How many times an organisation can change its tax system

The taxation system is determined at the stage of registration of the organisation. Basically, as well as according to the general rules, if no special tax regime is chosen, the main taxation regime is applied. Thus, in accordance with the legislation: the taxation system can be changed in the future.

The issue of changing the taxation system becomes relevant in two key situations:

– in order to legally optimise tax payments;

– to guarantee compliance with legislative requirements.

Changing the taxation regime to reduce the tax burden is usually initiated voluntarily. While compliance with legal requirements may cause a forced change of tax regime.

Voluntary change of taxation system – it is possible to change not more than once per calendar year. Each tax regime is regulated by specific provisions of the Tax Code of the Russian Federation.

Exceptions are the patent system of taxation and tax on professional income, which can be switched to at any time.

To switch to another tax regime, the following points should be heeded:

– payment of current taxes under the regime used;

– submission of reports under the current regime;

– compliance with the criteria of the new regime at the time of transition and during the subsequent application;

– timely submission of applications for cancellation of the old regime and transition to the new one.

In case of non-compliance with the requirements of the applied tax system, the organisation should forcibly abandon it and obligatory notify the tax service. 

Nevertheless, the decision to change the tax regime should not be perceived as a factor of increased tax risk, provided that this transition is done correctly, in compliance with all requirements.

It is also important to mention that irrational financial management, in particular, repeatedly approaching the limit values of indicators defined by the Tax Code of the Russian Federation for special tax regimes, is a real criterion of increased tax risks.