littleangels        English Nanny
Page 1 of 2 12 LastLast
Results 1 to 15 of 26

Thread: Consultancy / English Lesson Tax Rate

  1. #1
    rubyrussia is offline Users Awaiting Email Confirmation
    Join Date
    Mar 2011
    Location
    Moscow
    Posts
    952
    Thanked: 5

    Consultancy / English Lesson Tax Rate

    Hello,

    I am going to start the process for obtaining the Individual Entrepreneur's License (ИП).

    If I have a company that signs a contract with me for either consultancy or English lessons, what percent in tax should they pay the government? How do they pay the government?

    My understanding is after that amount, I should pay 6% in tax. How do I do that? I'm planning on opening that special bank account at Sberbank for all these transactions.

    Thanks for any help!

    Daniel

  2. #2
    Join Date
    Jun 2010
    Location
    Everywhere
    Posts
    1,786
    Thanked: 2
    The company which you invoice won't pay any tax to the government. You issue the invoice to them, and they pay you. It's the same as when a company orders a product or service from another company (eg. from a store).

    You will have to pay 6% "unified tax". There were also some changes to the social security laws during the past year, so I'm not sure if you will have to pay some social fund contributions as well. Maybe someone else knows. If you hired some employees under your IP entity, you would definitely have to pay social fund contributions on their behalf. I'm not sure if you as the IP proprietor are considered an employee yourself, or if your income is considered a dividend or some other form of drawings, in which case it would be exempt from employment-related taxes and contributions.

  3. #3
    Join Date
    Jun 2010
    Location
    Everywhere
    Posts
    1,786
    Thanked: 2
    Also remember that if you work through a company/IP entity, the company which you provide services is not bound by the employment laws. They don't have to provide you with holidays or any allowances for sick leave, strike action, transport problems, etc. If you can't provide the services as per the contract, they don't have to pay. It would be a good idea to put allowances in the contract for those situations.

    I guess if you can find an accountant or legal firm which is relatively well organised, they will have standard contracts for service-type businesses which cover all of the usual issues around notice periods for cancellations, payment terms, etc.

  4. #4
    Join Date
    Jun 2010
    Location
    Everywhere
    Posts
    1,786
    Thanked: 2
    And I found some more details about the social insurance contributions on Wikipedia:

    http://ru.wikipedia.org/wiki/Индивид...ль

    Отчисления на социальное страхование идут только исходя из МРОТ, взятого на начало соответствующего года (в виде фиксированного платежа), даже если деятельности не было

    Налоги и сборы ИП
    ИП обязан платить фиксированный платёж в социальные фонды вне зависимости от дохода. В 2009 году 7274.40 руб.[4], в 2010 12002.76 руб.[5], в 2011 16159.56 руб. Сумму налога при упрощенной системе налогообложения с объектом налогообложения доходы (в том числе по патенту) или ЕНВД можно уменьшить на размер этого платежа, но не более 50% от суммы налога.
    Систем налогообложения четыре, две как и у юрлиц: УСНО (упрощёнка), ЕНВД и две характерные только ИП: УСНО на основе патента и ОСНО (основная), характерная учётом дохода по оплате, а НДС по методу начисления.
    Сельскохозяйственные производители (главы крестьянского (фермерского) хозяйства, являющиеся ИП), имеют право применять единый сельскохозяйственный налог.

  5. #5
    Join Date
    May 2012
    Location
    ROV
    Posts
    33
    Thanked: 0
    I am doing the same and I know for sure that you have to pay 6% НДС (tax) but I am really considering to open OOO. In the beginning you have to pay more (something like 5.000 Госю Пош.) but in the end you have more ways of dealing with the ФНС (you can easily deduct a lot things from your annual tax payment).

    For the beginning I am now in the process of getting my ИП but I am planning after two month to open my OOO (first I need to earn some good white money to finance this). Pretty much it depends on how you are planning to deal with it in future. You are going to give just some classes and that's it - then ИП is what you want. You are going to make in a bigger style with corporate clients and maybe a few teachers working for you or you want to earn money in a big scale then you need OOO.

  6. #6
    Join Date
    Jun 2010
    Location
    Everywhere
    Posts
    1,786
    Thanked: 2
    The entity which you choose doesn't make much difference. Both can use the simplified system with the tax set at 6% on revenue or 15% on income, or the normal system with VAT registration, 20% profit tax and the more complicated accounting requirements. For a small business, I don't think you would want to use the normal accounting system because the bookkeeping requirements would be a burden in terms of cost and time.

    There's a summary of the differences here:

    http://www.acg.ru/english/russia_s_s..._of_the_system

  7. #7
    rubyrussia is offline Users Awaiting Email Confirmation
    Join Date
    Mar 2011
    Location
    Moscow
    Posts
    952
    Thanked: 5
    I'm working my way through the article that DavidB posted. Thanks. I see the six percent mentioned over and over. However, at the bottom of the page, there is a table that I don't quite follow.

    Does this mean that if you add up all of the taxes (Pension Fund Contribution 26%, Mandatory Social Insurance Contributions 2.9%, Mandatory Medical Insurance Contributions 5.1%, Single Tax 6%) it's 40 percent?

