Registration of employees under GPC agreements: advantages and pitfalls

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07.07.2021 Vladlena Vladlena Legislation

PFDL from payments under civil contracts

Remuneration under a contract is the profit of an individual received from an enterprise, therefore it is subject to personal income tax.

If an individual is not considered an individual entrepreneur, then the tax on the remuneration presented is calculated, withheld and sent by the enterprise that pays it. Tax legislation provides penalties for ignoring this provision.

When an enterprise cooperates with an individual entrepreneur , it is not obliged to withhold personal income tax from remuneration, since the enterprise is not considered a tax agent.

When an individual entrepreneur operates on a general taxation system, based on Art. 227 of the Tax Code of the Russian Federation , he must pay personal income tax on his own.

Individual entrepreneurs using the simplified tax system do not pay personal income tax in terms of taxes received as a result of business activities. In paragraph 3 of Art. 346.11 states that the taxes that were paid under this special regime are a replacement for personal income tax on profits provided as a result of business activities.

In the GPC contract, it is necessary to mention that the contractor is considered an individual entrepreneur by filling out the registration number in the preamble of the contract from the Unified State Register of Entrepreneurs record sheet.
As a result, there will be no problems related to the reasons why the tax was not collected, and the remuneration was sent to the counterparty in full.

Step-by-step instruction

On October 15, an agreement was concluded with the individual Drozdov O.V. for the provision of services for the repair of premises in the amount of 30,000 rubles. Along with the documents, Drozdov submitted an application for personal income tax deduction for the first child under 18 years of age.

On November 16, an act of provision of services was signed, and remuneration was paid to the employee into a bank account. Personal income tax has been paid to the budget.

Step-by-step instructions for creating an example. PDF

Tax deductions

In ch. 23 of the Tax Code , which controls the provisions for the calculation and payment of personal income tax, describes the right of taxpayers to return tax deductions, and they can be presented in various forms.

Professional tax deduction

Performers who make a profit as a result of performing work or providing services under GPC contracts have the opportunity to use a professional tax deduction for the amount of expenses that have documented evidence. Art. 221 of the Tax Code of the Russian Federation provides for this possibility.

Thus, an individual who cooperates with an enterprise under a GPC contract can receive a tax deduction by confirming his own expenses under the contract.

Deductions provided for in Ch. 23 of the Tax Code of the Russian Federation , are provided at the request of the taxpayer. To use the right to a professional deduction, the contractor must send an application and the necessary documentation to the tax agent , who will verify the expenses.

Standard tax deduction

An enterprise can offer the contractor basic tax deductions under a civil contract, which are provided for in Art. 218 of the Tax Code of the Russian Federation , if a personal income tax of 13% .

From paragraph 3 of Art. 218 of the Tax Code of the Russian Federation , it is clear that standard tax deductions are offered to the taxpayer:

• tax agent who is the source of payment of income
• by decision of the taxpayer
• based on a written application and documentation that confirms the right to deductions

Thus, the taxpayer’s decision is formalized by his application for such a tax deduction.

Property tax deduction

A property tax deduction in connection with the purchase of housing property can only be provided by the employer . It can be obtained at the end or at the time of the tax period with the help of the employer.

Being limited to a civil contract, the customer cannot provide the contractor with such deductions, even taking into account the fact that he may be a tax agent.

Checking mutual settlements

To check settlements with an employee under a GPC agreement, create the report Account Analysis 76.10 “Other Settlements with Individuals” in the Reports - Account Analysis section.

The absence of a final balance in account 76.10 “Other settlements with individuals” means that there is no debt to the employee.

If an advance payment is required under a GPC agreement, using this functionality is not suitable. Use the algorithm outlined in the article Calculations under a GPC agreement with an advance payment

Test yourself! Take a test on this topic using the link >>

See also:

• Salary settings: 1C
• Calculations under the GPC agreement with advance payment
• Travel expenses for individuals under a GPC agreement are subject to personal income tax
• [05/29/2020 recording] Supporting seminar 1C BP for May 2020

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Insurance contributions to funds

In Art. 420 of the Tax Code of the Russian Federation describes that insurance premiums are collected from payments to individuals in relation to civil contracts that are based on the performance of activities or the provision of services.

Social insurance contributions

Payments to individuals based on GPC contracts are not subject to social insurance contributions. In such a situation, social insurance is not used.

Accident insurance

To exclude injuries, insurance against accidents and occupational diseases resulting from work at the enterprise is necessary. The legislation provides a definition: the object of taxation with insurance premiums is considered to be payment limited to civil contracts, the subject of which is the performance of work or provision of services, if, according to these contracts, the customer undertakes to pay insurance payments to the insurer, that is, they are taxed exclusively when this is described in the contract .

Pension and health insurance contributions

For citizens of the Russian Federation, there are the following tariffs for calculating insurance premiums:

• 22% for pension insurance up to the established maximum base, above it - 10%
• 5,1% for compulsory health insurance

In view of this, payments under the contract for Russians will be taxed in the amount 27,1%.

