Simplificationists who choose “income minus expenses” as their object at the end of the year may receive a negative result from their work. But a loss does not guarantee them complete tax exemption. If there are incomes in the book of income and expenses during the tax period, and even if the amount of expenses significantly exceeds them, taxation still cannot be avoided.
Let's take a closer look at how the “simplified” tax is calculated for unprofitable activities if expenses exceed income under the simplified tax system with a “income-expenditure” object.
Let me give you an example:
For the year, the individual entrepreneur M.I. Kroshkin, working on the simplified tax system of 15%, had a total income for the year of 2,650,000 rubles, expenses amounted to 2,890,000 rubles. That is, expenses exceeded income. It would be logical to assume that at the end of the year, IP Kroshkin M.I. does not have to pay tax to the simplified tax system.
However, in this situation there is a need to apply a minimum tax of the simplified tax system, amounting to 1% of total income. That is, Kroshkin M.I. will pay 26,500 rubles.
A situation may arise in which, based on the results of a quarter or half a year, income exceeded expenses, which means that the entrepreneur had to pay in advance based on the results of the quarter and half a year. At the end of the year, this paid amount will need to be subtracted from the calculations obtained by recalculating the entire annual income multiplied by 1%. That is, payments for the year, taking into account advance payments made for the quarter and half-year, will amount to 1% of income.
How to confirm your losses
When, under the simplified tax system, expenses are greater than income , the Tax Code provides for the possibility of taking into account losses incurred during the year to reduce the tax base for another 10 years. If this period has passed, then it will no longer be possible to take into account the loss.
If you wrote off all your losses for a certain reporting year, then for another four years you will have to keep all the documentation confirming the legality of such actions. In the event of an inspection, you are required to provide the inspector with the necessary information.
You should store not only supporting documents, but also information on the amount of loss for all tax periods. To prevent inspectors from having questions and difficulties, it is better to systematize such papers and files and place them in separate folders.
Also see “STS since 2017: how the limits on income and fixed assets will increase.”
Example:
Kroshkin M.I. in the first quarter he had accrued tax (income-expense X 15% = 3,600 rubles, he paid it in advance. At the end of the six months he also had accrued tax (income-expense) X 15% = 9,500 rubles. But the results of the year were disappointing, and his expenses exceeded his income.
In this case, 1% of the total annual income is taken 26,500.00 - 3,600 (advance payment for the first quarter) - 9,500.00 (advance payment for the half-year) = 13,400.00. We received the amount of the minimum tax that must be paid at the end of the year.
Clauses 6 and 7 of Article 346.18 of the Tax Code of the Russian Federation allow you to take into account the difference between the simplified and minimum tax for the previous year. The difference between the simplified and minimum tax, which was calculated and paid at the end of 2021, can be included in 2020 expenses.
Documents that confirm the size of the loss and the amount by which the tax base will be reduced for each tax period must be kept during the entire period of reducing your tax base for the loss (paragraph 7, clause 7, article 346.18 of the Tax Code of the Russian Federation), and then for another four years after the loss has been written off. The loss can be taken into account within 10 years following the year in which it occurred (paragraph 2, paragraph 7, article 346.18 of the Tax Code of the Russian Federation).
Be careful when determining income and expenses, since not all income and expenses are reflected in tax accounting, but only those that meet the criteria for recognizing income and expenses under the simplified tax system listed in Art. 346.15-346.17 Tax Code of the Russian Federation.
When you transfer the final tax amount for the year, please note that the budget classification codes for advance payments and the minimum tax of 1% in 2021 are the same: 182 1 0500 110
Minimum tax on loss
When calculating the single tax on the simplified tax system “income minus expenses”, only those incomes and expenses that meet the criteria of the Tax Code can be included in the tax base (Articles 346.15, 346.16, 346.17). If, from the beginning of the reporting year, the expenses of the simplifier exceed his income, or are equal to each other, then the total single tax will be zero.
