How is the tax reduction under the simplified tax system

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Tax reduction of the simplified tax system (STS) is an option available for entrepreneurs and organizations on simplified taxation. There are two options for taxation: “income minus expenses” 15% – determination of the tax base, taking into account the costs incurred; “income” 6% – the taxable base is the entire proceeds without taking into account the costs incurred.

A tax reduction of the simplified tax system is possible only with the “income” option.

To reduce the calculated amount of tax, the following payments are deducted, which actually took place in the same reporting period: sales tax; mandatory contributions to pension, medical and social insurance for maternity, paid from accruals to employees and individual entrepreneurs for themselves in the absence of employees; hospital benefits paid by the employer, except for accidents, injuries at work, VMI payments.

How to reduce the STS tax by the amount of insurance premiums for organizations and individual entrepreneurs with employees?

When calculating the advance payment and tax, it is necessary to consider:

payment of debt to funds, can be taken to reduce tax; insurance premiums that were made during the reporting period; the overpayment is not taken into account, the deduction is only in the amount of the accrued contributions; the amounts of insurance payments that were accrued only during the operation of the simplified tax system are used.

Thus, the advance payment formula will include a reduction in the STS tax on insurance premiums:

USN tax = Income × Rate – Amount of deductions – paid advances for the reporting period.

The law provides for a limit on the amount to be deducted. For LLC on the simplified tax system and individual entrepreneurs with employees, it is 50%. That is, a reduction in the STS tax “income” of an individual entrepreneur with employees in this case can be made on contributions made that do not exceed half the amount of the calculated tax.

How to reduce the tax on the simplified “income” of 6 percent without employees?

The tax reduction of the simplified tax system “income” of an individual entrepreneur without employees makes only from himself in a fixed minimum amount in full, subject to the transfers of insurance premiums already made for OPS and OMS by the entrepreneur for himself – 43,211 rubles. for 2022 (40,874 rubles for 2020 and 2021, 36,238 rubles for 2019, 32,385 rubles for 2018); for OPS for oneself in the amount of 1% of income – more than 300,000 rubles.

How is the reduced tax reflected in the tax return?

For the expenses allowed by law to be deducted from the tax to be considered, they should be indicated in the simplification declaration in the calculation section for the “income” object.

Is it possible to reduce the minimum USN tax on insurance premiums?

If a company or entrepreneur is on a special regime of 15%, then the simplifier is obliged to record the data of its commercial activities in the income and expense book. If the expenses turn out to be significant and the tax is less than 1% of the total income for the entire reporting period, then the tax amount should be paid based on the minimum tax rule – 1% of all revenue, even if the result of the activity was a loss.

It is useful for companies using simplified taxation to be aware of the possibility of reducing the STS “income” tax and the rules for its application to receive more profit at the end of the period.