Self Employed Act Since 2019 – Activities and Taxation

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According to changes in legislation, a professional income tax (IPA) is introduced in Russia. From January 1, 2019, its effect will extend to the self-employed population – individuals who do not have official work and who offer their own services or personally made goods for sale. The new law will allow such citizens to legalize their income and avoid penalties for illegal enrichment.

Pilot project

The legal basis of fiscal deductions for self-employed persons is considered in Federal Law No. 422-ФЗ “On the experiment to establish a special tax regime” dated 11/27/2018. This regulatory document entered into force on January 1, 2019 and is valid for a period until December 31, 2028. The Law on Self-Employed Citizens introduces NAPs in 4 regions of Russia:

  • Moscow;
  • Moscow region;
  • Tatarstan
  • Kaluga region.

Taxation of self-employed citizens


By law, incomes of citizens must be taxed. For officially employed persons, these contributions are the responsibility of the employer. Self-employed people do not have such an opportunity – they are not formalized anywhere and do not seek to advertise their income in order not to pay personal income tax. This is due to two factors:

  • a large amount of the tax itself (13% of the salary);
  • the lack of state control over the earnings of such individuals.

Under the new conditions, tax structures will more closely monitor citizens’ financial income, including through monitoring bank accounts.

In this situation, people with unofficial incomes are better off legalizing them by paying a tax on self-employed citizens, whose rate is lower than personal income tax. Part of individual entrepreneurs whose activities fall under the new law may also go to the NAP.

There is currently no wording of self-employment in legislation. This category of labor relations can be defined as the personal provision of services by an employee or his sale of goods of his own production. For example, it can be home-made garments. Self-employed persons include representatives of the following professions:

  1. Private hairdressers, stylists, massage therapists.
  2. Freelancers.
  3. Webmasters and Designers.
  4. Repairmen of household equipment and electronics.
  5. Taxi drivers.
  6. Landlord.

Foreigners doing business in our country can use the new tax if they are citizens of the states of the Eurasian Economic Union (EAEU).

In addition to Russia, it includes:

  • Belarus;
  • Armenia;
  • Kazakhstan;
  • Kyrgyzstan.

Allowed Activities

Who can’t switch to the NAP

According to the law, the tax regime for the self-employed does not apply to income from the following types of work:

  • sales of excisable products (alcoholic beverages, cigarettes, gasoline, etc.);
  • mining and / or processing of minerals;
  • entrepreneurship involving hired workers;
  • activities in the interests of a third party under an agency contract, etc .;
  • resale of goods (with the exception of items used for personal use);
  • profitable activities of over 2.4 million rubles per year.

Object of taxation

According to article 6 of Law No. 422-FZ:

  • NAP applies to income from the sale of goods (works, services, property rights);
  • the monetary expression of this profit is the tax base for calculating the fiscal payment.

Income Limitations

The legislation provides for situations when a new special regime cannot be applied and a citizen needs to pay personal income tax. This includes income received:

  • the amount of more than 2.4 million rubles per year;
  • under an employment contract;
  • state and municipal employees (this does not include the situation of rental housing);
  • when selling real estate or transport;
  • from the sale of shares and other securities;
  • in kind;
  • persons working in certain professions with tax benefits for self-employed citizens are nannies, tutors, lawyers, notaries (in 2019 they are exempt from tax).

A man reads the tax code of the Russian Federation

Tax rates

Under the law, only two types of rates are provided for calculating fiscal payments for professional activities:

  • in the case of the sale of goods (services, etc.) to individuals – 4%;
  • when selling / rendering services to legal entities or individual entrepreneurs (for doing business) – 6%.

A self-employed person must clearly distinguish between the categories of buyers of his goods and / or services (individuals or legal entities).

An attempt to reduce the amount of payments can lead to penalties from the tax service.

Regardless of tax rate:

  • 1.5% of the tax amount will go to the Mandatory Health Insurance Fund.
  • No deductions are made for the FIU. At the same time, according to the Decree of the Government of the Russian Federation No. 160 “On Amending the Rules for calculating and confirming the insurance period” of 02.19.2019, self-employed citizens paying NAPs are considered insured in the pension system. They will accumulate seniority for retirement, but PKK will not form.

Calculation formula

According to the law, self-employed citizens must deduct monthly income tax for professional activities. The size of this contribution is calculated according to the formula NAP = (4BN x 4%) + (6BN x 6%) – HB, where:

  • 4BN – tax base for a 4% tax rate;
  • 6BN – The amount of income for the 6% accrual of NAPs
  • HB – tax deduction.

The taxpayer needs to know that the size of the fiscal payment is automatically calculated by the FTS on the basis of the data submitted by him.

For control, a self-employed person can independently determine the value of the NPD payable using the proposed formula.

If a citizen does not agree with the amount of tax that was calculated for him, he needs to contact the Federal Tax Service – the calculation will be done again.

