for property tax were approved by order of the Federal Tax Service of Russia dated March 31, 2017 N ММВ-7-21/ [email protected] , as amended on October 4, 2018. When filling them out, organizations using the simplified tax system should pay special attention to section 3, which is filled out in relation to real estate objects, the tax base for which is the cadastral value.
More about the simplified tax system
- recommendations and assistance in resolving issues
- regulations
- forms and examples of filling them out
ConsultantPlus TRY FREE
Payment deadlines
Organizations are required to submit tax reporting documents by March 30 of the year following the end of the tax period.
Entrepreneurs are recommended to pay the tax before December 1 of the year in which the tax period occurred.
Specific deadlines are established by the authorities of the constituent entities of the Russian Federation, based on the resolutions and laws adopted by them that apply to the given region.
The property tax rate is determined by current legislation. How is property tax for legal entities calculated? Information here.
Who is the payer of the organization's property tax? Details in this article.
