To register an individual entrepreneur or to become officially self-employed, you must be a legally capable adult citizen. In the case of FDHs, the age can be lowered to 14 years if there are guarantees from parents or guardians.
Self-employed persons can register through the free application “My Tax”, from which data is automatically transferred to the Federal Tax Service. To register an individual entrepreneur, you can fill out a form on the website of the Federal Tax Service, personally contact the tax authority or MFC. It is allowed to submit documents by another person under a notarized power of attorney.
Application for registration to the tax office for sole proprietors can be submitted only at the place of residence registration, and for self-employed – at the place of residence. It is clear that the latter option is more convenient.
An individual entrepreneur pays an annual insurance premium to the pension fund (32,000 rubles) and turnover tax. The state reserves the right to choose the system of taxation for individual entrepreneurs (general, simplified, single tax on imputed income). Thus, under the simplified system the tax is 6% of the turnover, and under the UTII – 7.5-15%.
There is no final clarity on the tax for self-employed people. Presumably, a one-time advance payment (patent) will be introduced, the amount of which will differ depending on the region. So far we are talking about the amount of 20,000 rubles a year.
In addition, the self-employed will pay 4% of the amount received from an individual and 6% – from legal entities and private entrepreneurs. Deductions will be made once a month, no later than the 25th day of the month. At the same time, control over the volume of income is not expected. The tax will be paid from the amount specified by the self-employed person in his personal cabinet.
As the form of registration as a self-employed person was originally intended to be as simple and accessible as possible, it does not require the filing of declarations.
Individual entrepreneurs have to fill out declarations and submit them to the tax authorities. It is also important to make contributions to the pension fund and health insurance on its own. Now there are services that are ready to take on the above mentioned. For example, the bank Tochka offers to take over the filling in and filing of declarations.
Self-employed persons do not need to open a current account. You can use your existing account for settlements or do without it at all.
An individual entrepreneur needs to have a current account. It is necessary for sending and receiving payments, transferring salaries to employees and for currency transactions.
The account can be opened at any time after registration at any bank you like. The bank “Tochka” has a tariff with free service and the ability to choose which bank to serve on the balance sheet. Tinkoff Bank offers 2-6 free months and the following monthly payment of 490 rubles.
The established income limit for self-employed persons is RUB 2.4 million per year. But there are some unclear points in this matter. For example, it is not clear how the limit will be exceeded.
The maximum income of individual entrepreneurs depends on the taxation system chosen. The lowest level on the patent system is 60 million rubles a year. For comparison, on the simplified system the income can reach up to 150 million rubles per year,
A self-employed person cannot hire employees because it would be contrary to one of his or her characteristics to carry out the work exclusively on his or her own, without the help of personnel. This is a significant limitation, as a single person has a small resource to expand their activities.
On the other hand, FE can become an employer and enter into employment contracts. To do this, you need to register with the pension fund as an employer. The maximum number of employees depends on the chosen taxation system. If a patent is chosen as a form of taxation, it is possible to hire no more than five people.
Activities for the self-employed are not yet fully prescribed. They now include 45 points and each region is expected to be able to add its own. To date, three of them (tutoring, cleaning and caring for children, the sick, the disabled) have special conditions and are exempt from taxes.
Individual entrepreneurs can choose almost any type of activity. However, there are restrictions. FE cannot carry out security activities, manufacture medicines, special equipment for the army and alcoholic beverages. It is also prohibited for individual entrepreneurs to provide insurance services and establish credit and financial institutions.
Penalties and liability
As the registration of self-employed persons is still a pilot project, no fines are foreseen here in 2019. In the future, it is planned to take a fine for a cheque or a cheque issued with violations. The first time the amount of the fine will be 20% of the hidden amount, the second time – the entire amount.
At one time, there was talk of collecting fines for attempting to conceal income. But so far, the FSN does not plan to control the income of the self-employed.
Individual entrepreneurs are responsible for late submission of reports, late payment of tax, doing business without a license.
The amount of fines may reach 200,000 rubles. If an individual entrepreneur hires employees, he or she is subject to the Labour Code, which also stipulates his or her own fines. In addition, personal property is also subject to liability.
You can close the power supply yourself. In general, the procedure is not complicated, but requires payment of all taxes and fees, dismissal of employees, filing of declarations, withdrawal from the account and closing of the current account. If you wish, you can entrust this work to a third party company.
With the liquidation of the self-employed person’s status, there is no certainty yet. But given the absence of employees and the need to file an income tax return, the process should be simpler than that of an individual entrepreneur.
Self-employed persons are an experiment that has not yet received clearly defined conditions. Already now we can say that the tax here is one of the lowest in Russia, and the conditions are as loyal as possible. However, the status of a self-employed person significantly limits the opportunities for business expansion. Therefore, in spite of its attractiveness, it is in many cases inferior to an individual entrepreneur.