Income tax is one of the taxes transferred to the budget and levied on all income received by individuals. The ordinary tax rate is thirteen percent of the tax base. Legislative regulation The procedure for withholding and transferring personal income tax is specified in the Tax Code of the Russian Federation in chapter twenty-three.
Chapters 26.1 to 26.3 of the Tax Code of the Russian Federation provide a clear concept of income tax payers, as well as persons in the preferential category. Let's take a closer look.
Potential income tax payers should be considered :
- Individuals residing permanently in the Russian Federation.
- Citizens whose main source of payments is work in Russia.
Tax residents are considered to be citizens who stay in Russia for at least one hundred and eighty-three calendar days based on twelve consecutive months. The preferential category of persons exempt from personal income tax includes: Citizens engaged in private business, who are on a simplified tax collection system, and those transferred to the payment of a single imputed tax for certain types of their activities.
General recommendations on the procedure for calculating income tax from individuals
To correctly calculate personal income tax, it is necessary to use the norms prescribed in the two hundred and twenty-fifth article of the Tax Code. Income tax calculations are carried out as follows:
- The first step in calculating personal income tax should be to determine the total income from which income tax will be calculated.
- Then, for each type of available income, you should clarify the rate by applying for this Article two hundred twenty-four of the Tax Code of the Russian Federation.
- The next step should be the calculation of income tax in the context of each individual type of income. In addition, you need to separately calculate the tax base that forms the income received from equity participation, taking into account the requirements prescribed in Article two hundred seventy-five of the Tax Code of the Russian Federation.
- • The final stage will be the calculation of personal income tax.
For these purposes, there is the following formula: Amount of personal income tax = Tax base * Tax rate corresponding to the type of income.
It should be noted that the mathematically calculated tax amount must be rounded up to the nearest full ruble. By adding up the calculation results for each type of income, we ultimately get personal income tax, which should be paid to the budget. Operations for withholding and transferring the amount of income tax due are carried out by the employing organization.
Types of income
In accordance with tax legislation, the income of individuals and entrepreneurs in the general taxation system is divided into two groups - received from sources in the Russian Federation and from sources outside its borders. Article 208 of the Code provides rules to determine from what source income is received.
Important
Are daily allowances subject to personal income tax?
When receiving income from the provision of services, it matters where they were sold. If this is Russia, the income of the service provider is considered to be received from sources in the Russian Federation. If the services were provided abroad, these are receipts from foreign sources.
The Tax Code of the Russian Federation separately stipulates the mechanism for taxing income from rental real estate. In relation to such income, one can apply the wording of either Article 38 of the Code, where any service is defined as an activity, the results of which do not have material expression, are sold and consumed in the process of carrying out this activity, or Article 148 of the Tax Code of the Russian Federation, where the provision of property for rent is considered as a service .
If the real estate is located in Russia, when determining the personal income tax base, rental payments are considered received from sources in the Russian Federation, if abroad - received from sources outside the country.
The procedure for calculating income tax withheld from the wages of an individual
The calculation and transfer of personal income tax is carried out from proceeds received from the main source of income, which is the tax agent. The income of an individual that he received from other sources is not included by the main employer in his total income. In the event that an employee of an enterprise carries out his labor activity in combination with another organization, then each of the employers calculates the personal income tax for each such employee separately.
The income a taxpayer employee from which personal income tax is withheld includes the following payments :
- Basic salary.
- Monthly, quarterly, semi-annual and annual bonuses.
- Amounts of accrued annual basic and additional leave.
- Amounts of accrued benefits for temporary disability certificates, with the exception of amounts of benefits for pregnancy and childbirth. • Accrued compensation for treatment, paid along with annual leave.
- The amount of accrued monetary assistance is over four thousand rubles.
- Additional payments for replacing temporarily absent employees.
- Other payments.
The tax base is calculated based on the availability of tax deductions available to employees of the organization. When taxing accrued wages for each employee, the following types of tax deductions must be taken into account: standard type, property, social. In this case, it should be noted that a standard tax deduction can be received by an employee classified as a special category in accordance with Article two hundred fifteen of the Tax Code of the Russian Federation, or an employee who has children.
An employee who has received written notification from the tax authority at his place of residence can apply for the right to a property or social deduction. After the employee provides this document to the accountant, deductions can be used to reduce income subject to personal income tax.
To correctly calculate the tax, the following mathematical formula is used: Tax = (Total income - Deductions) * rate.
The regular tax rate provided by law is thirteen percent. There are also a number of special interest rates for different subjects of tax relations. So, for example, if non-resident foreign citizens work in an organization, then a rate of thirty percent will be applied to calculate the tax on their income.
A clear example of how personal income tax is calculated and transferred .
In February two thousand and fifteen, the manager of the company Intersport Kalashnikov V.V. a salary equal to ninety-five thousand rubles was accrued. He informed the employer in writing that he was the father of two children: 6 and 14 years old and attached their birth certificates. Based on the documents provided to Kalashnikov V.V. a standard tax deduction was provided for the first child in the amount of 1,400 rubles, and for the second child in the amount of one thousand four hundred rubles.
The tax calculation will look like this:
- When calculating personal income tax, income will be taxed at a rate of thirteen percent.
