The court clarified what tax an individual entrepreneur must pay on the simplified tax system when selling property that he rented out

Which individual entrepreneur can avoid paying property tax?

Individual entrepreneurs are regarded as individuals and according to the same scheme they pay property tax. Starting from 2019, individual entrepreneurs make payments only for real estate that:

• already refers to the housing stock - apartments, houses, cottages, if the building has a connection with the land;
• non-residential objects - garages, parking spaces;
• any other residential and non-residential finished buildings or those that are just being rebuilt, but are already registered as property.

At the same time, entrepreneurs on imputed income, patent or agricultural tax, do not pay for the real estate that is needed for work. For example, if they rented or bought an object for equipment, a workshop or a warehouse.

Those individual entrepreneurs who work on the main taxation system are required to pay real estate tax. Tax is also paid by simplified entrepreneurs if they have a store, retail space or office, as well as premises for the provision of services, which is included in the list of cadastral real estate.

In the Russian Federation, an entrepreneur has 5 taxation options when opening an individual entrepreneur:

• general taxation system - OSN;
• patent - PSN;
• simplified - simplified tax system;
• single tax on imputed tax - UTII;
• unified agricultural tax - Unified Agricultural Tax.

If the individual entrepreneur has not submitted an application to the tax service to change the tax regime, then according to the legislation of the Russian Federation he will work under the OSN.

To understand whether or not an individual entrepreneur should pay property tax, you can follow this rule:

1. There is no need to pay for real estate for work under a patent, imputation or agricultural tax. In a simplified way, you need to check whether the property belongs to the cadastral value or not. If not, then the individual entrepreneur does not pay tax; if yes, then he pays.
2. Entrepreneurs who operate under the basic taxation system are required to pay property taxes to the budget. It does not matter whether the property is included in the cadastral list or not.

Therefore, the tax regime and inclusion in the cadastre are the determining parameters.

How to prove that property is used in the activities of an individual entrepreneur

An entrepreneur does not need to prove that the property is involved in business activities. The tax service itself will establish this fact during on-site inspections. To be exempt from paying tax in this case you will need:

• submit an application in free form;
• describe real estate objects that are involved in business activities;
• indicate the tax regime option used.

Entrepreneurs entitled to benefits do not need to attach supporting documents. This procedure has been in place since 2018.

Individual entrepreneur position

The taxpayer challenged the additional charges in court. He stated that income from the sale of real estate is subject to a single tax under the simplified tax system only in two cases:

• if the Unified State Register of Individual Entrepreneurs indicates such a type of activity as the sale of real estate (in this dispute the individual entrepreneur did not declare this type of activity);
• or if the fact of systematic implementation of such type of activity as the sale of real estate has been established (since “systematicity” is one of the signs of entrepreneurial activity specified in clause 1 of Article of the Civil Code of the Russian Federation).

At least two similar paid transactions can indicate the systematic receipt of profit, and the individual entrepreneur concluded only one purchase and sale agreement for 13 objects. That is, the sale of real estate was of a one-time nature.

The entrepreneur also noted that he was the owner of the mentioned buildings as an “ordinary” individual, and not as an individual entrepreneur.

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:

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.

Cadastral valuation

So, the cadastral value is a mandatory condition under which property tax is calculated on the property in 2021. It is not a constant, that is, it can change depending on various factors. To determine this value, a cadastral valuation of real estate is carried out.

Exactly which objects should be valued at cadastral value for tax purposes is specified in Article 378.2 of the Tax Code of the Russian Federation. These include:

• administrative, business and shopping centers;
• premises for offices, trade, catering establishments and services;
• some types of objects of foreign legal entities;
• residential real estate, garages, parking spaces, country houses, outbuildings on plots for individual housing construction or subsidiary plots, as well as unfinished construction projects.

This is a general list of object types. In each region, by decision of the authorities, their cadastral value is assessed. This year, the vast majority of regions (74 out of 85) evaluate real estate at cadastral value. Such an assessment can be carried out either selectively or in relation to all types of real estate. As an example, the administration of a constituent entity of the Russian Federation decides to conduct an assessment of all apartment buildings.

