First-time entrepreneurs will be exempted from taxes

The MEDT of Russia has drafted and escalated a proposal on the introduction of «tax holidays» for first-time entrepreneurs to the Government. Based on the results of its consideration it will be given an appropriate order to draft a bill. This action is the answer to an exodus of entrepreneurs from legal field, after a doubling of the premium rate.

According with the mentioned proposals, «tax holidays» will relate to individual entrepreneurs (IE), for the first time registered their business and using simplified or patent tax system. Such measure will be actual for 2 years since the moment of company’s registration and able to be used only once.

Today the IE use special tax treatments, there are some variants to choose: simplified system of taxation (6% from the turnover or 15% from the income), single tax on transitory income, PIT, VAT and patent system. By that, social due fees are paid by all regimes, and they will be saved anyway.

Because the introduction of such allowances is attended with some risks: for example, old companies will re-registered their business, then for testing of the risk minimization mechanisms and tracking of instances of fraud «tax holidays» are planned to be introduced like an experiment (for the period from 2014 to 2016) in some regions. By that, subjects-participants of the experiment will get the right to establish for this period a zero tax rate within the patent or simplified tax system regarding the first-time entrepreneurs. It is not decided yet, exactly which regions will take part in experiment, but Ulyanovsk, Kirovsk and Novosibirsk regions have expressed their wish yet.

However, some experts point out, that such allowance creates discrimination on the market, leaving those people deprived, who has already started up own business, but has not succeeded and wants to try again. Besides that, the mechanisms which will be used to expose the frauds, representing themselves as new entrepreneurs, are not exactly clear. It’s sure, it can be identified the affiliation, if desired, but in this case the allowance creates more reasons for suspicions, than for privileges.

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