But paying nothing to the budget at all will not work; this is only possible in one case - if there was no income at all. And if during the year at least some income was received, then it should be subject to a minimum tax (clause 6 of Article 346.18 of the Tax Code of the Russian Federation).
In fact, the minimum tax is the minimum amount of a single tax under the simplified tax system. To calculate it, all income received during the year must be multiplied by 1%. Expenses are not taken into account.
© photobank Lori
The minimum tax is also paid in the case when the result of calculating the simplified tax system, calculated at a rate of 15%, is less than 1% of income. That is, in fact, the “simplified” person needs to make two tax calculations, compare them and choose the larger result for payment.
Let's look at an example.
Example
The income of individual entrepreneurs using the simplified tax system “income minus expenses” for the year amounted to 250,000 rubles. Expenses for the same period – 310,000 rubles. For the year, the entrepreneur received a loss of 60,000 rubles (250,000 rubles - 310,000 rubles). He does not need to calculate the general tax at a rate of 15%, since there is no basis for calculating the tax, but the minimum tax should be charged on income in the amount of 250,000 rubles:
250,000 rub. * 1% = 2500 rub.
At the end of the year, you need to pay 2,500 rubles to the budget.
If the expenses of an individual entrepreneur for the year were less than income and amounted to, for example, 240,000 rubles, then the total tax at a rate of 15% would be lower than the amount of the minimum tax:
(250,000 – 240,000) * 15% = 1,500 rub.
And in this case, you will still have to pay 1% of your income to the budget - 2,500 rubles. The amount of the difference between the “simplified” tax and the minimum tax can be transferred “for the future”, that is, included in the expenses of the next tax period in accordance with clause 6 of Art. 346.18 Tax Code of the Russian Federation.
How to offset advance payments with the minimum tax simplified tax system?
During the year, an entrepreneur using the simplified tax system is obliged to calculate and pay advance payments to the simplified tax system to the Federal Tax Service. There are situations when, after summing up the work for the year, it turns out that despite the fact that in the first three months, six months, nine months advance payments were accrued and paid for the individual entrepreneur, at the end of the year it turned out that expenses exceeded income. It turns out that you need to pay a minimum payment. But advance payments have already been transferred to the budget.
What to do in this case? Don't worry, in this case the advance payments will go towards reducing the minimum tax. But this issue will not be resolved automatically. According to clause 4 of Article 78 of the Tax Code of the Russian Federation, an entrepreneur must submit to the Federal Tax Service at the place of registration an application for crediting advance payments in favor of the minimum tax of the simplified tax system. The application must be submitted no later than 10 days before the deadline for tax payment at the end of the year.
If the result of the previous year’s work was a loss, this does not mean that there is no need to pay advance payments, because losses are taken into account only at the end of the calendar year. In this case, you can only take into account the loss that was received during the period of application of the simplified procedure with the object “income minus expenses”. After all, a simplifier can change his object of taxation annually (clause 2 of Article 346.14 of the Tax Code of the Russian Federation).
The article has been edited in accordance with current legislation 12/17/2019
Impact of loss on simplified tax
If your business's expenses on the simplified tax system exceed its income, you don't have to make an advance payment for the corresponding periods. This applies to a quarter, half a year and nine months. But in case of a loss at the end of the whole year, the situation is somewhat different.
There is a concept of minimum simplified tax. Its size is equal to one percent of only income for the entire year. You will have to pay it even if the activity is generally unprofitable throughout the year.
For more details, see “Minimum tax on the simplified tax system in 2016.”
Keep in mind: from 2021 there will be no separate BCC for the minimum tax on the simplified tax system “income minus expenses”. see also
If you did not take into account the loss received in the previous year, then its value can be used to reduce the tax base in the current or subsequent periods. This allows you to reduce the amount of profit received by the amount of losses that were received in the previous year. You can also take into account losses that occurred at least a few years ago.
Please note that advance contributions to the simplified tax system do not depend on losses incurred in previous years. They will still have to be done, because the negative effect of other years can only be taken into account after summing up the results of the entire year.
