How to confirm the costs of IP

When submitting income data to the tax service, individual entrepreneurs must also confirm the costs associated with entrepreneurial activity in order to reduce income tax.

You will need

• - documents of expenses;

• - documents confirming the justification of expenses.

Instruction manual

1

To confirm the costs of individual entrepreneurship, contact the tax office at the place of residence and find out what documents need to be prepared. Before submitting documents of expenses to tax authorities, contact a familiar lawyer and find out if your expenses can be considered justified.

2

Also prepare documents on justification of expenses. Despite the fact that this is not always possible, collect the maximum number of documents in order to avoid problems in the future. For example, if you bought drinking water, then enclose a certificate from the State Sanitary and Epidemiological Supervision that the tap water does not meet the drinking standard to the purchase agreement.

3

Also remember that all expenses that you want to confirm must meet the criteria that are presented in Articles 221 and 252 of the Tax Code, namely: - expenses should be economically justified; - expenses should be related to activities that are aimed at generating income.

4

If you have to prove the economic viability of the costs, find a good lawyer. You should be aware that the concept of economic justification is not spelled out in any of the existing acts of Russian law, so this concept is subjective and a good lawyer will help you defend your case. So do not be afraid, even if you have not received any economic effect from your expenses: most often the courts reject the lawsuits of the tax authorities on this issue.

5

Know: the economic viability of expenses is not always determined by the fact that they are aimed at generating income. Sometimes it may be related to the need for the taxpayer, for example: - expenses for saving money; - expenses for improving the efficiency of managerial staff; - expenses that are related to the fulfillment of the contract, etc.

note

In accordance with the current legislation, you should choose only one of two possible ways to reduce income when calculating for the tax service:

- confirm the expenses documented;

- reduce their income by 20 percent.

Useful advice

If you cannot document expenses, you have the right to reduce your taxable income by twenty percent.