IP stands for "individual entrepreneur". According to the legislation of the Russian Federation, an individual entrepreneur is individual registered in the manner prescribed by law and carrying out entrepreneurial activities without education legal entity.
Entrepreneurial activity is considered to be an activity aimed at the systematic extraction of profit. Thus, based on the meaning of the definition, we can say that IP cannot be opened for two.
An individual entrepreneur is an individual, that is, one person, and not a legal entity, not a team. What do two people who want to do business together do?
In Russia, there is an idea that it is easier and more profitable to register and operate as an individual entrepreneur than to create a legal entity. However, this is not quite true. We will assume that “registering an IP for two” implies joint business. In this case, there are several options for its design. Let's consider them sequentially.
Option 1. Register one of the participants as an individual entrepreneur
In this case state registration only one natural person will pass as an individual entrepreneur. At the same time, the second person can informally invest money, participate in business management.
This is what many entrepreneurs do, believing that in this case it will be possible to save significantly on taxes, maintaining accounting, application cash register equipment, availability of a bank account, etc. Whether such savings will really be profitable depends on many indicators - activity entrepreneurial activity, its types and other moments.
More important issues, in terms of two-person participation in the business, are not petty savings and ease of registration, but guarantees of security and financial responsibility of the participants. In the case of registration of one individual entrepreneur, the participant who is officially registered has all the rights to the business, and in the event of a quarrel or the need for separation, problems may arise. By law, the second participant does not have any rights to a share in the business and it will not be possible to prove his participation in it.
As practice shows, this way of doing business is chosen by relatives or close friends who trust each other and are not afraid that one of them will deceive a companion. However, everything happens in life, close relatives also quarrel.
How to protect yourself in this case? The only option may be a loan agreement between partners, as individuals. That is, the contribution of an unregistered participant is confirmed documented as a loan to a registered participant.
Receipts must be kept. This will help to return the money in case the relationship deteriorates. But even such loan agreements and receipts will not be able to fully compensate for the costs of organizing business activities incurred by an unregistered participant. It should also be remembered that a business participant registered as an individual entrepreneur also bears certain risks that will not affect an unregistered participant.
For example, if the business turns out to be unprofitable, the individual entrepreneur will pay debts within ALL of your property, which will take into account real estate, car, etc. Such risks will not affect the one who participated in the business unofficially. Thus, the described way of doing business for two can be risky and unprofitable for both parties, both a registered participant and an unofficial one.
Option 2. Both participants are registered as individual entrepreneurs and conclude a simple partnership agreement with each other
A prerequisite is that both parties are individual entrepreneurs or commercial organizations. In the case of the formation of a partnership, both individual entrepreneurs determine the amount of the contribution to the common cause, including property, business reputation, professional skills and knowledge, etc. can be taken into account. The material assessment of the contribution of each participant is determined by agreement of the parties.
What are the benefits of such a combination:
- Both individual entrepreneurs are full participants in the joint business
- In case of termination of joint activities, each individual entrepreneur can act independently
- Profit from common affairs is distributed in proportion to the contribution
However, there is also minuses. Each individual entrepreneur will be required to keep separate records for independent activities and for activities within the partnership. Reporting is also carried out in two areas of activity. Without going into the details of accounting and taxation, we note that such business management can create certain difficulties, especially for inexperienced entrepreneurs who are not yet familiar with all the intricacies of tax reporting.
Option 3. Formation of an LLC
In many cases, registering an LLC will be the best option for running a joint business.
Firstly, only LLCs have the right to carry out certain types of activities (for example, the sale of alcohol).
Secondly, the registration of an LLC allows you to register in the constituent documents the share of each founder in the authorized capital and the distribution of profits between them, which means that it will protect each participant from a legal point of view.
Thirdly, LLC members are responsible under the obligations of the company only within the share in the authorized capital. The procedure for registering an LLC is somewhat more complicated than registering an individual entrepreneur and includes the mandatory preparation constituent documents and the decision to establish an LLC, it is also necessary to open a current account and make a seal. However, for participants in a joint business, such an organizational and legal form is still more attractive and safer.
Opening an LLC will not be much more expensive than registering an IP. And in an LLC, you can save on paying taxes, on a bank account, and at the same time get a safer and more solid organization.
Doing business as a sole trader is beneficial only if the entrepreneur is truly "individual", that is, operates independently at his own peril and risk.
As a conclusion
If it is supposed to conduct a business together, then it is necessary to initially correctly draw up and register it in the manner prescribed by law. This may require a little more physical investment, but it will protect each participant in the event of an unforeseen situation, such as a quarrel, a crisis, or a desire to close the case.
The business options described above each one is good in its own way. A detailed description of the pros and cons of an IP partnership or LLC is not the topic of this article, but this information should also be studied before deciding to organize your own business. In the case of an honest and fair initial organization of the business, it will be easier and more peaceful for each of its participants to work.
Many individual entrepreneurs, developing their activities, think about cooperation with other individual entrepreneurs. However, this form of business is special control states as one of the ways to avoid taxes using individual entrepreneurial activity. In this connection, the IP has understandable concerns and related questions.