Tax rate for self-employed

Tax deduction

For its calculation, the formula HB = (4NS x 1%) + (6NS x 2%) is used. For example, a self-employed citizen for a month earned 120,000 p., Of which 80,000 p. – This is the sale of goods to individuals, and 40 000 p. – legal. In this case:

  • HB will be (80 000 p. X 1%) + (40 000 p. X 2%) = 1 600 p.
  • The total amount of the contribution will be (80,000 p. X 4%) + (40,000 p. X 6%) – 1,600 p. = 4 000 r.

A feature of the tax deduction is the one-time provision of it and the amount of not more than 10,000 rubles.

Having exhausted this amount, the citizen will no longer be able to take advantage of such a benefit, even if he is deducted from the tax account as a self-employed person, and after some time he will be re-registered.

Payment Procedure

The reporting period for the NAP is the month. The step-by-step algorithm for the payment of PND has the following steps:

  1. The self-employed person transfers to the tax inspectorate information on the profit received per month – separately on the amounts from individuals and organizations. For this, a special program for smartphones “My tax” is used – it will provide interaction with fiscal authorities.
  2. Based on the information provided, the tax office calculates the amount payable and informs the taxpayer about it by the 12th day of the next month.. If this value is less than 100 p., Then it is carried over to the next tax period..
  3. The self-employed person must transfer this amount in a two-week period using the mobile application. In case of delay, interest will be charged on unpaid money. If the payment is not made within 10 days, a warning is sent to the payer, where the current amount of the penalty is given and the possibility of penalties is indicated..

Declaration, pen and smartphone

Registration of self-employed citizens

The following steps are required:

  1. Install the program “My tax” on the smartphone and open it.
  2. Enter your phone number in the special field. Click the submit button. In response, you should receive an SMS code that must be entered to confirm the number and continue registration.
  3. Choose a region of business from 4 possible. It does not have to coincide with the place of registration of the taxpayer, for example, you can live in Tula and provide services in Moscow.
  4. If a citizen has a password to enter his personal account on the website of the Federal Tax Service, use it for verification when sending data. This option is available for both Russian citizens and representatives of other states that are members of the EAEU.
  5. If there is no login information, you need to send a passport and selfie photo of the taxpayer using the My Tax program. After checking the files by the employees of the Federal Tax Service, the payer will be provided with a login and password to enter. This registration option is available only to Russian citizens..
  6. Click the submit button. The submitted application will be reviewed within 3 days. If the decision is positive, the applicant will be registered with the tax office with the status of a self-employed person. If for some reason the NAP cannot be applied to his activities (for example, this citizen is engaged in cigarette trading), then he will be refused with an explanation.

Mobile application “My tax”

This program is designed for the interaction of an individual applying the NAP and the tax office. To start using it, you need to download a file from the Internet for installation. Depending on the operating system of the smartphone, you need to go to the Google Play or App Store network services.

The application was developed as a mass information product, so it has a simple and intuitive interface.

If you have questions, the easiest way is to contact the FTS hotline by calling 8-800-222-22-22 (the call is free).

Taxpayer application on smartphone

Check for buyers and customers

Each receipt of money for goods or services is issued in the form of an electronic check and does not require a cash register. To create a document, you must:

  1. In the application “My tax” select the operation “New sale”.
  2. Fill in the fields in the opened form, indicating in them the amount received from the buyer, the name of the service, the date of sale. By clicking one of the buttons below, select a client category – individual or legal entity. At the end, the “Issue a check” key is pressed..
  3. The generated document will be displayed on the smartphone screen. It will contain the last name, first name, patronymic of the seller, check number, date of issue, name of service and amount paid. By pressing the “Send to Buyer” button, the client will receive the document in an SMS message or e-mail. Another copy of the check will go to the tax office to calculate the amount of fiscal deduction.
  4. If during the execution of the payment document inaccuracies were made or subsequently it was necessary to return the money to the buyer, then you can click on the “Cancel Check” button. In this case, it will be saved in the mobile application, but the program will mark the invalidity of the document, and the tax authorities will not take into account the amount when calculating the tax.

Opt-out mode

Withdrawal of an individual from the NAP regime may occur:

  • At the initiative of the taxpayer. Having withdrawn from tax accounting, an individual subsequently can again register as a self-employed citizen and continue to pay a 4 or 6 percent tax rate.
  • At the initiative of the Federal Security Service. The reason will be violations committed by the taxpayer, for example, non-compliance of his activities with Law No. 422-FZ. In this case, the termination of the relationship may be accompanied by penalties..

The tax deduction algorithm contains the following steps:

  1. Preparation of an application using the My Tax mobile application. It is required to fill in the necessary fields in the form on the screen, indicating the date of deregistration, etc..
  2. Sending the finished application to the tax. To do this, click the “Submit” button.
  3. Consideration of the submitted application. It takes up to 3 days.
  4. Obtaining confirmation of tax deduction. The date of termination of the NAP regime is the day of application.
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