Contributions for injuries

From para. 4 paragraphs 1 art. 5 and paragraph 1 of Art. 20.1 of Federal Law No. 125-FZ of July 24, 1998, it is clear that such contributions from the contractor’s remuneration are paid exclusively in cases provided for by the contract.

Features of the GPC agreement and fines

When concluding a “civil” contract, several important nuances must be taken into account.

No labor discipline and personnel records

Persons working under a GPC agreement are not full-time employees and are not required to obey internal labor regulations. This means, in particular, that they do not have to come “to work” every day, or at a certain time. They can also finish performing work or providing a service at any time and go about their business. For such “workers” there are no lunch breaks, vacations or sick leave.

The organization, in turn, should not fill out a time sheet for freelance employees. Also, you should not draw up personnel documentation on them, including orders and work books. All this significantly reduces the non-productive burden on the “employer”.

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Payment of remuneration and fines

The freelance status of persons with whom GPC agreements have been concluded means that remuneration is paid to them not for their labor function, but for the fact of performing work or providing a service. Therefore, if the work or services are not performed in full, of poor quality or in violation of the deadline, the advance amount paid is subject to return.

The lack of the right of the performer (contractor) to a monthly salary also means that the customer does not have the obligation to transfer remuneration strictly every half month.

The fact that the relationship between a company and an individual is formalized by a GPC agreement makes it possible to have a flexible approach to the issues of establishing and paying appropriate remuneration. All these issues are resolved exclusively on a contractual basis. Therefore, various fines can be included in a civil contract if the work is completed in violation of the deadline or of poor quality.

For example, it is permissible to establish a condition on reducing remuneration for each day of delay in delivering the work. Or determine that the payment is reduced if the work is performed poorly. However, it is impossible to fine an “employee” under a GPC agreement for lateness, absenteeism and other labor violations. After all, as we have already said, the work regime does not apply to freelance employees. At the same time, a fine for untimely start of work or provision of a service, if the start date (time) is directly indicated in the contract, is quite legal (clause 1 of article 708 of the Civil Code of the Russian Federation, article 783 of the Civil Code of the Russian Federation, clause 1 of article 330 of the Civil Code RF).

Termination of an agreement

When terminating a civil contract, the protective mechanisms provided for by the Labor Code do not apply. And the Civil Code allows the inclusion of any termination rules in a civil contract (subclause 2, clause 2, article 450 of the Civil Code of the Russian Federation). Moreover, the possibility of unilateral refusal to fulfill a contract for the provision of services at any time and without explanation is directly stated in Article 782 of the Civil Code of the Russian Federation. Therefore, there are usually no problems with “dismissal” under a GPC agreement.

IMPORTANT. These rules apply in both directions. This, in particular, means that the “employee” can refuse further cooperation at any time without notifying the customer two weeks in advance. True, in this case, it will be possible to deduct losses incurred due to the early termination of the contract from the amount of remuneration (clause 2 of Article 782 of the Civil Code of the Russian Federation).

In conclusion, we note that any contract or service agreement that an organization has concluded with a non-entrepreneur individual may come under the close attention of regulatory authorities. If inspectors find signs of an employment contract, this will result in a fine and arrears for insurance premiums for the “employer”. To prevent this from happening, you need to correctly draw up the GPC agreement in 2021 and not include unacceptable conditions in it.

Accounting as part of income tax expenses

Expenses of an individual are taken into account depending on his status, on the basis of different provisions and as part of various types of expenses, which are provided for in Art. 25 Tax Code of the Russian Federation .

The contractor is a citizen who does not have the status of an individual entrepreneur and is not on the staff of the enterprise

In such a situation, expenses qualify as the company’s labor costs, according to Art. 255 of the Tax Code of the Russian Federation , and are taken into account based on clause 21 of Art. 255 Tax Code of the Russian Federation .

The contractor is an individual entrepreneur who is not on the staff of the enterprise

Payments, according to a civil contract, in favor of persons who are individual entrepreneurs and with whom the enterprise does not have an employment relationship, are reflected as part of other expenses related to production and sales. All this is based on paragraphs. 41 clause 1 art. 264 Tax Code of the Russian Federation .

The performer is a full-time employee

The Ministry of Finance in its own explanations, that is, in the letter of the Ministry of Finance of the Russian Federation dated September 21, 2012 No. 03-03-06/1/495, dated August 19, 2008 No. 03-03-06/2/107, dated March 27, 2008 No. 03-03- 06/3/7, proposed to take into account such expenses as expenses associated with production and sales, based on paragraphs. 49 clause 1 art. 264 Tax Code of the Russian Federation .

Expenses under civil contracts must be consistent with the general provisions for the recognition of expenses contained in paragraph 1 of Art. 252 Tax Code of the Russian Federation . They need to be documented, have an economic justification, and be focused on generating benefits. Otherwise, the tax authorities will attempt to remove these expenses during control measures.

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