Reader Questions
“I work as an IP. I plan to carry out activities to provide services in cooperation with other individual entrepreneurs using the simplified tax system.
The legislation gives us the right to organize our partnerships with the help of:
agreements on joint activities (a simple partnership without the formation of a legal entity);
an ordinary civil law cooperation agreement (which is of more interest, since partners may change depending on the type of order).
In both cases, one of the partners can represent the interests of other partners and conclude an agreement with the customer on its own behalf, with the condition that other specialists - individual entrepreneurs - can be involved in the execution of the order.
The need for cooperation may arise when:
the order is voluminous, it cannot be completed alone;
the order cannot be divided into separate parts for each specialist;
order requires the involvement of specialists of different profiles.
In addition, there may be such a moment as the disinterest of one of the partners in the fact that his customer enters into an agreement with the second partner directly. Or the customer himself does not want to conclude several contracts with different specialists, it is more convenient for him to work with one who will find other contractors, conclude contracts with them for the provision of certain services and pay them for the work himself.
In this regard, the question may arise about the taxation of two individual entrepreneurs working under the simplified tax system. Wouldn't it turn out that the main executor, who speaks to the customer on behalf of all co-executors, will have to pay tax on the entire amount received on his current account from the customer, even if he transfers part of the amount to partners? And co-executors, in turn, will without fail re-pay tax on the amount received by them. At the same time, the total amount of taxes will be much more than provided for by the simplified tax system.
On civil law contracts between individual entrepreneurs
The legislation does not directly prohibit this form of cooperation between individual entrepreneurs, but law enforcement practice and official explanations suggest that if an individual entrepreneur enters into a civil law contract with another individual entrepreneur, then they are considered as individuals involved in entrepreneurial activities who are not family members and close relatives. And this is a violation of the Decree of June 18, 2005 No. 285 "On certain measures to regulate entrepreneurial activity."
Recall that, according to paragraph 2 of this decree, to engage in entrepreneurial activities as an individual entrepreneur, a citizen has the right to attract no more than three individuals for labor and (or) civil law contracts, including those concluded with legal entities. And from January 1, 2008, an individual entrepreneur can carry out activities only with the involvement of family members and close relatives (husband (wife), parents, children, adoptive parents, adopted (adopted), siblings, grandfather, grandmother, grandchildren). Entrepreneurial activity in violation of these conditions is prohibited.
There is also an information letter from the Ministry of Justice, the Ministry of Taxes and the Ministry of Economy dated January 18, 2008 (published in IP, 2008, No. 4, p. 1 of the insert). In it, on the basis of the definition of entrepreneurial activity from Article 1 of the Civil Code (“independent activities of legal entities and individuals carried out by them in civil circulation on their own behalf, at their own risk and under their property responsibility and aimed at systematically making a profit from the use of property, selling things, produced, processed or purchased by the specified persons for sale, as well as from the performance of work or the provision of services, if these works or services are intended for sale to other persons and are not used for their own consumption”), the impossibility of cooperation between the IP is justified if it is a question of cooperation in a profitable economic activity(in our case - for the provision of services). It is indicated that "the defining feature of the involvement of individuals by an individual entrepreneur to engage in entrepreneurial activities is the participation of such persons directly in activities that ensure the receipt of profit by an individual entrepreneur."
From the further text of the letter, it can be seen that under the individuals of the ministry they mean not only just citizens (employees), but also individual entrepreneurs (this position is consistent with paragraph 1 of Article 19 of the Tax Code, according to which individual entrepreneurs are recognized as individuals).
The letter states that contracts can be concluded between individual entrepreneurs only in cases where individual entrepreneurs want to provide or receive related services, and a list of such services is provided:
provision of services for product certification, as well as state hygienic registration;
provision of services for the maintenance of cash registers;
provision of services for loading, unloading, transportation and transport expedition;
leasing shopping facilities;
provision of banking services;
provision of services for statistical declaration of goods;
provision of customs agent services;
provision of cleaning services, maintenance (public utilities) and (or) protection of trade facilities;
provision of audit and legal services;
provision of accounting and reporting services.
And in the last paragraph of the letter, the emphasis is once again placed on the fact that the activities of persons fulfilling the conditions of the relevant agreements should not be aimed at the direct receipt by an individual entrepreneur of income from the type of activity he carries out.
To be honest, the definition of entrepreneurial activity from article 1 of the Civil Code does not say anything about employees, especially about civil law contracts between individual entrepreneurs, which would allow us to conclude that it is prohibited to involve individuals in the activities of individual entrepreneurs. The characteristic “independent activity” refers to the status of a business entity, since the entity may still have “non-independent” representative offices, branches and other structural divisions.
However, although the letter is not normative document, but the unanimous position of the three ministries indicates which way the law enforcement practice is going. And it is such that any contract (except those listed in information letter) between individual entrepreneurs will be considered as an agreement with an individual, and even not a relative.
This approach to cooperation between individual entrepreneurs under civil law contracts is most likely dictated by the desire of the state to close a loophole for those who intend to avoid restrictions on the number of employees and reduce the amount of taxes deducted.
