It should be noted that it is proposed to supplement the Tax Code with a separate chapter, including tax rates and sales limits for independent entrepreneurs. The Ministry of Economy proposes to introduce a single tax for them with a rate of 12% of the taxable amount if it does not exceed the value of the maximum volume of supplies requiring registration as a VAT payer.
The flat tax will include a 4% tax on business income and 8% social insurance contributions. It will be distributed between the state budget and the local budget at the place of residence of the taxpayer declared in the Notification on the commencement of activities in the proportion of 3/1.
As single tax payers, independent entrepreneurs will not be obliged to keep accounting records, as well as to submit tax returns, applications and reports to the state authorities. But at the same time they will have to use modern devices for recording cash payments – mobile applications combining the functions of a POS terminal and cash register equipment.
Freelancers will be able to provide services and engage in professions from the Classifier of Activities, which will be contained in lists approved by the government. The lists will be periodically revised based on the results of monitoring and dialog with the business community.
The list may include both representatives of the service sector – tutors, nannies, translators, accountants, auditors, and creative professions – singers, performers, etc. It is proposed to allow freelancers in 34 areas and for 68 names of different professions.
An independent entrepreneur will not have the right to engage third parties to participate in the provision of services, as well as the right to deduct business expenses. But he will be able to work without restrictions in one or more spheres or professions at the same time, with exceptions expressly provided for by law. And will be entitled to provide services to both individuals and legal entities.
Legal entities will be able to use their services up to 30% of the value of their labor costs. In this context, experts warn about the risks of using the new regime as a loophole for tax optimization. In their opinion, this may lead to the fact that the employer will want to transfer as many employees as possible to this form of activity.
