Sales tax

From the "Law on the DPR Tax System"

Chapter 16. Sales tax

Article 106. Taxpayers

106.1. Legal entities and individual entrepreneurs classified in accordance with Article 15 of this Law, subject to the general taxation system.

106.2. The following are not payers of turnover tax:

a) financial institutions carrying out currency exchange operations in accordance with the procedure established by law;

b) payers of agricultural tax;

c) non-profit organizations, institutions, enterprises - in terms of income received, specified in Article 78 of this Law;

d) simplified tax payers;

e) business entities engaged in mining and processing of coal and coal products;

f) business entities operating exclusively in the field of waste management of ferrous and non-ferrous metals;

g) business entities that, in accordance with the procedure established by law, have received the status of a payment agent (subagent), an operator for accepting payments, carrying out economic activities in the territory of the Donetsk People's Republic to accept payments from individuals using payment terminals;

h) enterprises that receive funds for work performed exclusively from the republican and/or local budgets of the Donetsk People’s Republic in accordance with the functional classification of budget expenditures 150120 “Construction and development of the metro network.”

106.3. Payment of turnover tax does not exempt a payer who is on the general taxation system from paying taxes established by this Law, including income tax.

Article 107. Object of taxation

107.1. The object of taxation is revenue - turnover, prepayments, advances received by a business entity in the reporting period.

Article 108. Tax base

108.1. The tax base is the value expression of the taxable object specified in Article 107 of this Law.

108.2. The tax base of the reporting period is reduced by the taxpayer by:

108.2.1. the amount of money returned to the buyer (customer), if such a return occurs on the basis of a letter (application) from the buyer (customer) for the return of money (in the case of non-cash payment), or in the presence of a check/payment receipt for payment for the returned goods ( in case of settlements in cash), as well as the return of erroneously paid funds;

108.2.2. the amount of goods (products, works, services) returned by the buyer, provided that such goods were included in the object of taxation of the previous reporting period (previous reporting periods). The return of goods must be confirmed by relevant documents.

Article 109. Tax rates

109.1. Payers pay turnover tax in the amount of 2 1.5% percent of the taxable item specified in Article 107 of this Law.

(subclause 109.1 amended according to the Law “On Amendments to the DPR Law on the Tax System dated December 25, 2015 7. No. 99-INS “On the tax system” dated January 29, 2016)

Article 110. Reporting period. Payment procedure and terms

110.1. The reporting period is a calendar month.

110.2. Taxpayers submit a declaration monthly no later than the 20th day of the month following the reporting month.

110.3. The reporting form is developed and approved by the Ministry of Revenue and Duties of the Donetsk People's Republic.

110.4. Payment of turnover tax is made monthly within 10 calendar days from the date of the established reporting deadline.

Article 111. Procedure and features of calculation of turnover tax

111.1. The date of occurrence of the taxable object in the reporting period is:

111.1.1. the date of crediting funds to the bank account of the taxpayer or receipt of funds in his cash desk from the buyer (customer), as payment for goods, works, services to be supplied.

111.1.2. the date of shipment of goods, and for works, services - the date of execution of the document, which indicates the fact of delivery of works, services by the taxpayer.

111.1.3. the date of sale of goods, which is noted in the report of the commission agent (agent), in the case of the sale of goods under a commission agreement (agency agreement).

111.2. The date of occurrence of the taxable object is calculated using the cash method at their choice:

111.2.1. housing and communal enterprises of state or municipal ownership, enterprises of urban auto, electric transport, road maintenance (road maintenance), green management (improvement), outdoor lighting of state or municipal ownership;

Of course, in the Law “On the Tax System” of the DPR there are articles that indicate that the taxpayer has the right to choose a simplified or patent taxation system immediately upon registration. However, in reality it turns out differently - you receive the certificate at the Ministry of Doha itself, and the application for the application of a different taxation system must be submitted to your inspector at the district inspectorate. At the same time, it is unlikely that you will receive a certificate on the same day that it is registered, that is, you will not be able to submit an application on the same day as the registration date.