About agreements on joint activities of individual entrepreneurs
Not so long ago, such a form of cooperation between individual entrepreneurs as an agreement on joint activities, or a simple partnership without the formation of a legal entity (Article 911 of the Civil Code), did not raise questions from the regulatory authorities. Individual entrepreneurs could unite in simple partnerships, but according to Article 13 of the Tax Code, simple partnerships (participants in a joint activity agreement) were already recognized as organizations and paid taxes on this activity provided for legal entities. And not in all situations such joint activities turned out to be economically feasible for individual entrepreneurs. Moreover, according to subparagraph 5.1.4 of Article 286 “ General terms application of the simplified system” TC simple partnerships are not entitled to apply the simplified tax system (the same rule is provided for in subparagraph 2.1 of the Regulations on the simplified taxation system, approved by Decree No. 119 of 09.03.2007).
However, now, it seems, agreements on joint activities of individual entrepreneurs have also been banned. As a specialist of the Ministry of Taxation informed us, now such agreements are also considered as involvement of non-relative individuals in entrepreneurial activities. Such an explanation is contained in a letter from the Presidential Administration, with which the tax authorities are familiarized (we could not find the text of the letter itself).
What is the result?
1. In the form in which our reader plans his partnership activities - by means of two individual entrepreneurs under a civil law contract or a joint activity agreement using the simplified tax system, it is impossible and illegal.
2. Individual entrepreneurs can apply the simplified tax system and conclude separate contracts with the customer for the provision of services on behalf of each of the partners.
3. Before concluding any kind of agreement among themselves, we recommend that individual entrepreneurs first apply with a request whether it is subject to a ban under Decree No. 285, to the Ministry of Taxes, the Ministry of Economics or the Ministry of Justice.
4. If you still cannot do without combining the efforts of an individual entrepreneur, you can think about registering a legal entity.
Igor RAPTUNOVICH, certified lawyer
A simple partnership (joint activity) is created to combine the efforts and property of commercial organizations and / or individual entrepreneurs (IP) to achieve a specific goal.
These goals can be:
- income generation,
- cost optimization,
- tax optimization.
One of good points of a joint activity agreement is the simplicity of its execution - the parties to the agreement do not create a new legal entity and, accordingly, there is no need to perform registration actions and go through many formalities.
In accordance with paragraph 1 of Article 1041 of the Civil Code of the Russian Federation, under a simple partnership agreement (agreement on joint activities), two or more persons (partners) undertake to combine their contributions and act jointly without formation of a legal entity:
- to make a profit,
- or the achievement of another purpose not contrary to the law.
When carrying out joint activities, special attention must be paid to drawing up an agreement, since it depends on its conditions, including:
- assessment of deposits,
- the procedure for the distribution of income received,
- the procedure for covering expenses and losses,
- decision-making process,
- and so on.
- individual entrepreneurs(IP)
- and/or commercial organizations.
The article will discuss the features tax accounting income and expenses associated with the implementation of business operations within the framework of joint activities.
Contributions of participants to joint activities
The contribution of a comrade is recognized as everything that he contributes to the common cause, including:- money and other property
- professional and other knowledge, skills and abilities,
- business reputation and business connections.
- equal by cost.
In accordance with subparagraph 4, paragraph 3, article 39 of the Tax Code of the Russian Federation, for the purposes of tax accounting, the transfer of property is not recognized as the sale of goods, works or services if such transfer is investment character, in particular:
- contributions to the authorized (share) capital of economic companies and partnerships,
- contributions under a simple partnership agreement (agreement on joint activities),
- contributions under an investment partnership agreement,
- share contributions to mutual funds of cooperatives.
In accordance with paragraph 1 of paragraph 2 of Article 146 of the Tax Code of the Russian Federation, the operations specified in paragraph 3 of Article 39 of the Tax Code of the Russian Federation are not recognized as an object of VAT taxation.
According to subparagraph 1 of paragraph 3 of article 170 of the Tax Code of the Russian Federation, the amounts of VAT accepted for deduction by the taxpayer on goods (work, services), including fixed assets and intangible assets, property rights in the manner prescribed by this chapter, are subject to restoration by the taxpayer in cases of transfer:
- property,
- property rights
- business companies and partnerships,
- contribution under an investment partnership agreement,
- or share contributions to share funds of cooperatives,
- as well as the transfer of real estate to replenish the target capital non-profit organization in the manner prescribed by Federal Law No. 275-FZ of December 30, 2006 “On the Procedure for the Formation and Use of Target Capital of Non-Commercial Organizations”.
- property,
- property rights,
Thus, the norms of the Tax Code of the Russian Federation do not install for a taxpayer who has entered into a simple partnership agreement, the obligations for VAT recovery, previously presented for deduction, when making contributions to a joint activity.
A similar position is held by the Supreme Arbitration Court of the Russian Federation and representatives of the Federal Tax Service.
