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  • The Simplified Taxation System
    It is one of the most widespread taxation systems among entrepreneurs-beginners. It is accessible and advantageous as you will pay only one tax of STS instead of three general taxes. The Tax should be remitted to the state once a quarter and the accounts should be filed only once a year.

    While choosing the Simplified Taxation System, you should indicate one of the two subjects of taxation (from which you will pay a tax).

    * Income – established tax rate of 6%,

    * Income minus expenses – the tax rate is from 5 to 15% depending on the region, type of activity and the amount of the revenue earned from this type of activity.

    More than this: if you choose the STS of 6% of income, you can decrease the amount of tax by insurance premiums. IE without employees can decrease the tax by 100%, if the amount of insurance premiums allows it, and companies and IE with employees can decrease the tax by not more than 50%.

    What is more profitable: "Income” or "Income minus expenses”?

    Define approximate expected income, the amount of expenses and the possibility of confirmation of expenses with primary documents (checks, delivery notes, travel orders, etc.).

    * To use the Simplified Taxation System "Income” 6% is more profitable if you have a low volume of expenses – less than 60% of income, or expenses are difficult to vouch with documents. It is a good variant for consulting services or, for example, for lending properties.

    * To use the Simplified Taxation System "Income minus expenses” is more profitable if: the volume of expenses if high – more than 70-80% of income, the expenses can easily be vouched for the tax authorities, the expenses are planned to be regular, if there was established a preferential rate for your type of activity in the region (in most regions you are required to have the income from it not less than 70-80% of the total income). While trading it is more profitable to use "Income minus expenses” system.

    How to change to the Simplified Taxation System?

    To choose this taxation system you need to file a notification to the tax authorities within 30 days after registration or up to December, 31 to use the Simplified Taxation System from the beginning of the subsequent year. For some companies there are restrictions for STS appliance: closed types of activities, the annual income exceeds 64 million, there were opened branches and representative offices, the registered capital consists of a deposit of another company for more than 25%.
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