How to switch from a simplified system to a system with VAT

An individual entrepreneur can make the choice of the applicable tax system directly at the time of registration of the enterprise. However, in the course of business, it may be necessary to switch from one system to another. For example, from "simplified" to the general system or to UTII. How to make the transition correctly so as not to break the law and not harm your company?

Instruction manual

1

Determine how appropriate it is for your company to switch from a simplified taxation system to a system with the payment of value added tax. With this transition, the company loses some of the advantages that make it easier to keep records and make tax deductions. The transition to a common system may also require bringing relations with suppliers (contractors) in line with it.

2

Having made the decision to switch from “simplified” to another type of tax payment, determine whether it is advisable to do this on your own initiative or you can use the provisions of the law that automatically transfer the company to a common system. In the first case, the entrepreneur has great freedom to change the tax system.

3

If you plan to switch to a common system as you wish, choose the right time for the transition. The entrepreneur has no right to do this before the end of the current tax period. It is necessary to work out the whole tax period for “simplification”, and then, before November 30 of the current year, submit a notification to the tax authority at the place of registration of the decision to switch to a different taxation regime. In this case, the transfer to the common system will be made from January 1 of the next year.

4

The transition from “simplified” to the general taxation system can also be applied without the desire of the entrepreneur. Be prepared for this, for example, if, according to the results of the reporting period, the company's income exceeds 20 million rubles. Or when the residual value of fixed assets of the taxpayer organization is higher than 100 million rubles. An automatic transition will occur from the beginning of the quarter in which one of the above parameters was exceeded.

5

If the income of your company has exceeded the above indicators, within 15 days from the end of the reporting period, inform about the transition to the general taxation system in the appropriate tax authority yourself. To do this, use the special form for notification of the loss of the right to use "simplified".

6

When switching from a simplified system to a different taxation regime, keep in mind that, if necessary, the reverse transition to a “simplified system” can be completed no earlier than a year after the loss of the right to use STS.