So, in accordance with the provisions of the Letter of the Federal Tax Service of the Russian Federation dated 12.08.2011 No. №CA-4-7/ [email protected]"On the direction of the review of decisions of the Presidium of the Supreme Arbitration Court of the Russian Federation on tax disputes":
“Clause 5 of the Code does not establish for a taxpayer who has entered into a joint activity agreement (simple partnership agreement) the obligation to restore the tax previously presented for deduction upon the acquisition of unfinished real estate objects in connection with the subsequent transfer of these objects as a contribution under a partnership agreement.
The provisions of Articles 39 and 146 of the Code are inapplicable to the situation under consideration in terms of resolving the issue of the existence of an obligation to restore value added tax and the provisions of Articles 39 and 146 of the Code, since the circle of persons who are entrusted with the obligation to restore a tax previously declared deductible is established by Article 170 of the Code and is not subject to broad interpretation .
The fact that, according to paragraph 3 of Article 39 of the Code, contributions under a simple partnership agreement are not recognized as sales, only indicates that such a transfer does not form an object of value added tax. At the same time, operations carried out under a simple partnership agreement are recognized as an object of value added tax in accordance with Chapter 21 of the Code, and the calculation and payment of this tax, including the application of tax deductions, is carried out by a participant in the partnership in the manner prescribed by Article 174.1 of the Code.
This conclusion is formulated in the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of June 22, 2010 No. 2196/10.
Contributions of associates for income tax purposes.
In accordance with paragraph 1 of article 278 of the Tax Code of the Russian Federation, for the purposes of income tax not recognized as an implementation goods (works, services) transfer by taxpayers of property, including property rights, as contributions of participants in simple partnerships.
According to clause 3 of article 270 of the Tax Code of the Russian Federation, when determining the tax base, expenses in the form of:
- contributions to the authorized (share) capital,
- contribution to a simple partnership,
- contribution to an investment partnership.
Common property of partners. Property tax
In accordance with Article 1044 of the Civil Code of the Russian Federation, the following are recognized as common shared property of partners *:- property contributed by comrades (belonging to them by right of ownership),
- products produced as a result of joint activities,
- the fruits and incomes derived from such activities.
The property contributed by the comrades, which they possessed on grounds other than the right of ownership, is used in the interests of all the comrades and constitutes, along with the property in their common ownership, common property comrades.
In accordance with paragraph 1 of article 377 of the Tax Code of the Russian Federation,
The tax base under a simple partnership agreement (agreement on joint activities) is determined by:
- based on the residual value of the property recognized as an object of taxation, contributed by the taxpayer under a simple partnership agreement,
- and also on the basis of the residual value of other property recognized as an object of taxation, acquired, created in the course of joint activities, constituting the common property of partners, accounted for on a separate balance sheet of a partnership by a participant in a partnership agreement conducting common business.
With regard to property acquired, created in the course of joint activities, the calculation and payment of tax are made by the participants in the partnership agreement proportionately the value of their contribution to the common cause.
A person who keeps records of the common property of partners, obliged inform no later than the 20th of the month following the reporting period*, to each taxpayer that is a party to a simple partnership agreement:
- information on the residual value of the property constituting the common property of the partners on the 1st day of each month of the relevant reporting period and on the share of each participant in the common property of the partners.
*In accordance with paragraph 2 of Article 379 of the Tax Code of the Russian Federation, reporting periods for property tax are:
- first quarter,
- semester,
- nine month
In the event that one of the participants in the simple partnership agreement has a property tax benefit, then this benefit applies only to this participant (Letter of the Ministry of Finance of September 16, 2004 No. 03-06-01-04 / 33).
VAT on transactions under a joint venture agreement
According to subparagraph 1 of paragraph 1 of article 146 of the Tax Code of the Russian Federation, the following are recognized as the object of VAT taxation:- sale of goods (works, services) on the territory of the Russian Federation, including the sale of collateral,
- transfer of goods (results of work performed, provision of services) under an agreement on the provision of compensation or innovation,
- transfer of property rights.
- transfer of ownership of goods,
- performance of work,
- provision of services,
Features of the calculation and payment to the budget of VAT when carrying out operations in accordance with a simple partnership agreement (agreement on joint activities), an investment partnership agreement, are regulated by the provisions of Article 174.1 of the Tax Code of the Russian Federation.
According to paragraph 1 of Article 174.1 of the Tax Code of the Russian Federation, 1. for the purposes of Chapter 21, the general accounting of transactions subject to VAT in accordance with Article 146 of the Tax Code of the Russian Federation is assigned to the participant of the partnership, which is a Russian organization or individual entrepreneur.
When performing operations in accordance with a simple partnership agreement (agreement on joint activities), an investment partnership agreement, a participant in the partnership is charged taxpayer's obligations* established by Chapter 21 of the Tax Code of the Russian Federation.
*Taxpayers, not being VAT payers (for example, those applying the simplified taxation system) must perform the duties of a VAT payer when performing operations in accordance with a joint activity agreement. In accordance with paragraph 2 of article 346 of the Tax Code of the Russian Federation, organizations using the simplified tax system are not recognized as VAT taxpayers, with the exception of VAT paid in accordance with Article 174.1 of the Tax Code of the Russian Federation.