All this leads to the fact that at least 1 month you will have to report according to the general system.

So what does “general system” mean?

The DPR Law “On the Tax System” does not provide a specific definition. This is rather a general concept that requires the taxpayer to pay two taxes:

— income tax;

- sales tax.

Income tax R is calculated at a rate of 20% of the difference between the gross income of the reporting period (calendar month) minus expenses that can be included in the gross expenses of the reporting period.

The Ministry of Revenue and Duties of the DPR recommends a tax burden of at least 1% of gross income (the tax burden is the ratio of income tax to gross income). That is, if you declare 10,000 rubles. gross income, then the tax is less than 100 rubles. will definitely attract increased attention from tax authorities.

Being on the general taxation system, business entities operating exclusively in the field of handling ferrous and non-ferrous metal waste are exempt from income tax.

Turnover tax is calculated at a rate of 1.5% of the entire turnover of the enterprise - the amount of advances received and invoices/acts issued.

The following are exempt from turnover tax on the general system:

— financial institutions carrying out currency exchange operations in accordance with the procedure established by law;

— agricultural tax payers;

— business entities engaged in mining and processing of coal and coal products;

— business entities operating exclusively in the field of waste management of ferrous and non-ferrous metals;

— business entities that, in accordance with the procedure established by law, have received the status of a payment agent (subagent), operator for accepting payments, carrying out business activities in the territory of the DPR to accept payments from individuals using payment terminals;

- enterprises that receive funds for work performed exclusively from the republican and/or local budgets of the DPR in accordance with the functional classification of budget expenditures 150120 “Construction and development of the metro network.”

You must report on both taxes every month - until the 20th day (inclusive) of the month following the reporting month.

In what cases is there no choice and, by law, it is possible to carry out activities only on the general system?

You will not find such a list in the Law “On the Tax System” of the DPR. But if you analyze and compare all 3 taxation systems with all restrictions, you get 2 main conditions:

— annual gross income is over 60 million rubles;

— the number of employees is more than 10 people.

Moreover, even if the above conditions are met, there is no escape from the general system if you carry out the following types of activities:

— trade in fuels and lubricants;

— trade in alcoholic beverages and tobacco products;

— production and trade of pharmaceutical products;

- currency exchange;

— enterprise management activities;

— provision of financial and insurance services;

— activities in the field of public catering, with some exceptions;

— issuance of payment documents, payment cards, etc.;

— engineering and other services related to the preparation of technical specifications, project proposals, scientific research, etc.;

— acceptance of payments from individuals using payment terminals by payment acceptance operators.

If we consider it as a whole, the general taxation system is still more typical for legal entities than for individual entrepreneurs.

Individual entrepreneurs are most often registered to provide any services or to trade in markets and do not require a large number of employees. And this fits perfectly into the conditions for obtaining a patent or a simplified system.

Member of the National Assembly of the DPR of the “Free Donbass” faction, deputy chairman of the National Assembly Committee on Budget, Finance and Economic Policy, spoke about the pros and cons of the general system.

PROS AND CONS

The undoubted advantage of the general system is the ability to regulate the tax burden with expenses.

If your expenses exceeded your income in one month, you can declare just enough of them to reach a 1% load. The remaining ones can be shown in other reporting periods when expenses are not enough.

The disadvantage is the need to constantly monitor and track expenses - which of them can be included in the declaration, and which have already been taken into account in previous periods.

Disadvantages also include the need to additionally report sales tax. The tax base for income tax and turnover tax has some differences, so you will also have to pay close attention to this in order to avoid possible fines for mistakes made.

In real conditions, it is necessary to take into account all the features of a particular business entity. And only you can determine which taxation system is right for your company.

Read also:

Tagged

Post navigation

Copying materials from the site is permitted with a link to the source

• 18 Sep "19

  30 18 Sep "19

• 156 18 Sep "19

For what and how much do its residents pay the unrecognized republic?