- Taxable income will be: 95,000 rubles. – 1400 rubles -1400 rubles = 92200 rubles.
- The total tax to be withheld and transferred to the budget will be: 92,200 rubles * 13% = 11,986 rubles.
Payment will be made at the time of payment of the balance of wages for February two thousand and fifteen.
Can a bank transfer information to the tax office?
Yes, but only at the request of the tax authority. If the inspector becomes suspicious, he will request a statement of movements on your account. In this case, the bank has no right to inquire why the information is needed. The financial institution is obliged to provide data within 3 days, otherwise it faces a fine. Regular receipts and withdrawals of large amounts, large transfers from electronic wallets, and transactions with a limit of over 600,000 rubles may seem suspicious to the tax authorities.
Income data may also come from other sources. For example, you rent out housing to noisy tenants, and the neighbors decided to fight for silence by any means and complained to the tax office.
Tax deductions
The Tax Code specifies the following types of deductions :
- Deductions with standard wording.
- Social deductions.
- Property deductions.
- Professional.
Standard tax deductions can be of the following types:
- A deduction for the taxpayer himself, which is provided to certain categories of individuals. Such as participants in the liquidation of the Chernobyl nuclear power plant, disabled children, families of fallen military personnel. The entire list of these persons can be found by reading Article two hundred and eighteen of the Tax Code of the Russian Federation.
- A deduction for a child (children) of a taxpayer, which can be provided until his total annual income exceeds two hundred eighty thousand rubles. If there are no more than two children, the deduction will be one thousand four hundred rubles, for the third and each subsequent one it will be three thousand and rubles, respectively. If the family has a disabled child under 18 years of age, the deduction will also amount to three thousand rubles.
To receive the standard child tax credit, you need the following:
- A taxpayer with children must apply for a deduction at the place of source before the move.
- Provide a copy of the child's birth certificate. From the month of filing the application, the taxpayer’s tax base will be reduced by the corresponding amount of the standard deduction until his total annual income exceeds the amount of 280,000 rubles.
Social tax deductions have five types, depending on the type of expenditure:
- Charity events and performances.
- Obtaining higher professional education.
- Carrying out expensive operations for medical reasons.
- Voluntary participation in pension programs.
- Replenishment of a savings pension account.
Tax resident status
Income is divided depending on the sources of its receipt in order to determine whether an individual has taxable income depending on his status - tax resident or non-resident of the Russian Federation. According to the general rule, personal income tax is paid by individuals who stay in the Russian Federation for at least 183 calendar days within 12 consecutive months.
Healthy
About personal income tax on payments by an organization for the education of its employees’ children
In 2021, a special rule was also applied, according to which a tax resident was recognized as an individual who was in the country from 90 to 182 calendar days from 01/01/2020 to 12/31/2021, and also filed before 04/30/2021 with the Federal Tax Service at the place of residence, stay or registration registration of the corresponding application, which indicates the last name, first name, patronymic and TIN.
In other cases, the recipient of the income has the status of a non-resident of the Russian Federation, regardless of his citizenship. The final status of an individual – tax resident or non-resident – is determined at the end of each calendar year.
In other cases, the recipient of income, including from the provision of services, is considered a non-resident of the Russian Federation. In this case, a person’s citizenship does not matter. And the final status of an individual as a resident or non-resident for personal income tax purposes is determined at the end of each calendar year.
Property tax deduction and its provision procedure
The property tax deduction and its procedure for providing it are reflected in Article two hundred and twenty of the Tax Code of the Russian Federation.
An individual who is a personal income tax payer who has carried out the following transactions with property has the right to take advantage of this deduction:
- Selling your own home or plot of land.
- Acquisition of a home, apartment or land plot.
- Construction of a residential building.
- Measures to purchase personal property from the taxpayer for government needs.
Professional tax deductions can be provided to personal income tax payers in respect of the following income:
- Received by persons conducting individual activities.
- Monetary rewards for privately practicing notaries, lawyers with personal law offices and other persons with private practice.
- Receipts in cash equivalent for performing work under civil contractual obligations.
- Rewards for authors for the creation and execution of unique works, income for inventors and authors of brilliant innovations.
The following payments are excluded from their income subject to personal income tax:
- Cash income that was received by a citizen during inheritance activities.
- Amounts of accrued financial assistance that do not exceed four thousand rubles per billing year.
- Other cash receipts in favor of individuals.
Thus, we can conclude that personal income tax is a mandatory tax burden borne by working citizens. It is thanks to this tax that the federal budget is replenished.
What about gifts?
It all depends on who gave you the gift:
- Legal entity or individual entrepreneur. The annual limit on gifts for one private person is 4,000 rubles. If this amount is exceeded, personal income tax must be paid on the difference. This is done by the accounting department of a company or individual entrepreneur.
- Relatives. Any gifts are not subject to taxes - even if we are talking about a country house, a large sum of money or a share in an LLC.
- Other private individuals. Donated apartments, cars, shares or shares of companies are subject to personal income tax. There is no need to pay tax on money transfers, regardless of who the donor is.
Monetary gifts do not need to be declared - be it a transfer from a company, a wedding gift, or financial assistance from parents. The same rule applies to debts that are returned to you on the card. In this case, we are not talking about profit, but about receiving our own funds.