Profit tax when carrying out the activities of a simple partnership
As mentioned above, the conclusion of a joint activity agreement does not lead to the formation of a legal entity.Accordingly, the obligation to pay income tax is borne by each partner independently in proportion to his share in the common property of the partnership.
This is due to the provisions of 19 of the Tax Code of the Russian Federation, according to which taxpayers and payers of fees are organizations and individuals who, in accordance with the Tax Code of the Russian Federation, are obliged to pay taxes and (or) fees, respectively.
Also, according to Article 249 of the Tax Code of the Russian Federation, each participant in shared ownership is obliged, in proportion to his share, to participate in the payment of taxes, fees and other payments on common property, as well as in the costs of maintaining and preserving it.
To determine the financial result from joint activities - the amount of profit (loss) received, it is necessary to organize the maintenance of tax accounting for the income and expenses of the partnership.
The received profit is subject to distribution among the participants of the joint activity (before taxation).
The procedure and methodology for tax accounting must be developed and fixed in the accounting policy for tax purposes.
In accordance with the provisions of Article 1046 of the Tax Code of the Russian Federation, the procedure for covering expenses and losses associated with the joint activities of partners is determined by their agreement. In the absence of such an agreement, each partner shall bear the costs and losses in proportion to the value of his contribution to the common cause.
Moreover, an agreement that completely exempts any of the comrades from participating in covering common expenses or losses is void.
In the case when the expenses of partners relate both to joint activities and to activities carried out outside the framework of a simple partnership, such expenses can be partially taken into account in the expenses of the partnership for tax accounting purposes.
Such clarifications were given by the Ministry of Finance in its Letter dated 05.28.2013 No. No. 03-03-06/2/19346:
“Thus, if any expenses of the comrades are simultaneously:
- as to the activities of a simple partnership,
- and to independent activity outside the simple partnership agreement,
Accounting for income and expenses from joint activities for the purposes of tax accounting for income tax must be carried out in accordance with the provisions of Chapter 25 of the Tax Code, even if organizations applying special tax regimes participate in the joint activity agreement.
The Ministry of Finance gave such explanations more than once in its Letters. Including, in a letter dated May 30, 2012. No. 03-11-06/2/73:
“In accordance with paragraph 1 of Art. 346.15 and paragraph 9 of Art. 250 of the Code, organizations applying the simplified taxation system, when determining the object of taxation, non-operating income received in the form of income distributed in favor of the taxpayer when he participates in a simple partnership, is taken into account in the manner prescribed by Art. 278 of the Code.
In this regard, when merging organizations into a simple partnership, including organizations applying the simplified taxation system, accounting for common property, obligations and business operations of a simple partnership should be carried out in the manner prescribed for taxpayers applying general tax regime.»
In addition, in the same Letter (dated May 30, 2012 No. 03-11-06 / 2/73), the department indicates that if a company applies the simplified tax system with the object of taxation "income" and at the same time concludes an agreement on joint activities, then it loses the right to apply the USN:
“In accordance with paragraph 3 of Article 346.14 of the Code, taxpayers who are parties to a simple partnership agreement (agreement on joint activities) or an agreement on trust management of property are required to apply income reduced by the amount of expenses as an object of taxation.
Taking into account the above, in the event that a taxpayer applying the simplified taxation system with the object of taxation in the form of income became a participant in a joint activity agreement during the tax period, then he, on the basis of the provisions of clause 4.1 of Article 346.13 of the Code, is considered to have lost the right to apply the specified special tax regime from the beginning of the quarter in which the specified discrepancy is allowed.
Paragraph 7 of Article 346.13 of the Code establishes that a taxpayer who has switched from a simplified taxation system to another taxation regime has the right to switch back to a simplified taxation system not earlier than one year later after he lost the right to apply the simplified taxation system.
Features of determining the tax base for income received by participants in a simple partnership agreement are established by the provisions of Article 278 of the Tax Code of the Russian Federation.
According to paragraph 2 of Article 278 of the Tax Code of the Russian Federation, if at least one of the participants in the partnership is a Russian organization or an individual who is a tax resident of the Russian Federation, keeping records of income and expenses of such a partnership for tax purposes should be carried out:
- Russian participant regardless of who is in charge of the business partnership in accordance with the agreement.
- Define cumulative total based on the results of each reporting (tax) period profit of each participant partnerships in proportion to the share of the relevant participant, established by the agreements, in the profit of the partnership received for the period from the activities of all participants within the partnership.
- On a quarterly basis, before the 15th day of the month following the reporting (tax) period, inform each participant of this partnership about the amounts due (distributed) of income.
- part non-operating income taxpayers - participants in the partnership and are subject to taxation in the manner prescribed by Chapter 25 of the Tax Code of the Russian Federation.
So, a friend applying the simplified tax system, income from participation in joint activities is recognized on the date of actual receipt of funds in accordance with paragraph 1 of article 346.17 of the Tax Code of the Russian Federation.
Partners applying OSNO take into account income from joint activities as part of non-operating income.