“Does the DPR have its own tax system?” - One of the interlocutors asked the author of these lines with sincere surprise when they learned that we were working on an article on this topic. Yes, the unrecognized DPR has its own tax system, and for quite some time. The first version of the DPR Law “On the Tax System” was adopted in December 2015, and since then has gone through more than 10 major revisions.

TIMER journalists tried to figure out what taxes and how they are paid by individuals and legal entities of the unrecognized republic, and how the DPR tax system differs from the one that exists in Ukraine.

Two whales

The tax system of Ukraine is based on three “pillars”: corporate income tax, personal income tax (NDFL), and value added tax (VAT). The DPR has two of these three taxes: income tax and personal income tax.

Most Ukrainian enterprises pay income tax at a rate of 18%, although there are exceptions: for example, insurance activities are taxed at a rate of 3%. In the DPR there is a higher rate: 20%; a preferential rate of 0% is provided for enterprises in the coal mining industry.

Another important difference is the reporting period. In Ukraine, income tax is paid by most enterprises once a quarter. In the DPR, the reporting period is set at one month. That is, the reporting that Ukrainian enterprises prepare and submit once every three months, the DPR is forced to prepare monthly - a fair amount of hemorrhoids for accountants.

The second problem is the differences between accounting and tax accounting, i.e. what is included in income and expenses from the point of view of the enterprise, and what the tax authorities “recognize” in this sense. In Ukraine, in recent years, they have tried to minimize the differences between tax and accounting, allowing almost all types of expenses to be deducted from income when calculating taxable profit, with the exception of exceptions separately listed in the Tax Code - “tax differences”. In the DPR, the opposite system operates: the Law “On Taxation” provides for a very specific list of expenses that can be considered in this capacity when calculating the amount of taxable profit. Everything else is not considered a tax expense.

On the one hand, such a system is much less progressive and much more bureaucratic than the one that operates in Ukraine. On the other hand, practically no one in Ukraine has paid real income tax for a long time: perhaps the DPR decided to “tighten the screws” so as not to end up in the same situation.

The same motives can explain other nuances of income tax administration in the DPR. For example, when selling goods and services at a price below cost, the seller must include the difference between cost and the stated selling price in income. Obviously, this measure is intended to close one of the most common tax evasion schemes, but in fact it looks very strange from the outside.

The approach to enterprises that have suffered a loss in one period or another is also worthy of attention: they are officially prohibited from redistributing this loss to subsequent periods, thereby reducing the tax base, and declaring losses six times during the year gives the tax authorities the right to come to the enterprise with an extraordinary inspection.

The idea of ​​banning the transfer of losses from one period to another is the golden dream of Ukrainian fiscals throughout the years of independence. It was implemented unofficially - through a ban on submitting “negative” declarations, officially – through a ban on transferring losses in full (it was allowed to “use” losses only in several parts over a number of years), and more than once they tried to push through a rule on a complete ban on transferring losses between periods . The dreams of Ukrainian tax officials in the DPR have become a reality, and this openly repressive fiscal practice can only be justified by the emergency state of the DPR economy.

The rate of the second key tax - on personal income, or personal income tax - in the DPR is significantly lower than in Ukraine: 13% instead of 18% for most types of income.

But in the DPR the rate of the single social contribution, which is paid from the wages of hired workers, is higher: it is 31% versus 22%; a reduced rate of 28% is provided for budgetary organizations. Thus, the total burden on wages in the DPR is 44% (13% personal income tax + 31% unified social tax) versus 40% in Ukraine (18% personal income tax + 22% unified social tax).

Passive income (interest, dividends, etc.) both in the DPR and Ukraine are taxed at a rate of 5%.

In general, when comparing taxation in Ukraine and the DPR for these two types of taxes, it should be recognized: the corresponding Ukrainian legislation is more mature and modern, while the legislation of the DPR is characterized by a more bureaucratic nature, and in addition, it seems quite difficult to implement .

