When does the tax exemption apply?
According to the general rule, individual entrepreneurs on the simplified tax system and a patent are indeed exempt from property tax that is used in business - clause 3 of Art. 346.11, paragraph 10 of Art. 346.43 Tax Code of the Russian Federation. Unified Agricultural Tax payers too, but with nuances that we will not talk about in this article - clause 3 of Art. 346.1 Tax Code of the Russian Federation.
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But there is an exception: the exemption does not apply if the tax is calculated at the cadastral value. Each region compiles a list of similar objects - premises for offices, retail outlets and consumer services - clause 7 of Art. 378.2 Tax Code of the Russian Federation. If you own non-residential premises, be sure to check it in the local list.
It happens that the premises are used as a warehouse, for production or as a garage, but suddenly it turns out to be on the list of retail and office premises - obviously by mistake. If the individual entrepreneur does not agree, he can go to court.
The Moscow government included the premises in the list, but the owner did not agree and went to court. The court found that the disputed building is not intended to accommodate retail facilities, catering facilities or consumer services - it is intended to accommodate garages and parking lots. The list item was declared invalid.
Case No. N 5-APA19-185
Sometimes the premises are not included in the list, but the building in which it is located is included. In this case, the individual entrepreneur will also not receive tax exemption.
The inspectorate denied an individual entrepreneur using the simplified tax system an exemption from property tax. The individual entrepreneur went to court, where he stated that the premises were not on the list, so he had the right to a benefit. The court said: but the building is included in the list, and the legality of its inclusion in the list must be contested separately.
Case No. A27-29802/2018
And, of course, for objects that are not used in business, the entrepreneur must pay tax as usual. For example, you cannot use the benefit to stop paying tax on your apartment.
What does the tax amount depend on?
Regions independently set the property tax rate, since the payment applies to local ones. The tax amount is affected by the price of the property; the higher it is, the greater the payment amount. The highest rate in Russia is 2%. On the tax website you can find out what percentage is set for a particular object. You will need to enter the tax type, region and year for which you plan to pay real estate taxes.
From the beginning of 2021, property taxes are calculated based on cadastral value. This price is determined not by the owner himself or the market, but by a government agency. But the cost is not much different from the market price. Recalculation of the cadastral valuation of real estate takes place every 5 years. The obtained data is published on the Rosreestr website.
Until the end of 2021, in some areas and regions, the tax was based not on the cadastral value, but on the inventory value; it was calculated according to the degree of depreciation of the object. Now there is no such thing, and all real estate taxes in the Russian Federation are calculated in a single way - at the price indicated in the cadastre.
The tax rate for individual entrepreneurs or individuals will depend on the type of object, cadastral value and location. For example, for the Yaroslavl region for 2021:
| Type of object, cadastral value and location | Interest rate |
| Housing priced up to 2 million rubles | 0,10 |
| Housing from 2 million to 5 million rubles | 0,15 |
| Unfinished residential building | 0,15 |
| Residential buildings costing more than 5 million rubles | 0,20 |
| Non-residential outbuildings up to 50 sq.m. m. | 0,15 |
| Residential complexes, garages, parking spaces | 0,15 |
| Objects whose cadastral value exceeds 300 million rubles | 2,00 |
| Other objects | 0,50 |
No one needs to calculate how much they need to pay into the budget. The tax office sends a letter indicating both the deadline and the amount. The Federal Tax Service sends out notifications once a year, and payment must also be made in one payment before December 1 of the next year. That is, upon receipt of a letter on January 1, 2021 to pay tax for 2021, it must be paid no later than December 1, 2020. There is no need to report with a separate declaration or write a report.
How to get exemption
In the latest clarifications, the tax service said that if the individual entrepreneur does not submit an application for a benefit, then the inspectorate can provide it without an application, based on the information it has - clause 6 of Art. 407 of the Tax Code of the Russian Federation, Letter of the Federal Tax Service of Russia dated May 11, 2021 No. BS-4-21/ [email protected]
But what if the tax office does not receive information from the register or doubts that the property is used in business? We advise you to play it safe and do as before: send an application with supporting documents to the inspectorate. These could be documents in which the premises appear as a place of acceptance and release of goods or employment contracts in which the employee’s place of work is indicated - Letter of the Ministry of Finance of Russia dated April 26, 2018 N 03-05-06-01/28324.
At the request of the individual entrepreneur, the inspectorate can recalculate the tax for previous periods. Recalculation can be made no more than 3 years preceding the year of application and no earlier than the date when the individual entrepreneur became entitled to the benefit - Letter of the Federal Tax Service of Russia dated 01.06.2020 No. BS-4-21 / [email protected] That is, in 2021 An individual entrepreneur may request a tax refund for 2021, 2021 and 2021.