According to paragraph 9 of Article 250 of the Tax Code of the Russian Federation, non-operating income, in particular, recognizes income distributed in favor of the taxpayer when he participates in a simple partnership, accounted for in the manner prescribed by Article 278 of the Tax Code of the Russian Federation.
Comrades applying the USN are guided by the provisions of paragraph 1 of Article 346.15 of the Tax Code of the Russian Federation:
- when determining the object of taxation, non-operating income is taken into account, determined in accordance with Article 250 of the Tax Code of the Russian Federation.
Upon termination of the agreement of a simple partnership, its participants in the distribution of income from the activities of the partnership do not correct the income previously taken into account by them in taxation on the income actually received by them in the distribution of income from the activities of the partnership.
Upon termination of a simple partnership agreement and the return of property to the participants in this agreement negative difference between the valuation of the returned property and the valuation at which this property was previously transferred under a simple partnership agreement, not recognized as a loss for tax purposes.
Each businessman must act within the established legal framework, strictly comply with the laws Russian state. Legislation establishes a closed list of forms in which an entrepreneur has the right to do his business.
It is difficult for an unprepared and legally unsavvy person to understand this legal casuistry. The article will consider the pros and cons of registering a business as an individual entrepreneurship and partnership, in which areas of business it is better to apply this or that form of management.
Individual entrepreneur.
An individual entrepreneur, or individual entrepreneur, is a person who independently and alone carries out entrepreneurial activities. For business development purposes, an individual entrepreneur may hire other people with whom he will be in an employment relationship.
Since the process of registering as an individual entrepreneur does not require a significant waste of time and effort, it is in this form that most small businesses conduct their business. In order to become an individual entrepreneur, you do not need to confirm the availability of sufficient funds, you also do not need to own an office, you can also register at the place of residence of the entrepreneur. This is one of the main benefits.
Another advantage of doing business as an individual entrepreneur is that all the profits received from the business are at the full disposal of the entrepreneur, no one can forbid him to withdraw money at any time and spend it at his discretion. The activity of an individual entrepreneur is controlled only by the tax inspectorate, other people have no right to get into your affairs, this preserves the confidentiality of information.
Free cash an entrepreneur can save in any amount as a pension savings, since no one can do it for him, because he does not have an employer. Thus, an entrepreneur can independently regulate and determine the size of his future pension provision.
There are also disadvantages in the implementation of IP activities.
- One of the main ones is the lack of funds. It is difficult for them to get loans from a bank, since the latter do not really trust loners, who may have nothing to pay off the debt. As a rule, an entrepreneur conducts all his affairs alone, therefore, due to incompetence, inattention, he can make mistakes that are fatal for his business, which would be impossible with collective work.
- An individual entrepreneur risks all his property in the course of entrepreneurial activity, and under unfavorable circumstances, he may be left with nothing. Business can stop at any time, as there is a strong dependence on one person who can get sick or die at any time. Therefore, in the form of IP, mainly doctors in private practice, consultants, and lawyers conduct their activities.
Partnership
For those who do not want to take risks, there is an option to unite with other people and create a partnership in which there is an opportunity to share risks and distribute responsibilities.
Partnerships are usually divided into general ones, in which all partners have equal rights; With limited liability, where most of the partners only invest money and meet the obligations of the company in the amount of the contribution. There are also qualified limited liability partnerships, which in their structure and status are close to corporations.
To create a partnership, it is necessary to conclude an agreement between the partners. In this case, there will be more money, since the capitals of at least two persons are combined. Banks are also willing to cooperate with partnerships on issues of issuing loans.
Two people can do a much better job by dividing up responsibilities, which increases the chances of success compared to a sole proprietorship. Yes and the tax burden partnerships will be smaller than corporations.
Among the disadvantages of partnerships are full responsibility association obligations. Also, conflicts are possible between comrades, which will only interfere with joint activities.
But no matter what form of ownership you choose, the success of any business will be a great business idea and the hellish work of an entrepreneur.
20.02.2017Reducing the tax burden is the dream of every businessman. "Simplifier" is no exception. The main thing is that this should be done legal grounds. One way to cut taxes is to work together.
From a letter to the editor
We work for USN. The goal is to cut taxes. Would a simple partnership work?
Expert opinion
In practice, joint activities are as follows: each company (IE) implements the function entrusted to it, including concluding expenditure contracts, and one of the comrades keeps records of absolutely all income and expenses, as on the basis of own documents, and on the basis of documents submitted by other parties to the agreement. Income and expenses are accounted for on an accrual basis (clause 4, article 273 of the Tax Code of the Russian Federation). At the end of the tax period, the same person distributes the financial result among all partners in proportion to the amount of their contributions; This income will be taken into account in taxation. It will need to be paid
Thus, partner firms can accept as part of income for the purposes of calculating the single tax not the entire amount of revenue received, but only the amount of profit received from the implementation of joint activities (Article 1048 of the Civil Code of the Russian Federation). It is divided among all participants in the partnership in proportion to the contribution of each of them, and in any case it will be less than the proceeds from the sale, since it already represents the difference between the income and expenses of the partnership.