VAT VS Sales Tax

A key role in the tax system of Ukraine is also played by the value added tax - the infamous VAT. This is an indirect tax, i.e. a tax that is included in the price of the product - it is considered that it is paid by the buyer. As the name suggests, this tax is levied on added value - that is, the difference between the price at which a product or service is sold and the amount of costs for its provision. The tax rate in Ukraine today is 20% (7% for medicines and medical equipment).

The process of collecting this tax can be generally illustrated using the following example. The mining enterprise sells resources to the manufacturer for 100 hryvnia. These 100 hryvnia include VAT of 20% of this amount - i.e. 20 hryvnia. This money is added to the sale price: the buyer pays it extra to the seller, who is obliged to transfer it to the budget (“price including VAT”). This is what is called: tax liability. And from the point of view of the buyer-manufacturer, these 20 hryvnia are a tax credit - that is, the state, as it were, “remembers” that he has already paid these same 20 hryvnia VAT.

The manufacturer produces a product from the purchased resources, which it sells to the distributor for 150 hryvnia. VAT in this case will be 30 hryvnia, respectively, the buyer-distributor must pay the seller-manufacturer 180 hryvnia, of which he must pay 30 hryvnia to the budget. However, the manufacturer has a tax credit of 20 hryvnia, i.e. he pays only 10 to the budget. And 30 hryvnia becomes a tax credit for the distributor.

Finally, the distributor sells the product to the end consumer for 300 hryvnia, to which 20% is added, or 60 hryvnia VAT. At the expense of these 60 hryvnia, the distributor resets his tax credit of 30 hryvnia, and the remainder, i.e. another 30 hryvnia, he gives to the state.

Ultimately, from the entire chain of transactions, the state will receive the same 60 hryvnia that the final buyer paid. This is why VAT is called a consumption tax.

However, this is simply only in this specific example. In fact, when calculating VAT, there are a lot of subtleties and nuances, which makes it one of the most difficult to administer and extensive methods of tax evasion, corruption and fraud.

So, the DPR does not have all these subtleties. Instead of 20% value added tax, they charge 1.5% sales tax. It is considered much simpler: 1.5% of the cost of the goods, which is paid by each seller at each stage of the chain. In our case, first 1.5% of 100 hryvnia must be paid to the budget, then 1.5% of 150 hryvnia, etc. The total payment amount will be 7 hryvnia 25 kopecks - instead of 60 hryvnia under the Ukrainian system.

However, there are only 3 elements in our chain. But imagine if there are, say, 20 such steps? In the case of VAT, this does not matter: the same amount will be paid to the budget as the final buyer pays. But with a sales tax, each step in the chain means another 1.5% tax payment - and a corresponding increase in the price of the product.

On the other hand, the undeniable advantage of the sales tax is its relative simplicity; in addition, it is convenient and not burdensome in the case of short production chains, at each stage of which significant added value is created. It is also beneficial to large vertically integrated companies, in which both production and distribution are carried out by different divisions of the same company. But it is unprofitable for resellers of various kinds.

Simplified taxation system

As you know, in Ukraine there are three groups of “simplified people”. The first group is business entities that carry out retail trade in markets, do not use hired labor and whose income does not exceed 300 thousand hryvnia per year. These entrepreneurs pay a single tax with a fixed rate of 160 hryvnia per month, and in addition a single social contribution of 352 hryvnia monthly.

The second group of Single Tax payers are entrepreneurs who sell goods and provide services to individuals, have no more than 10 employees and an annual income of no more than 1.5 million hryvnia. They also have a single rate of 640 hryvnia - plus a single social contribution of 704 hryvnia

The third group of payers can work with legal entities, and also have an unlimited number of employees, but the income of such enterprises cannot exceed 5 million hryvnia per year. Representatives of the third group pay the state 5% of revenue, as well as a single social contribution of 704 hryvnia.

Finally, the fourth group of “simplers” are agricultural enterprises that pay depending on the area of ​​land they cultivate.

The system that exists in the DPR is both similar and not similar to the Ukrainian one at the same time.