We also remind you that a past loss can reduce the simplified tax this year only if it was received using the simplified tax system “income minus expenses.” If you changed the object of taxation, then you will no longer be able to take into account previous losses.
This might also be useful:
- How to work on the simplified tax system income 6%
- Pros and cons of the simplified tax system and UTII in comparison
- Minimum tax under the simplified tax system in 2021
- VAT accounting for individual entrepreneurs using the simplified tax system in 2021
- Individual entrepreneur reporting on the simplified tax system without employees
- simplified tax system for individual entrepreneurs in 2021
Is the information useful? Tell your friends and colleagues
Dear readers! The materials on the TBis.ru website are devoted to typical ways to resolve tax and legal issues, but each case is unique.
If you want to find out how to solve your specific issue, please contact the online consultant form. It's fast and free!
Unprofitability of the enterprise
When talking about the losses of an enterprise, it is customary to separate two very important concepts (see table).
| Concept | Explanation |
| Accounting loss | When calculating it, the real results of entrepreneurship are taken into account. In this case, all proceeds from the activity and expenses incurred as a result of it are taken into account. |
| Tax loss | It differs from an accounting loss in that when calculating it, not all types of income and expenses are taken into account, but only those that “simplified” can recognize in accordance with the Tax Code of the Russian Federation. |
Note that not all entrepreneurs choose the option of paying tax according to the simplified tax system on income reduced by expenses. Some people opt for a simpler option from an accounting point of view. So, if you choose to pay tax exclusively on income, then the question of whether to pay the simplified tax system can be answered unequivocally: yes, always.
This is due to the fact that such “simplifiers” do not display their expenses in tax accounting. And as a result, it is impossible to come to a loss. If a company or individual entrepreneur works on the simplified tax system “income minus expenses,” then it makes sense to understand the situation of receiving a loss. Let's consider this situation.
Comments
Sergey 04/13/2016 at 10:21 am # Reply
What to do?
Registered an individual entrepreneur on 01/28/16, bought a vending machine (snack) 160 thousand rubles + 10 thousand delivery. Paid rent 2.5 thousand rubles. I bought 30 thousand products. Installed it on 03/04/16. After working for the month of March, on 03/31/16 I made a profit of 12 thousand rubles. 202,500 rubles expenses, 12 thousand income. How to fill out a declaration??? or submit a “zero return?”
Natalia 07/08/2016 at 08:41 # Reply
Sergey, the simplified taxation system declaration is submitted once a year, based on the results of the previous year, until April 30 of the next year. Those. You will submit a declaration in 2021, for 2021. If there is income, then this is no longer a zero declaration, but a regular one. Don’t forget to pay your contributions to the Pension Fund and the Federal Compulsory Medical Insurance Fund. They are paid regardless of whether you have a profit or not.
Advance payments under the simplified tax system from income
If you have chosen income as the object of taxation, then the tax base for the “simplified” tax is the monetary expression of the company’s income.
In this case, the single tax is calculated based on the tax rate (in most cases 6%) and income received at the end of the year.
During the year, “simplified” people pay advance tax payments. The amount of the quarterly advance payment is calculated based on the results of each reporting period based on the tax rate (in most cases 6%), income received during the reporting period, and advance tax payments calculated for the previous reporting period.
The accrued advance payment (and the tax itself) can be reduced, but not by more than half:
- the amount of contributions paid for compulsory pension, social and health insurance;
- for the amount of contributions “for injury”;
- for the amount of temporary disability benefits paid at the expense of the company’s own funds (with the exception of benefits paid in connection with an industrial accident and occupational disease);
- for the amount of payments under voluntary personal insurance contracts concluded in favor of employees in the event of their temporary disability with insurance companies licensed for this type of insurance (clause 3.1 of Article 346.21 of the Tax Code of the Russian Federation).
