Reduced rates of social taxes

Reduced rates of social taxes

 Certain companies that use simplified tax system (both 6% and 15%) have the right to apply pay social taxes at reduced rates in 2018:

 - Pension fund taxes - 20% (instead of usual 22%)

-  Social and medical fund taxes - 0% (instead of 2.9% and 5.1% respectively).

Reduced rates apply at following conditions:

- Annual revenue under 79 million rubles;

- At least 70% of total revenue should be related to activities listed in p.1 art. 427 of Tax Code (for example, production of clothing / textiles / soft drinks, IT services, various personal services, etc.)

If the company’s revenue exceeds the limit of 79 million rubles (even while keeping in line with the limit for the use of the simplified tax system, which is 150 million rubles in 2018), social taxes for the whole year are to be recalculated at standard rates. However, fines and penalties will not be imposed.