For those who in Ukraine would belong to the first and partially second group of Single Tax payers, in the unrecognized DPR there is the so-called. patent system. It works simply: by paying a certain fixed amount, the entrepreneur gets rid of paying all other taxes in principle.

Entrepreneurs who sell goods in markets, as well as outside them, can choose a patent taxation system - but only for a certain list of goods (baked goods, vegetables and fruits, ice cream, soft drinks, flowers, children's toys, etc.). In addition, those who provide services to the population (truck transportation, hairdressing services, tutoring, repair of clothing, shoes and household appliances) can switch to the patent system.

The income limit for entrepreneurs who have chosen the patent system cannot exceed 1 million rubles per year, or about half a million hryvnia - that is, more than for the first group of payers in Ukraine, but less than for the second. In addition, “patent holders” can attract hired workers (for certain types of activities, as a rule, no more than three people).

The cost of a patent also depends on the type of activity, but for most of them it is 510 rubles (about 250 hryvnia) per month.

What follows is the simplified taxation system itself in the form in which it is implemented in the DPR. There are also groups of payers here - only three, not four, as in Ukraine. It is important to note that the DPR legislation imposes far fewer restrictions on “simplified” people than the Ukrainian legislation: for example, all groups of payers can work with legal entities.

The first group is entrepreneurs who have no more than 1.5 million rubles (about 750 thousand hryvnia) annual income and no more than 10 employees. They are exempt from paying income tax and sales tax, and instead pay a flat tax of 2.5% of the actual cash receipts (from the “cash”).

The second group has no restrictions on the number of hired workers, and its income is limited to 60 million rubles per month - i.e. almost 30 million hryvnia (for comparison, the most flexible group of the simplified system in Ukraine provides for a maximum income of 5 million hryvnia). Payers of the second group of “simplified” people in the DPR pay the state 6% of cash receipts (for comparison, the 3rd group of the Unified Tax in Ukraine pays 5%).

True, there are some restrictions: only producers of goods, works and services, importers, as well as those who sell goods and services to individuals for their personal needs (not for resale or other use within the framework of business activities) can switch to the second group of the simplified system. For example, various resellers - wholesale trading centers, etc. - cannot use this system.

The simplified system is also not suitable for those who sell alcohol and tobacco products, fuel, provide insurance and financial services, etc. A separate clause prohibits a simplified system for enterprises in the catering sector - cafes, restaurants and others.

Entrepreneurs of the first and second groups of single tax payers also pay a social contribution in the amount of 600 rubles, i.e. about 300 hryvnia per month. For comparison, in Ukraine, entrepreneurs of the first group pay 352 hryvnia ESC per month, the second and third - 704 hryvnia.

The third group of single tax payers are structures engaged in the extraction and processing of coal with an annual income of up to 240 million rubles. For such enterprises, the single tax rate is 3% of turnover - it seems that this norm was introduced specifically in order to sell small coal mines - artels, or so-called. "kopanki".

In general, the simplified taxation system in the DPR seems to be much more flexible and convenient than the one existing in Ukraine.

The size of the payment depended on the size of the company’s turnover; the volume of final sales was not taken into account, so payers did not have time to adapt to the dynamics of demand in the market.

“Tax holidays” in the USSR were provided to enterprises of local and regional subordination that manufactured products exclusively from local raw materials. The replacement of the turnover tax with a modern VAT occurred in 1992, at the time of the adoption of Law No. 2118-1, which established new principles of taxation in the Russian Federation.

Features of calculation of turnover tax

Technically, the turnover tax is an indirect universal excise tax, the basis for which is the final volume of production at the enterprise. Most developed economies (for example, Estonia) apply a turnover tax, the economic meaning of which is equivalent to the Russian VAT.

The amount of turnover tax that needs to be paid (or returned) is calculated as the difference between the accrued and included fees (taxes on imported goods and services provided by non-residents). The final payment volume is adjusted to the amount of tax-exempt turnover. For example, in Kazakhstan, the sale of excise stamps, lottery tickets and services in the field of international transportation are exempt from tax.