Accounting for operations carried out by a simple partnership must be carried out separately from accounting for the operations of each of the firms in accordance with PBU 20/03 (approved by order of the Ministry of Finance of Russia dated November 24, 2003 No. 105n).
Now let us dwell on the important features of work under a simple partnership agreement.
- Organizations and individual entrepreneurs applying the simplified tax system with the object of taxation "income minus expenses" can become participants. "Simplifiers" who pay single tax income, they are deprived of such an opportunity. This follows from paragraph 3 of Art. 346.14 of the Tax Code of the Russian Federation.
Under a simple partnership agreement, several persons (partners) combine their contributions to make a profit or achieve a different result (clause 1, article 1041 of the Civil Code of the Russian Federation). Moreover, if the contract is concluded for the purpose of doing business, only commercial organizations and individual entrepreneurs can be its participants (clause 2 of article 1041 of the Civil Code of the Russian Federation).
By itself, a simple partnership does not form a legal entity (clause 1, article 1041 of the Civil Code of the Russian Federation). The partnership is not recognized as a taxpayer and is not subject to tax registration (paragraph 2, clause 2, article 11, articles 19, 83 of the Tax Code of the Russian Federation).
- The joint activity, for which the partners have united, is separated from that which they carry out outside the framework of a simple partnership agreement.
For this purpose, a separate tax accounting for operations on joint activities is organized. Moreover, it is conducted according to the rules of Chapter 25 of the Tax Code of the Russian Federation, even if all comrades use the simplified tax system. In this regard, they (through the partnership) have the opportunity to take into account, within the framework of joint activities, expenses that are not named in Art. 346.16 of the Tax Code of the Russian Federation.
Such accounting is organized by one of the comrades, who is instructed to conduct all the general affairs of the partnership.
Contributions of comrades to joint activities are not included in the cost of the simplified tax system. This applies both to cash deposits and to deposits in the form of property and property rights. The fact is that such contributions are not indicated in the list of expenses, which is enshrined in Art. 346.16 of the Tax Code of the Russian Federation.
Expenses incurred in the framework of joint activities are not reflected in the accounting for the simplified tax system. These costs are taken into account by the partner conducting common affairs when determining the financial result from the activities of the partnership as a whole.
- The partnership does not need to pay income tax on the profits received from the joint venture. Also, profits are not subject to "simplified" tax, even if all partners apply the simplified tax system (Letter of the Ministry of Finance of Russia dated December 22, 2006 No. 03-11-05 / 282). Within the framework of the partnership, only the financial result from the joint activity (profit or loss) is determined, which is then distributed among the partners.
- "Simplifiers" take into account the income received from participation in a simple partnership, on the basis of paragraph 1 of Art. 346.15, paragraph 9 of Art. 250 of the Tax Code of the Russian Federation.
To do this, a comrade conducting common affairs performs the following duties (clause 3 of article 278 of the Tax Code of the Russian Federation):
- determines on an accrual basis, based on the results of each reporting (tax) period, the profit of each of the partners in proportion to its share (established by agreement) in the profit of the partnership for the corresponding period;
- quarterly, until the 15th day of the month following the reporting (tax) period, informs each of the comrades about the amount of profit due to him.
The “simplifier” takes into account his part of the profit received from joint activities on the day the funds are received in bank accounts (to the cash desk) or on the day of receipt of other property (works, services) or property rights (clause 1 of article 346.17 of the Tax Code of the Russian Federation) . This amount represents the net income of the taxpayer, i.e. already reduced by the amount of expenses in the framework of the joint activity.
- If a loss is received as a result of joint activities, then, unlike profit, it is not distributed among the partners and is not taken into account by them when taxing (clause 4, article 278 of the Tax Code of the Russian Federation).
- By general rule organizations and individual entrepreneurs applying the simplified tax system are not recognized as VAT payers (paragraphs 2, 3 of article 346.11 of the Tax Code of the Russian Federation). The contribution of partners to joint activities is not recognized as the sale of goods (works, services) (clause 1, clause 2, article 146, clause 4, clause 3, article 39 of the Tax Code of the Russian Federation).
- Operations within the framework of joint activities are subject to VAT, even if the participants in a simple partnership are "simplified" (Article 174.1, paragraphs 2, 3 of Article 346.11 of the Tax Code of the Russian Federation).
Calculation and payment of tax are made according to the rules of Chapter 21 of the Tax Code of the Russian Federation.
IN this case one of the participants is responsible for paying VAT and maintaining general accounting of operations. As a rule, this is the one who conducts the general affairs of the partnership. It is he who is entrusted with the duties of a VAT payer (clause 1, article 174.1 of the Tax Code of the Russian Federation).
In particular, for operations within the framework of a simple partnership, he must (paragraphs 1, 2 of article 174.1, paragraph 3 of article 169 of the Tax Code of the Russian Federation):
- issue invoices to buyers (customers) of goods (works, services);
- keep books of purchases and books of sales.
