What are the main changes to the new edition of the Tax Code? The State Tax Committee presented questions and answers.

Question: The tax reform pursued 3 tasks – reducing the tax burden, simplifying taxation, and improving tax administration. Does the new edition of the Tax Code fully comply with these criteria?

Answer: The revised Tax Code takes these aspects into account. Let’s look at them separately.

Tax burden reduction:

Firstly, excess VAT, the so-called “negative balance”, will be fully refunded, VAT on fixed assets and real estate will be taken into account at a time.

Secondly, the single social payment is set at 12% (previously it was 25%) for all enterprises, except budgetary organizations.

Thirdly, the amount of tax paid by individual entrepreneurs has been reduced, on average, by 30%.

About tax simplification:

The revised draft Tax Code reduces the number of applicable taxes from 13 to 9.

Individual entrepreneurs are allowed to choose tax regimes.

In particular, they can pay taxes in a fixed amount or based on the declaration of the total annual income of an individual.

Improving tax administration:

Forms of tax control were reduced from 13 to 2.

The procedure for assigning inspections is changing, inspections will be appointed without the influence of the “human factor” based on the conclusion of the “Risk analysis” program, which will subdivide taxpayers into 3 segments.

Tax authorities will now apply fines only after preventive measures.