• Turnover tax can be calculated as the difference between wholesale and retail prices of goods (excluding discounts) or at a set rate per unit of product (for example, a kilogram of building mixture, a cubic meter of wood). The third method is the calculation of percentages of total turnover; it is used in the case of unestablished wholesale prices for goods.
• Objects of taxation include transactions for the sale of finished products, the supply of raw materials, supplies and goods to other countries (for business purposes), as well as personal consumption, internal turnover of the state, imported goods (services).
• Subjects paying turnover tax are registered enterprises (legal entities), counterparties (recipients of incoming invoices indicating the amount of tax), buyers of foreign goods and services (not for personal use).
• Turnover tax is calculated monthly, taking into account the time of sales - the moment of receipt of payment, shipment of products, the fact of provision of services to the company's client. Accrual is carried out taking into account the earliest event. For example, payment for kitchen furniture was received three days before shipment - sales tax is paid within a month from the first date.

Disadvantages of turnover tax

The turnover tax in the Russian Federation was transformed into VAT due to a number of features.

• High tax burden on small businesses - turnover tax was levied on the last link in the supply chain. This role was played by small enterprises (trading houses, shops).
• Low turnover tax rates (up to 10%) are most effective, otherwise businesses are forced to introduce “gray” schemes and hide profits from the state.
• “Cascade” principle of tax calculation - deductions are made from each transaction, therefore, with a long supply chain (characteristic of the Russian economy), intermediation becomes unprofitable.

After all stages of registration actions have been completed, you become a full-fledged business entity. When you receive a certificate of state registration, you are by default on the general taxation system.

What is the general tax system? What is its peculiarity? What advantages and disadvantages does this system have?

The DPR Law “On the Tax System” is silent on the exact definition of this concept. However, based on the features inherent in this particular system, we can come to the conclusion that this is a taxation system in which payers pay two taxes, including income tax and turnover tax.

Income tax calculated at a rate of 20% of the difference between the gross income of the reporting period (calendar month) minus expenses that can be included in the gross expenses of the reporting period.

Sales tax calculated at a rate of 1.5% of the entire turnover of the enterprise - the amount of advances received and invoices/acts issued. This tax is paid in addition to income tax, and not instead of it.

As for reporting on income tax and turnover tax, declarations are submitted by the 20th day of the month following the reporting month. The tax itself is paid within 10 days after the deadline for filing the declaration.

The following business entities are exempt from turnover tax:

• Agricultural tax payers;
• Enterprises that receive funds for work performed exclusively from the republican and/or local budgets of the DPR in accordance with the functional classification of budget expenditures 150120 “Construction and development of the metro network”;
• Financial institutions carrying out currency exchange operations in accordance with the procedure established by law;
• Business entities operating exclusively in the field of waste management of ferrous and non-ferrous metals;
• Business entities engaged in mining and processing of coal and coal products.

The DPR Law “On the Tax System” does not provide a list of activities that can only be carried out under the general taxation system. However, taking into account all the limitations of the 3 taxation systems, we can come to the conclusion that the general system is inevitable in 2 main cases:

The annual gross income is over 60 million rubles;

There are more than 10 employees.

Also, you will not be able to escape the general taxation system if you plan to engage in the following types of activities:

• Currency exchange;
• Enterprise management activities;
• Providing financial and insurance services;
• Trade of fuels and lubricants;
• Production and trade of pharmaceutical products;
• Trade in alcoholic beverages and tobacco products;
• Activities in the field of public catering;
• Issue of payment documents;
• Acceptance of payments from individuals using payment terminals by payment acceptance operators;
• Engineering and other services related to the preparation of technical specifications, project proposals, scientific research, etc.

The advantage of a general taxation system is the ability to regulate the tax burden with expenses. The disadvantages of this system are:

• The need to constantly monitor and track expenses;
• The need to additionally report sales tax.

Each tax system has certain unique features and limitations, and, taking into account the specifics of your enterprise, only you can determine which system is right for you.