After determining the cadastral value, a law is issued stating that taxation of objects should be carried out on its basis.

List of taxable objects

A list of objects, the base for which is calculated as their cadastral value, is compiled in each constituent entity of the Russian Federation at the beginning of the year. It must be posted on the website of the executive authority and sent to the regional Federal Tax Service.

Thus, a business entity using a simplified system needs to check the list on the website of the administration of its region. If the object is included in it, therefore, it is subject to real estate tax even despite the application of the simplified tax system.

For example, in 2021 in St. Petersburg, 5,796 objects were subject to taxation, including residential premises, non-residential buildings and structures for various purposes, garages and parking spaces.

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.

conclusions

We looked at the property tax of organizations and the tax on property of entrepreneurs that is used in business, which are valid for payers of the simplified tax system. They are levied on the real estate for which the cadastral value has been determined. If it has not yet been installed, you do not need to pay taxes.

You can find out exactly whether a particular commercial real estate property is taxable or not by checking the list that is posted on the website of the regional executive authority. Individual entrepreneurs don’t have to worry - the Federal Tax Service will calculate the tax itself and send a receipt.

The taxes that business entities pay on their real estate are regional. Therefore, specific rates, payment terms, and benefits may vary. To find out all the nuances, we recommend that you familiarize yourself with the laws of the relevant constituent entity of the Russian Federation.

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:

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.

Which individual entrepreneurs are required to pay property tax?

An entrepreneur is required to pay tax if two conditions are met:

1. He is the owner of the property. If the property is used under a lease agreement, the tenant does not have to pay property taxes.
2. The property is located on the territory of the Russian Federation. If the object is located in another country and the individual entrepreneur legally owns it in that state, then he is not obliged to pay tax to the budget of the Russian Federation.

At the same time, an individual entrepreneur pays tax if he works according to OSNO, regardless of the use of property - for personal or business purposes. If the objects are leased, the owner-entrepreneur must also pay tax for them if he works for OSNO, and not the tenant. And even if an entrepreneur gives the property for free use, he will still pay property taxes.

about the author

Klavdiya Treskova - higher education with qualification “Economist”, with specializations “Economics and Management” and “Computer Technologies” at PSU. She worked in a bank in positions from operator to acting. Head of the Department for servicing private and corporate clients. Every year she successfully passed certifications, education and training in banking services. Total work experience in the bank is more than 15 years. [email protected]

Is this article useful? Not really

Help us find out how much this article helped you. If something is missing or the information is not accurate, please report it below in the comments or write to us by email

Results

Starting from 01/01/2015, individual entrepreneurs on a simplified basis for some objects acquired the obligation to pay property tax based on the cadastral value. The calculation of such tax is carried out by the Federal Tax Service. Until 2015, an individual entrepreneur was burdened with property tax only if he worked for OSNO, and the use of any of the special regimes allowed him not to pay this tax.

You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Comments: 4

Your comment (question) If you have questions about this article, you can tell us. Our team consists of only experienced experts and specialists with specialized education. We will try to help you in this topic:

Author of the article: Klavdiya Treskova

Consultant, author Popovich Anna

Financial author Olga Pikhotskaya

1. Alexander
   10/13/2021 at 02:29 I bought a building 5 years ago that was used by the previous owner as a cafe and restaurant. I did renovations there in 2021 and 2021. As an individual entrepreneur, will I be able to get a property tax benefit for at least 2021?
   Reply ↓ Anna Popovich
   13.10.2021 at 19:34

   Dear Alexander, what tax system do you use? For individual entrepreneurs who use their property in business activities and apply special tax regimes, the Tax Code of the Russian Federation provides tax preferences. In accordance with paragraph 3 of Art. 346.11, paragraph 4 of Art. 346.26 and paragraph 10 of Art. 346.43 of the Tax Code of the Russian Federation, the use of special regimes by individual entrepreneurs provides for their exemption from payment of property tax for individuals in relation to property used in business activities, with the exception of objects of taxation with the property tax for individuals included in the list of objects for administrative, business, trade and household purposes, determined in accordance with paragraph 7 of Art. 378.2 of the Tax Code of the Russian Federation, approved by the constituent entity of the Russian Federation.

