Organizations and sole proprietors applying the Simplified System of Taxation (SST) will be recognized as VAT payers from 2025 (para 1 of Article 143, paras 2, 3 of Article 346.11 of the Tax Code of the Russian Federation).

However, the obligation to pay VAT from 2025 arises if the income recognized in the tax accounting for the previous year exceeded 60 million rubles. If in 2025 the amount of income exceeded 60 million rubles, then VAT is calculated from the 1st day of the month following the month in which the excess occurred. SST payers determine whether the income threshold has been met using the cash method. If the threshold is met, there is no need to notify the tax service about VAT exemption. When exempt from VAT, you do not need to draw up VAT invoices (para 5, Article 168 of the Tax Code of the Russian Federation).

The VAT exemption for exceeding the income threshold is terminated on the 1st day of the month following the month of excess (para 5, Article 145 of the Tax Code of the Russian Federation).

With incomes from 60 to 250 million rubles, VAT will be paid at a rate of 5%, and over 250 million rubles at a rate of 7%. At the same time, deductions at such rates will not be applied (Articles 170, 171 of the Tax Code of the Russian Federation).

The special rate of 5% or 7% must be applied for at least 12 consecutive tax periods (quarters) in a row. Termination of the application of the special rate is possible ahead of schedule if:

• the income recognized in the tax accounting for the previous year does not exceed 60 million rubles;

• the income recognized in the tax accounting will exceed 450 million rubles (the right to the SST is lost and the transition to the general taxation system takes place).

How do you calculate VAT for contracts concluded before 01.01.2025?

If a Customer does not agree to amend the contract concluded before 01.01.2025 and pay the additional amount of VAT, then when executing the contract in 2025, it is necessary to assume that the contract price includes VAT (Letter from the Federal Tax Service of Russia dated 17.10.2024 N SD-4-3/11815@ “On sending Methodological recommendations”).

The amount of VAT is determined by applying an estimated rate in the amount of:

• 5/105 or 7/107 (when applying a special VAT rate),

• 20/120, 10/110 (when applying generally established VAT rates).

The amount of VAT determined by the SST taxpayer using the calculation method reduces the amount of income recorded for this operation for the purposes of the SST. If, when concluding an agreement with a Customer, the taxpayer assumes that at the time of the execution of the agreement the income will exceed the established limits, then at the conclusion of the agreement it is recommended to provide for a provision on the possibility of increasing the contract price by the amount of VAT.

Our contacts

info@awaragroup.com

+7 495 225-30-38 Moscow
+7 812 244-75-49 Saint Petersburg
+7 495 225-30-38 Tver