Now we pay VAT on the simplified tax system?

From January 1, 2025, there will be changes to the Tax Code. Now prices will rise, and it will not be so easy for simplified people to pay taxes. Together with the financial director, we figured out what will change in 2025 and what businesses should do now.

Maria Balakireva, financial director and tax consultant of the consulting center, helped with writing the article Profdelo.

In short, the main changes that will affect business are:

• The simplified tax system limit will be increased to 450 million rubles and the increased rates will be cancelled: now more companies will be able to work on a simplified basis.

• The simplified tax system with income above 60 million will pay VAT.

• Income tax will increase to 25%.

• A progressive personal income tax scale is being introduced: the more a person earns, the higher the tax rate will be.

simplified tax system

The main changes concern businesses using the simplified taxation system or simplified taxation system. Simplification allows you to pay less taxes and submit fewer reports. The simplified tax system is suitable for almost all areas.

Now simplifiers do not pay VAT and income tax. This simplifies accounting. But there are limitations. To be simplified in 2024, revenue must not exceed 265.8 million. The company must have no more than 130 employees. For those with an income of more than 150 million and more than 100 employees, increased rates apply.

There are two types of simplified tax system:

• “Income” – tax from 1% to 6% on revenue. Increased rate 8%.

• “Income minus expenses” – a tax from 5% to 15% on the difference between income and expenses. Increased rate of 20%.

Rates vary by region.

What will change in 2025?

It seems that the good news is that from 2025, companies with an income of more than 265.8 million can be simplified. Now the limit is 450 million. They will also cancel the increased rates for those who exceeded the income of 150 million.

The bad news is that VAT will appear for companies with income of more than 60 million rubles per year.

How does it affect business?

Simplified people with an income of up to 60 million can relax. But the rest will have to choose:

• The preferential VAT rate is 5% for income from 60 to 250 million rubles and 7% for income from 250 to 450 million rubles. But no deductions.

• Regular VAT 10% or 20% with the right to deductions.

Deductions allow you to reduce the amount of VAT payable. For example, if a company bought a product for 100 rubles + 20 rubles VAT, and sold it for 200 rubles + 40 rubles VAT, it will pay only 20 rubles VAT to the budget.

What VAT rate should I choose for the simplified tax system?

The choice between a reduced rate without deductions and a regular rate with deductions depends on the business. Here you need to take into account suppliers and work model. For example, for manufacturing and resale, the regular rate with deductions is often better.

Let's imagine that Ivan owns a furniture factory. In a year he sells furniture worth 100 million rubles. But to make this furniture, he buys boards, nails, paint and other materials for 95 million.

Ivan is considering two ways to pay tax. The first method is simple: he pays 5% VAT on all sales. That comes out to 5 million rubles in tax.

The second method is more complicated. First, Ivan takes 20% of his sales – that turns out to be 20 million. But then he deducts the tax that his board and paint suppliers have already paid. This input VAT = 95 million × 20% ÷ 120% = 15.83 million. Ivan takes this amount away from his 20 million and receives 4.17 million rubles in tax.

The second method is more complicated. First, Ivan takes 20% of his sales – that turns out to be 20 million. But then he deducts the tax that his board and paint suppliers have already paid. This input VAT = 95 million × 20% ÷ 120% = 15.83 million. Ivan takes this amount away from his 20 million and receives 4.17 million rubles in tax.

The second method is more complicated. First, Ivan takes 20% of his sales – that turns out to be 20 million. But then he deducts the tax that his board and paint suppliers have already paid. This input VAT = 95 million × 20% ÷ 120% = 15.83 million. Ivan takes this amount away from his 20 million and receives 4.17 million rubles in tax.

At a preferential rate, Ivan pays 5% of all revenue. This turns out to be 3.5 million rubles in tax.

And with the usual one with deductions, Ivan must first pay 20% of the proceeds – that’s 14 million. But he can deduct the VAT he paid for the products and equipment: 10 million × 20% ÷ 120% = 1.67 million. As a result, he pays 12.33 million.

It turns out that for Ivan’s dumpling business, the preferential rate of 5% is 8.83 million rubles more profitable.

But here it is important to consider all taxes together – both VAT and income tax. This is the only way to understand which option is truly more profitable for business.

Perhaps, from 2025, some companies will be able to reconsider working with suppliers. Nowadays they often choose small suppliers without VAT – it seems cheaper. But let's see what this means in practice:

• Instead of one delivery from a large wholesaler, you have to collect goods from several small ones. This complicates logistics and can lead to delays. For example, you need 1000 units of goods, but a small supplier can only bring 200. You wait until the required volume is collected.

• Small suppliers often cannot guarantee stability of supply. Today they have goods, tomorrow they don’t. As a result, you may be left with empty shelves at the most inopportune moment.

• There are also problems with quality. Large suppliers usually have a well-functioning quality control system. For small ones – not always.

After the transition to VAT, some may find it more profitable to work with large suppliers who pay VAT. Yes, their prices are higher, but not by 20%. Often the difference is 10-15% because large players can afford to lower the base price. Plus, at a general rate of 20%, you can deduct VAT paid to suppliers.

So tax reform is a chance to replace small suppliers with larger ones. This way there are fewer problems with supplies and the product is more reliable. And the tax office will be happy – everything is clean and transparent. But this is taking into account that small suppliers will raise prices by 5-7% VAT.

Of course, this is not beneficial for everyone. If you produce or resell something, look towards regular VAT. If you provide services, most likely a reduced rate is your option. But there is no universal option and you need to consider it for your business.