    Or Does it mean that they take all of those things out of the 6% that you pay?

    Ugh...
    Last edited by rubyrussia; 07-05-2012 at 14:44.

  8. #8
    Join Date
    Jun 2010
    Location
    Everywhere
    Posts
    1,786
    Thanked: 2
    The way it works is that you pay 6% tax on your total invoices (the amount your clients pay you).

    You also have to pay a fixed amount each year, which is somehow linked to the minimum wage. The rate in 2011 was 16159.56 rub. and you can pay it quarterly together with your tax filings. The details are in Russian in my post #4.

    I think what the table refers to is the social/medical/pension taxes for employees of the company.

    If have employees, one way to reduce your taxes further would be to adopt a business model where your teachers register as individual entrepreneurs and charge you for their teaching services. In that case, it may be better to use 15% of profit as the tax, because you could also include rent, electricity, admin staff wages, etc. as expenses.
    Last edited by DavidB; 07-05-2012 at 16:14.

  9. #9
    rubyrussia is offline Users Awaiting Email Confirmation
    Join Date
    Mar 2011
    Location
    Moscow
    Posts
    952
    Thanked: 5
    DavidB, certainly glad you are on this forum. It seems you've done a lot more business over here than anyone else.

    Thanks again.

  10. #10
    Join Date
    Jun 2010
    Location
    Everywhere
    Posts
    1,786
    Thanked: 2
    I don't know about doing more business than others, but it probably helps that I'm in the business of avoiding taxes. That was half the reason I moved to Russia.

  11. #11
    rubyrussia is offline Users Awaiting Email Confirmation
    Join Date
    Mar 2011
    Location
    Moscow
    Posts
    952
    Thanked: 5
    Lol. And the other half???

  12. #12
    Join Date
    Jun 2010
    Location
    Everywhere
    Posts
    1,786
    Thanked: 2
    There are many of them. Let's just say that Russia is the world's sexiest tax haven.

    But more seriously... I prefer seasonal climates and all of the other tax havens except Switzerland and Slovakia are tropical. I tried living in Slovakia for a couple of years, but found life there to be slow and dull. It's a nice country, but just too small and slow-paced for me. After that, I came to Russia and have enjoyed it ever since.

  13. #13
    Join Date
    Oct 2011
    Location
    Moscow
    Posts
    127
    Thanked: 0
    Hi David,

    Do you havbe any tips on avoiding taxes?

    Also, any tips on getting money out of Russia without a Russian bank account?

    Quote Originally Posted by DavidB View Post
    I don't know about doing more business than others, but it probably helps that I'm in the business of avoiding taxes. That was half the reason I moved to Russia.

  14. #14
    Join Date
    Jun 2010
    Location
    Everywhere
    Posts
    1,786
    Thanked: 2
    Quote Originally Posted by LondonYvonne View Post
    Hi David,

    Do you havbe any tips on avoiding taxes?

    Also, any tips on getting money out of Russia without a Russian bank account?
    Your post is a bit light on details, but I think I know what the situation is: you have cash in Moscow and you wish to deposit it somehow in your bank account in London. However, you don't like the idea of paying "bank fees", so you're looking for a way to get the money there without using a bank.

    The most obvious way would be to take the cash with you across the border. You're allowed to take 10000 euros without a declaration.

    Another option would be to find a friend who has the same problem in reverse. I.e. they would like to transfer money into Russia and would also like to avoid the problems associated with "bank fees." Let's assume that your friend has 10000 pounds in her bank account in London, and you have 485500 rubles cash in Moscow. You would give her the cash, and at the same time she would make an electronic transfer for 10000 pounds to your account. Both parties got the money to where they wanted it to be, and at the same time avoided all of the problems associated with "bank fees."

    And that's how you run a laundromat.

  15. #15
    Join Date
    Oct 2011
    Location
    Moscow
    Posts
    127
    Thanked: 0
    Hi David,

    Thanks for the info, do you have a link to the 10,000 EUR rule? Other sources say $3000 USD. 10,000 EUR = 8,064.97 GBP, which seems more reasonable





    Quote Originally Posted by DavidB View Post
    Your post is a bit light on details, but I think I know what the situation is: you have cash in Moscow and you wish to deposit it somehow in your bank account in London. However, you don't like the idea of paying "bank fees", so you're looking for a way to get the money there without using a bank.

    The most obvious way would be to take the cash with you across the border. You're allowed to take 10000 euros without a declaration.

    Another option would be to find a friend who has the same problem in reverse. I.e. they would like to transfer money into Russia and would also like to avoid the problems associated with "bank fees." Let's assume that your friend has 10000 pounds in her bank account in London, and you have 485500 rubles cash in Moscow. You would give her the cash, and at the same time she would make an electronic transfer for 10000 pounds to your account. Both parties got the money to where they wanted it to be, and at the same time avoided all of the problems associated with "bank fees."

    And that's how you run a laundromat.

Page 1 of 2 12 LastLast

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •