Patent: benefits and conditions of use

When the word “patent” is pronounced, everyone remembers first of all the patent for the invention. However, for accountants, economists and certain categories of entrepreneurs, this word has a different meaning.

Let’s try to explain in simple words what Russian patents related to business and entrepreneurship are like, what benefits they provide, and why they can and should be used.

What is it and why is it needed?

Recently, the country has had a new special tax regime for IPs. It is called the patent system of taxation. Let’s reveal its essence in more detail, give a definition and find out what the patent gives.

The majority of experts perceive the patent as one of the options of the Tax Administration, which is deciphered as a simplified system of taxation, and state support of business. An individual entrepreneur acquires a patent, which gives him the right not to pay three different taxes: personal income tax (personal income tax), VAT (value added tax) and property tax.

But this is not all. The law stipulates that regional authorities may include local taxes in this list (if desired, to make their regions attractive for business). And local governments actively use it: for example, if an entrepreneur is registered in the capital, he is automatically exempted from paying the trade tax.

What payments do you have to make to the businessman? They are obliged to pay the necessary amounts to the Pension Fund, as well as to the Compulsory Medical Insurance Fund, and do it not only for themselves, but also for their employees, if they have them.

Those entrepreneurs who have a turnover of less than 60 million rubles per year have the right to receive such a patent. Not so long ago, the requirement to limit the number of employees – no more than 15 employees – was relevant. However, not so long ago the Ministry of Finance decided to remove it.

The only restriction: with a staff of more than 15 people should be combined with the patent system with the main type of taxation and keep separate records of employees in both subdivisions.

The law distinguishes between 60 and 80 types of patents, which allow such registration, they are specified in the Tax Code of the Russian Federation. This difference is due to the fact that regional authorities can add some types of activities, priority in their region, to this list.

Thus, in the basic version there are 63 services, but in Moscow and Moscow region patents are issued for 80 types of services.

We’ll highlight the most popular ones among them:

  • Retail trade in food and non-food products (the so-called trade patent);
  • Provision of household services to the population and organizations;
  • transport services, passenger and cargo transportation (transport patent);
  • car repair;
  • cafes, canteens, restaurants (patent for public catering);
  • Rental of housing;
  • provision of babysitting and training services (tutoring and preparation for school), translations;
  • provision of physical education and sports services;
  • Programmers’ services.

The presented list cannot be considered final, it contains only the most popular types of activities, and in the list you can find even the services of those who patrol the streets and are on duty at the entrances to public institutions and dormitories (we, of course, mean janitors).

The full list of those who have the right to switch to this system can be found in Article 346.43 of the Tax Code. I would also like to note one important limit, which should not be forgotten: the square of the premises does not exceed 50 square meters. m (this applies to trade and catering).

The legislator plans to expand the already existing list by adding courier services, plant growing services and even street cleaning services. So tomorrow even the wipers can use IP with a patent, if it will be necessary for their customers.

If the owner of the business is engaged in several types of activities at once, he must issue each patent separately. As a matter of principle, a combination is allowed by law: part of the business is transferred to the new system, while part of the business remains on the regular system of taxation.

As for the terms of the patent, the application can be filed for a whole year or for several months (even for 1 month it is possible, if not a pity to do the translation), and here everything depends on the wishes of the owner.

It may happen that a patent is beneficial in a period when there is a maximum influx of clients (for example, for those who rent a home in the resort regions, for the summer months, you can apply for a patent, and in winter work under normal conditions – the savings will be tangible).

What is the difference between such a system and the simplified one already used in our country? The main advantages of the patent are its flexibility and freedom of action. Nobody links it to a single taxation system: if you want, you switch to a patent, if you want, you return to the usual system.

An individual entrepreneur has to decide for himself which system is beneficial for him, because it allows him to minimize payments to the budget and, therefore, to allocate funds for his own development. This is the kind of state support for small businesses.

Unfortunately, those entrepreneurs who are already working on the simplified system, can participate in the purchase of a patent only from the beginning of 2020.

Besides, there is a possibility to change one’s mind if the circumstances have changed. You can refuse to use such a system at any time, even if the validity period has not expired.