It can also deduct VAT on goods (works, services), fixed assets and intangible assets. To do this, they must be acquired within the framework of a simple partnership agreement and used for VAT-taxable operations on joint activities (clause 3, article 174.1 of the Tax Code of the Russian Federation).
To receive a deduction, your suppliers must indicate in their invoices as a buyer a partner acting as a VAT payer (clause 3, article 174.1 of the Tax Code of the Russian Federation). Otherwise, your deduction will be denied.
If the invoice is issued to another member of the partnership, it must be corrected (Letter of the Federal Tax Service of Russia for Moscow dated October 17, 2006 No. 19-11 / 90800).
There is one more condition for application. A participant who keeps a general record of operations of a simple partnership and at the same time carries out activities outside this partnership must keep separate records of transactions. Only in this case, he has the right to receive a deduction (paragraph 2, clause 3, article 174.1 of the Tax Code of the Russian Federation).
A partner who keeps records of transactions must submit a VAT return to the tax authority in electronic form. The deadline for its submission is no later than the 25th day of the month following the expired quarter (clause 5 of article 174, clause 1 of article 174.1 of the Tax Code of the Russian Federation, clauses “c” of clause 7 of article 2, part 1 of article 4 federal law dated November 29, 2014 No. 382-FZ).
The right to exemption from VAT in accordance with Art. 145 of the Tax Code of the Russian Federation when performing operations within the framework of a simple partnership, Article 174.1 of the Tax Code of the Russian Federation is not provided for.
- Accounting for transactions in joint activities is regulated by PBU 20/03, approved by Order of the Ministry of Finance of Russia dated November 24, 2003 No. 105n.
Partner organizations when reflected in accounting and financial statements transactions related to participation in joint activities (a simple partnership agreement) are guided by paragraphs 13 - 16 of PBU 20/03, and the organization entrusted with the conduct of common affairs by the agreement - by paragraphs 17 - 21 of PBU 20/03. Thus, operations within the framework of joint activities with a partner conducting common business are subject to separate accounting on a separate balance sheet (clause 17 of PBU 20/03).
- In the event of termination of the joint activity agreement (when a participant withdraws from a simple partnership), the common property of the comrades is divided (the share of the exiting participant is allocated).
If property is transferred to a partner within the value of his initial contribution to the joint activity, such an operation is not subject to VAT (clause 1, clause 2, article 146, clause 6, clause 3, article 39 of the Tax Code of the Russian Federation). And from the value of property exceeding this limit, the participant who conducts common business is obliged to calculate and pay VAT.
We emphasize that in these norms we are talking about the initial contribution of the participants. Late contributions will not be taken into account.
note
Partner firms accept as income for the purposes of calculating the single tax under the simplified tax system not the entire amount of revenue received, but only the amount of profit received from the implementation of joint activities (Article 1048 of the Civil Code of the Russian Federation). It is divided among all participants in the partnership in proportion to the contribution of each of them, and in any case it will be less than the proceeds from the sale, since it already represents the difference between the income and expenses of the partnership.
And some more important remarks.
- Before making a decision to organize a business within the framework of a joint venture, it is necessary to formulate the “business or economic purpose” for which the joint venture will be organized, which, in addition, will be accompanied by the receipt of tax benefits.
For the first time the term business purpose" was used in the decision of the Plenum of the Supreme Arbitration Court of the Russian Federation of October 12, 2006 No. 53. It was stated that business transactions should be considered in accordance with their actual economic meaning in order to identify artificial legal constructions that do not contain signs of illegality (fraud, fraud), but at the same time do not have any reasonable explanation from the standpoint of economic necessity and were built solely for the purpose of minimizing taxation.
Thus, it is the subjective factor - the intentions of the taxpayer - that plays a decisive role in assessing the economic feasibility of the tax benefit.
Therefore, when creating a joint activity, it is necessary to think over its economic justification, which is not related exclusively to tax savings. For example, comrades pool their contributions to conduct joint activities, since they do not have sufficient resources (financial, labor, etc.) to independently carry out such activities. To conduct joint activities, one can contribute fixed assets, the second can provide personnel, the third can provide funds, experience in conducting such activities, etc. Since each comrade individually does not have all this available, the creation of joint activities in this case will be justified.
- It is better to transfer goods and materials or cash to joint activities. This is due to the application of special rules established by Chapter 26.2 of the Tax Code for the tax accounting of operations for the disposal of fixed assets. If you transfer fixed assets and (or) intangible assets to joint activities before three years have elapsed from the date of accounting for the costs of their acquisition, you will have to recalculate the amount of the single tax for the entire period of use of such objects (clause 3 of article 346.16 of the Tax Code of the Russian Federation).
And in relation to fixed assets and intangible assets with a useful life of more than 15 years - until the expiration of 10 years from the date of their acquisition.
Excluding from the calculation of the single tax the costs of acquiring objects transferred to joint activities, taxpayers are entitled to take into account only the amount of depreciation calculated in accordance with the rules of chapter 25 of the Tax Code (clause 3 of article 346.16 of the Tax Code of the Russian Federation). As a result of the recalculation, not only a single tax for the entire period of use of such an object under the simplified system, but also penalties will be paid.