Which entrepreneurs are entitled to benefits?
The amount of property tax for individual entrepreneurs depends on the benefits that the owner is entitled to. They are provided to pensioners, disabled people, and summer residents with a plot of land up to a certain size. Each region itself supplements the federal list of beneficiaries, so it can be many times longer. For example, it may include single-parent or large families. But, in general, the state list of categories of citizens who are entitled to benefits for paying real estate taxes looks like this:
| They don't pay at all | Pay 50% |
| Heroes of the USSR | Owners of dachas up to 50 sq. m. |
| Heroes of the Russian Federation | |
| Holders of the Order of Glory of three degrees | |
| Participants and veterans of the Second World War | |
| Families of fallen soldiers | |
| Retired military personnel | |
| Disabled people from childhood and disabled people from childhood | |
| Liquidators of the Chernobyl Nuclear Power Plant | |
| Afghan warriors | |
| Pensioners by age | |
| Owners of real estate used for creative studios, libraries, museums |
If an individual entrepreneur falls under one of the preferential categories, then he can submit documents to the Federal Tax Service if the amount was incorrectly calculated for him.
The basis for recalculating the amount of property tax may be:
- incorrect information about the owner;
- the billed tax amount, which does not take into account benefits.
When an entrepreneur justifies a mistake, the tax inspectorate:
- will reset the amount and penalties that contained the error;
- will generate a new notification and place it in the taxpayer’s personal account.
If the individual entrepreneur does not use the taxpayer’s personal account as an individual, then he will receive a new notification by mail. According to the legislation, the Federal Tax Service can issue an invoice for payment of property tax to individual taxpayers, if for some reason the payer has not been involved in it earlier, within 3 years. In addition, the tax for the same tax period can be recalculated both downward and upward according to the Tax Code of the Russian Federation.
If the individual entrepreneur rents out an apartment
An individual entrepreneur can rent out an apartment both as an individual and as an entrepreneur.
In the first case, you will have to pay 13% personal income tax on income from renting an apartment and there will be no exemption from property tax. In order for the inspection to regard the rental of an apartment as a business activity, the individual entrepreneur must have OKVED code 68.20.1 “Rent and management of own or leased residential real estate” - Letter of the Ministry of Finance of Russia dated December 19, 2011 N 03-11-11/318.
If you rent out an apartment as an individual entrepreneur, you can take advantage of the exemption. To do this, we advise you to provide the inspection with documents that confirm that the apartment is used in business, for example, a lease agreement and receipts for receipt of rent - Letter of the Federal Tax Service of Russia dated 04/06/2020 No. BS-4-21/ [email protected]
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When choosing between two options, it is important to consider the nuance. When receiving an exemption from property tax, entrepreneurs lose the right to exemption from personal income tax when selling an apartment. These two benefits are incompatible.
The entrepreneur will have to multiply all income received from the sale by his regular rate, and if he closes the business, by 13% personal income tax. After the business is closed, the benefit will not return: the tax authorities will consider it an unjustified tax benefit.
How to calculate property tax for individual entrepreneurs
If the notification from the Federal Tax Service did not arrive until October of the current year, and the individual entrepreneur knows that he must pay property tax, then it is better to request a second notification yourself. Or at least check whether property taxes are charged or not.
If it seems that there was an error in the tax authority’s notification regarding the payment amount, then it can be double-checked on the Federal Tax Service website. For a clearer understanding of how tax is calculated, consider an example:
IP Ilkov, owns a warehouse in Moscow, in a building under cadastral number 77:09:0001015:1064. When indicating a real estate property in the form, we will select the type - another building, structure, structure. After this, we will indicate that the property is not included in the list of retail and office real estate.
The calculated cadastral value of the property is 78829968.44 rubles according to Rosreestr. The area of the facility is 2029.6 sq. m. If you own a warehouse in the amount of 1/202 of the total area for more than 12 months, zero tax deduction, no benefits and a tax rate of 2%, the tax amount will be 7805 rubles.
This way you can check any object in the Russian Federation. To find the cadastral number, use a public map, where the address will suffice.
If the individual entrepreneur does not temporarily use the premises in business
Individual entrepreneurs have periods when property is not used in business. For example, the old lease has expired, but a new one has not yet been concluded, or the premises are being renovated.
The property tax exemption will still apply. Because entrepreneurial activity includes not only generating income, but also the entire preparatory process: repairs, hiring new employees and searching for contractors. Although it is advisable to save documents for repair work, in case the tax office becomes interested in the reasons for the downtime and reduction in the taxable base of your business - Letter of the Ministry of Finance of the Russian Federation dated May 12, 2014 No. 03-11-11/22083.