   Reply ↓

NTVP "Kedr - Consultant"

LLC "NTVP "Kedr - Consultant" » Services » Consultations of auditors » If an individual is registered as an individual entrepreneur, then income from the rental of non-residential premises is taken into account as income when determining the tax base for the tax paid in connection with the application of the simplified tax system

Print

Question: An individual (individual entrepreneur is not registered) leased non-residential premises to a legal entity for a store. A legal entity sits on UTII and pays all taxes on its own, while an individual received a tax for this premises. And this premises was classified as a residential building, although as a premises it is non-residential and it is leased for use in business activities. Please explain how an individual can pay taxes in this situation, and whether the tax office is right when it taxes non-residential premises as a residential building. And also an individual and the head of an organization are one person.

Zarya audit specialists answer: 1. According to Art. 1 of the Law of the Russian Federation of December 9, 1991 N 2003-I “On taxes on property of individuals” 1. Payers of taxes on property of individuals (hereinafter referred to as taxes) are recognized as individuals - owners of property recognized as the object of taxation.

According to Art. 2 of this Law, the following types of property are recognized as objects of taxation:

1. House;
2. apartment;
3. room;
4. country house;
5. garage;
6. other building, premises and structures;
7. share in the right of common ownership of the property specified in paragraphs 1 - 6 of Article 2 of the Law.

In accordance with the decision of the City Duma of Izhevsk dated November 26, 2010 N 38 (as amended on November 17, 2011), from January 1, 2012, the following rates of property tax for individuals were established depending on the total inventory value of taxable objects :

• residential building - 0.1 - 0.31%;
• other buildings, premises and structures - 0.1 - 1.2%.

In this situation, an individual is the payer of personal property tax, which is paid by the owner of the property.

2. In accordance with paragraph 1 of Article 226 of the Code, Russian organizations from which or as a result of relations with which the taxpayer received income specified in paragraph 2 of the said article of the Code are required to calculate, withhold from the taxpayer and pay the amount of tax calculated in accordance with Article 224 Code. These organizations are tax agents.

According to paragraph 2 of Article 226 of the Code, the calculation of amounts and payment of tax in accordance with this article of the Code are carried out in relation to all income of the taxpayer, the source of which is a tax agent, with the exception of income in respect of which the calculation and payment of tax are carried out in accordance with Articles 214.1, 227, 227.1 and 228 of the Code.

A Russian organization that pays rent to an individual for premises rented from him is recognized as a tax agent in relation to such income of the individual and, accordingly, must fulfill the obligations of calculating, withholding and transferring to the budget personal income tax in the manner prescribed by Article 226 of the Code .

At the same time, in accordance with paragraph 5 of Article 3 of the Code, no one can be assigned the obligation to pay taxes and fees, as well as other contributions and payments that have the characteristics of taxes or fees established by the Code, are not provided for by the Code or are established in a manner other than that specified Code. An additional agreement to a contract in which tax payment obligations are assigned to the taxpayer will be void. (Letter of the Department of Tax and Customs Tariff Policy of the Ministry of Finance of the Russian Federation dated July 15, 2010 N 03-04-06/3-148)K

In addition, it should be noted that although for individuals participating in rental relations and (or) transactions for the purchase and sale of property owned by them, there is no obligation to obtain the status of an individual entrepreneur, and the income received by individuals from renting out rental (lease) and (or) sale of movable or immovable property are specified in Article 208 of the Tax Code of the Russian Federation as an independent type of income that is subject to personal income tax taxation; in accordance with paragraph 1 of Article 23 of the Civil Code of the Russian Federation, a citizen has the right to engage in entrepreneurial activity without forming a legal entity from the moment of state registration as an individual entrepreneur.

