What is the essence of a simplified tax system

The essence of the simplified taxation system is to establish only two objects of taxation, fixed tax rates, ease of tax calculation and payment. At the same time, organizations and entrepreneurs are exempted from other types of taxation with rare exceptions.

A simplified tax system usually involves a significant reduction in the costs of the organization, the entrepreneur with small and medium volumes of activity. You can switch to this system if its conditions are met immediately after registering a company or entrepreneur with a tax authority, before each regular tax period (calendar year). The taxable object is chosen by each independently, in this capacity it may appear in the first option - income received, in the second - income reduced by the amount of expenses. The established tax rate directly depends on the selected object. So, in the first case, the indicated rate will be set at six percent, in the second - at the level of fifteen percent.

What are entrepreneurs exempted from in the simplified tax system?

Organizations that have chosen a simplified taxation system receive certain advantages, as they are exempted from the obligation to pay taxes on the profits of organizations, value added, and property of organizations. Entrepreneurs who use a similar system are also exempt from personal income tax, value added taxes, property of individuals. At the same time, this system does not exempt from the obligation to pay other types of taxes, to fulfill other obligations related to doing business, paperwork, reporting.