For businesses on the verge of 60 million

Whether your business will pay VAT will be decided by its income in 2024. For businesses with revenues on the verge of 60 million it will be like this:

• If you earn more than 60 million, you will have to pay VAT in 2025. And it doesn’t matter how much you earn in 2025 – even if it’s less than 60 million, you’ll still pay VAT all year.

• And if in 2024 they earned less than 60 million, but in 2025 they exceeded this amount, VAT will have to be paid only from the moment they exceeded it.

It is not yet clear whether there will be any relief for such cases. Most likely, businesses will have to figure out how to cope with these changes themselves. Many may try to split the business:

True, the authorities provided for this possibility. An amnesty was recently announced for companies that previously separated their businesses to optimize taxes. This is a chance for them to start working completely legally without penalties for the past. And any new attempts to divide the business before the reform will look suspicious and attract the attention of the tax authorities.

Documents for simplified people: book of purchases and sales

If your income is less than 60 million, breathe out. And for those who start paying VAT, the rules become a little more complicated. If you are on a simplified basis, but still pay VAT, you will have to keep a sales book. The same applies to those who are exempt from VAT, but sometimes issue invoices without tax.

With a shopping book the situation is different. You don’t have to keep it if you don’t accept VAT as a deduction. Simply put, if you are exempt from VAT or apply reduced rates of 5% and 7%, you can forget about the purchase book.

But if you pay VAT at regular rates – 20% or 10% – then excuse me, you will have to keep a purchase book.

Income tax in 2025

If you are on the general taxation system (OSNO), then you relaxed early – the tax reform will affect you too.

Businesses on OSNO, unlike simplified ones, pay income tax. Profit is income minus expenses. Currently the tax is 20% of company profits. From 2025, this tax will increase from 20% to 25%. Now more money will go to the federal budget.

For IT companies, the tax will also change. Now they pay 0%. From 2025 they will pay 5%. This money will go to the federal budget.

Benefits to support business

A new benefit is the federal investment deduction.

Companies will be able to reduce the tax by half the cost of new equipment or software. Unlike the regional deduction, which works with the regional part of the tax – 17%, the federal one applies to that which will be 8% from 2025. Important: these deductions cannot be used simultaneously.

There is a limitation: per quarter you can use a deduction only within 5% of the tax base.

For example, your company bought new equipment for 1 million rubles. According to the new rules, you can reduce the tax by half of this amount, that is, by 500 thousand.

Let's say you earned 10 million rubles in a quarter. The tax to the federal budget on this amount will be 800 thousand (this is 8% of 10 million).

But there is a limitation: you can only use a deduction of 5% of your income at a time. In our case it is 500 thousand (5% of 10 million).

The following benefits cannot be used:

• Foreign companies, even if they are tax residents of the Russian Federation

• Participants in agreements on the protection and promotion of investments

• Banks and other credit organizations

• Manufacturers of excisable goods. These are those who make beer stronger than 0.5%, cigarettes, vapes.

It is beneficial to use the federal deduction if:

• There is no regional deduction in your region

• It allows you to save more than regional

• You plan to use the equipment or software for more than 5 years

• You have a group of companies and you want to distribute the deduction between them

But if you are thinking of selling equipment or software in the next 5 years, it is better to choose depreciation. With it, you will not have to return the money saved on taxes when you sell. We'll talk about depreciation benefits further.

Increasing the multiplying factor

From 2025, you can quickly write off the cost of some equipment and programs through increased depreciation. The multiplying factor increases from 1.5 to 2.

The multiplying factor can be used when you spend money on:

It works like this: for example, you bought a server for processing data with AI for a million rubles. Usually its cost would be written off over 5 years, at 200 thousand per year. With an increasing factor of 2, you can write off 400 thousand per year.

Why is this necessary? The more depreciation expenses a company has, the less income tax it pays. It turns out that in the first years you will save on taxes. However, later, when the server is completely depreciated, taxes will be a little higher. But the money saved now can be put to work and earn more.

This is beneficial for companies that buy modern equipment or programs related to artificial intelligence, purchase licenses for software and databases, or invest in R&D from an approved list. The state thus encourages investment in new technologies and developments.

Personal income tax in 2025

From 2025, they also decided to redraw the personal income tax. Personal income tax is a tax on personal income. The employer withholds it from the employee’s salary before disbursing the money in person.

Now most employees pay 13% personal income tax. If annual income exceeds 5 million rubles, then 15% is withheld from the excess amount.

From 2025 the system will change. There will be five levels of tax:

1. Up to 2.4 million rubles per year – 13% (as it is now for the majority)

2. From 2.4 to 5 million – 15%

3. From 5 to 20 million – 18%

4. From 20 to 50 million – 20%

5. More than 50 million – 22%

This means that for employees with an annual income of less than 2.4 million rubles (200 thousand rubles per month) nothing will change. And for highly paid specialists the tax burden will increase. The Ministry of Finance emphasized that this is a small part of the population:

These changes will not affect all income, but only that part that falls into a higher category. For example, if the salary is 300 thousand per month (3.6 million per year), then:

• From the first 2.4 million you will pay 13%

• From the remaining 1.2 million – already 15%

New personal income tax rates from 2025 will create more work for businesses, especially those who pay high salaries. Get ready to recalculate budgets and update contracts.

How to prepare for tax reform

Start by calculating your tax burden for the next year at different VAT rates. Remember that VAT is calculated on shipment, and income under the simplified tax system is calculated on receipt of money.

When you understand what's what, add VAT to the new price tags. Don’t forget to fix the new prices in additional agreements with partners, so that it won’t be excruciatingly painful later.

Last but not least, automate everything that moves. Documents, finances, warehouse – let the computer do the math for you. When you know at any time what you have and how much it costs, you can quickly change the range and prices, outperforming those who are still counting on their fingers. It is convenient to do this in MySklad.

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