In accordance with the provisions of civil legislation, entrepreneurial activity is an independent activity carried out at one’s own risk, aimed at systematically obtaining profit (income) from the use of property, sale of goods, performance of work or provision of services by persons registered in this capacity in the prescribed manner.

The presence of signs of entrepreneurial activity in a citizen’s actions is evidenced, in particular, by the following facts:

• production or acquisition of property for the purpose of subsequent profit from its use or sale;
• accounting of business transactions related to transactions;
• the interconnectedness of all transactions made by a citizen in a certain period of time;
• stable relationships with sellers, buyers, and other counterparties.

Economic activity takes place when resources, equipment, labor, technology, raw materials, materials, energy (information resources) are combined into a production process, the purpose of which is the production of products (provision of services).

Economic activity is characterized by production costs, the production process and the output of products (provision of services). This is stated in the All-Russian Classifier of Types of Economic Activities OK 029-2001 (NACE Rev. 1), approved by Resolution of the State Standard of Russia dated November 6, 2001 N 454-st.

If all the above characteristics are present, an individual is required to register as an entrepreneur without forming a legal entity.

Thus, if operations for leasing (renting) property or operations for buying and selling property are carried out in the presence of signs of economic and entrepreneurial activity, an individual is obliged to register as an entrepreneur without forming a legal entity. In this case, the individual will be required to pay tax on the relevant income as an individual entrepreneur.

If there are no grounds for recognizing transactions with real estate as entrepreneurial activity, an individual must pay personal income tax on the income received as a person who is not an individual entrepreneur.

Recommendations:

1. Regarding property tax: individual entrepreneurs who apply the simplified taxation system and are the owners of property used to carry out their business activities are not payers of property tax for individuals (in relation to such property). In relation to other property, these individual entrepreneurs are recognized as payers of property tax for individuals on a general basis.

Based on the totality of the provisions of the Tax Code and Law N 2003-1, in order to confirm the right to exemption from payment of property tax for individuals, individual entrepreneurs submit to the tax authorities an application in any form for exemption from payment of this tax in relation to the real estate indicated in the application.

In addition, it is necessary to submit documents to the tax authorities confirming the fact of using real estate for business activities.

Documents confirming the leasing of non-residential premises are lease agreements with tenants, payment documents indicating the receipt of income from this type of activity, and any other documents confirming the use of property for business activities during the period of application of the simplified taxation system. Similar explanations are given in letters of the Ministry of Finance of Russia dated January 18, 2010 N 03-11-11/1 and dated February 1, 2010 N 03-05-04-01/06.

If the right to a benefit arises during a calendar year, the tax is recalculated.

Thus, in accordance with paragraph 3 of Article 346.11 of the Code, the use of a simplified taxation system by individual entrepreneurs provides for the replacement of the payment of a number of taxes, including the property tax of individuals (in relation to property used for business activities).

2. For personal income tax: in accordance with paragraph 1 of Article 346.15 of the Tax Code of the Russian Federation, individual entrepreneur taxpayers applying the simplified taxation system, when determining the object of taxation, take into account sales income, determined in accordance with Article 249 of the Code, and non-operating income, determined in accordance with with Article 250 of the Code. When determining the object of taxation, income provided for in Article 251 of the Code is not taken into account.

Thus, if an individual is registered as an individual entrepreneur and in accordance with the requirements of the Federal Law of 08.08.2001 N 129-FZ “On State Registration of Legal Entities and Individual Entrepreneurs”, the type of economic activity such as renting is indicated in the Unified State Register of Individual Entrepreneurs rental of own non-residential real estate (code 70.20.2 of section “K” of the All-Russian Classifier of Types of Economic Activities (OKVED), approved by Decree of the State Standard of Russia dated November 6, 2001 N 454-st.), then income from the rental of non-residential premises received by such a taxpayer , are taken into account as part of income when determining the tax base for taxes paid in connection with the application of a simplified taxation system (for example, income at a rate of 6%).