Transitional tax regime for SMEs

LEGAL DIGEST, NEWS \ 23.07.2020

The State Duma in the third reading passed a bill on the transitional tax regime for small and medium-sized business entities that have lost the right to apply the simplified taxation system (referred to below as STS). The essence of this period is that starting from January 1, 2021, SMEs will retain the right to apply the simplified taxation system, but they will have to pay a unified tax at increased rates:

• 20% – for the object of taxation “income-expenses”;
• 8% – for the object of taxation “income”.

The system will apply in respect of the SMEs whose figures at the end of the tax period are as follows:

• amount of revenue will be of 150,000,000 – 200,000,000 rubles;
• average number of employees will be from 100 to 130 people.

If at the end of the tax period:

– amount of expenses exceeds the amount of income, then for this tax period, the taxation base is assumed to be zero.

– amount of income exceeds 200,000,000 rubles and the average number of employees exceeds 130 people, then such a company loses the right to apply the STS from the quarter in which the specified exceedings have happened.

This regime will allow companies to apply the STS and not to restore tax accounting and tax liabilities from the beginning of the reporting (tax) period in which the specified exceeding occurred.

Please be reminded that, according to the requirements of tax legislation, companies may switch to the STS on a voluntary basis while meeting a number of restrictions:

• amount of revenue for the reporting period is not more than 150,000,000 rubles;
• depreciated book value of fixed assets is not more than 150,000,000 rubles;
• average number of employees is not more than 100 people;
• type of activity is not listed in clause 3 of article 346.12 of the Tax Code of the Russian Federation;
• participation share of other organizations in your company is not more than 25%;
• absence of branches. At the same time, it is allowed to have other separate subdivisions.

To switch to the STS, organizations should submit a relevant notification to the tax inspectorate by December 31 of the current year. Companies will be able to apply the STS starting next year.

Document: Draft Federal law dated December 31, 2019 No. 875580-7