The Federal Tax Service has clarified the new rules for calculating and paying VAT from next year for the simplified taxation system

The Federal Tax Service has clarified the new rules for the calculation and payment of VAT from next year for the simplified taxation system.

From 2025, amendments concerning the procedure for calculating and paying VAT will come into force, significantly changing the usual tax accounting procedure for many people.
The key change is the introduction of a threshold of annual income, above which payers of the simplified taxation system are obliged to switch to VAT. All companies and entrepreneurs using the simplified taxation system are obliged to switch to VAT if their annual income at the end of 2024 exceeds 60 million rubles.
In this regard, the Federal Tax Service of Russia has already prepared a draft order which provides for a new form and procedure for completing a VAT declaration. The draft order is available on the Federal portal of draft laws and regulations: https://regulation.gov.ru/Regulation/Npa/PublicView?npaID=151088.

Also, according to Vedomosti, on 10.10.2024 the tax authorities issued draft methodological recommendations to make the transition to VAT as smooth and understandable as possible.
The methodological recommendations, consisting of 25 points, were developed after a working meeting of the central office of the Federal Tax Service with entrepreneurs and contain answers to the most worrying businessmen and common questions in connection with the upcoming changes. The document is designed to minimize the risks of errors and ensure correct taxation in the new conditions.
In particular, the recommendations may be emphasized:

VAT exemption for small businesses

All companies and sole proprietorships applying the simplified taxation system are recognized as VAT payers, but those whose annual income does not exceed 60 million roubles are exempt from paying VAT. This exemption is granted automatically and does not require the submission of a notification or declaration. Exception: VAT payers acting as tax agents are required to file VAT returns even if their income does not exceed 60 million rubles.

Method of determining income

The cash method is used to determine annual income. This means that income is recognized at the time of receipt of cash on the account of the organization or entrepreneur and is accounted for only in the period in which it was received. It is important to note that the same rule applies to expenses. If the main expenditure of a company or sole proprietor is distributed unevenly throughout the year, this may affect their status as a VAT payer.

Right to choose % rate

Taxpayers have the right to independently determine on what terms to pay tax: 5% for income from 60 to 250 million rubles; 7% in the range from 250 to 450 million rubles, but without the right to deduct input VAT; general rates - 20% or 10%, but with the possibility of deduction. The Federal Tax Service also reminded taxpayers of the right to choose the VAT rate.

According to the amendments to the Tax Code, companies can independently determine on what terms to calculate and pay the tax: to use special rates of 5% (can be applied in the range of income from 60 million to 250 million rubles) or 7% (from 250 million to 450 million rubles), but without the right to deduct “input” VAT, or general rates of 20% or 10% on standard terms, with the possibility of deductions.

The rate chosen by the taxpayer is simply indicated in invoices, primary documents and reporting declarations. No special notification to the tax authorities is required.

Moment of transition to VAT

The taxpayer must independently monitor the income figures for the previous and current year. If there is an excess (more than 60 million rubles), then there is an obligation to pay VAT. But if at the end of 2025 the figures are below the threshold, then from 2026 the taxpayer is again exempt from VAT.

VAT benefits remain

Having become a VAT payer, organizations and sole proprietors on the simplified taxation system are entitled to all the benefits specified in Article 146 and Article 149 of the Tax Code of the Russian Federation. For example, catering services are not subject to VAT within the framework of the current experiment on zero VAT.

The text of the developed methodological recommendations on the application of VAT for UST taxpayers will be published in October 2024. It is important to note that this draft is subject to public discussion and possible changes before final approval.

Nevertheless, it is already important for entrepreneurs to conduct a thorough analysis of their financial activities and familiarize themselves with the new rules. Timely preparation and professional advice will help minimize risks and ensure a smooth transition to the new taxation regime.

https://www.vedomosti.ru/economics/articles/2024/10/10/1067728-fns-razyasnila-novie-pravila-ischisleniya-i-uplati-nds

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