How to calculate advance payments under the simplified tax system from income
Calculate the advance payment under the simplified tax system with the object “income” using the formula:
| Advance payment under the simplified tax system with the object “income” | = | The amount of income for the reporting period on an accrual basis from the beginning of the year | × | Tax rate | – | The amount by which the advance payment can be reduced, but not more than the maximum amount | – | Amount of advance payments for previous reporting periods |
EXAMPLE OF CALCULATING ADVANCES UNDER THE STS WITH INCOME LLC "Passive" has switched to a simplified system and pays a single tax on income.
The company's income for the first half of the year amounted to 3,800,000 rubles, including 1,100,000 rubles for the first quarter. The amount of the advance payment for the single tax, which was accrued and paid based on the results of the first quarter, amounted to 66,000 rubles. (RUB 1,100,000 × 6%). During the six months, the organization paid compulsory insurance premiums for December, January, February, March. April and May in the total amount of 90,000 rubles, and also paid temporary disability benefits at my own expense in the amount of 20,000 rubles. The amount reducing the advance payment for the six months is 110,000 rubles. (90,000 rub. + 20,000 rub.). This amount does not exceed the maximum amount by which the advance payment can be reduced - 114,000 rubles. ((3,800,000 rubles × 6%): 2). The amount of the advance payment for the single tax, calculated based on the results of the first half of the year, amounted to 228,000 rubles. (RUB 3,800,000 × 6%). For the first quarter, Passive has already paid 66,000 rubles. This means that for the first half of the year you need to pay an additional 52,000 rubles. (RUB 228,000 – RUB 110,000 – RUB 66,000). How to calculate advance payments under the simplified tax system with the object of taxation “income”, read in the berator “STS in practice”
Deadlines for making advance payments under the simplified tax system
Advance payments for the simplified tax system are paid no later than the 25th day of the first month following the expired reporting period. In 2016, the deadlines for paying advance payments are as follows:
- for the first quarter of 2021 – no later than April 25, 2021;
- for the first half of 2021 – no later than July 25, 2021;
- for 9 months of 2021 – no later than October 25, 2021
How to calculate advance payments under the simplified tax system with the object of taxation “income minus expenses”, read in the “STS in practice” berator
Advance payments under the simplified tax system from income minus expenses
If you have chosen income reduced by the amount of expenses as the object of taxation, then the single tax is calculated based on the tax rate (in most cases 15%) and the difference between income and expenses at the end of the year.
The difference between income and expenses is determined on an accrual basis from the beginning of the tax period until the end of the first quarter, half a year, or nine months.
During the year, “simplified” people pay advance tax payments. The amount of the quarterly advance payment is calculated based on the results of each reporting period based on the tax rate (in most cases 15%), income and expenses for the reporting period and advance tax payments calculated for previous reporting periods.
How to calculate advance payments under the simplified tax system from income minus expenses
Calculate the advance payment under the simplified tax system with the object “income minus expenses” using the formula:
| Advance payment under the simplified tax system with the object “income minus expenses” | = | The amount of income for the reporting period on an accrual basis from the beginning of the year | – | The amount of expenses for the reporting period on an accrual basis from the beginning of the year | × | Tax rate | – | Amount of advance payments for the previous reporting period |
note
Contributions to compulsory social insurance, temporary disability benefits paid at the expense of the company and payments under voluntary personal insurance contracts are included in “simplified” expenses. That is, with this method of determining the tax base, contributions, sick leave and insurance payments do not reduce the single tax.
EXAMPLE OF CALCULATING ADVANCES UNDER THE STS FROM INCOME MINUS EXPENSES Passive LLC switched to a simplified system and pays a single tax on income reduced by the amount of expenses. The difference between the company’s income and expenses for the first half of the year amounted to 310,000 rubles, including for the first quarter – 110,000 rubles. The amount of the advance payment for the single tax, calculated based on the results of the first quarter, amounted to 16,500 rubles. (110,000 rubles × 15%). The amount of the advance payment for the single tax that must be paid at the end of the first half of the year will be: 310,000 rubles. × 15% = 46,500 rubles. However, for the first quarter, Passive has already paid 16,500 rubles. This means that for the six months you need to pay an additional 30,000 rubles. (46,500 – 16,500).
