How to reduce the risks of tax claims from the sale of applications and content?

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Developers of mobile applications, games, authors of various content, musicians and writers of all genres - everyone can put their electronic products on Google Play, Google Music, App Store, iTunes Store, etc. (hereinafter referred to as platforms).



It is wonderful when talented people have the opportunity to present works of their creativity to the attention of the general public. Moreover, we can say that without any edition, except for such prohibited content.



In this sense, the freedom of creativity in our time, for the most part, is appreciated by the mass user quickly enough. Another thing is that the displays of these products can take place in different ways. But the marketing topic is separate and is outside the scope of this article. Here I would like to talk about what tax duties arise for mobile developers and content authors.



After receiving the payment by the buyer, any creator of the electronic product or service must calculate the amount of tax to be paid from this revenue and pay it within a certain period of time. And here there are problems due to the fact that tax legislation is too confusing and constantly changing. Let's try to collect the main problems and solve them easier.



The first thing you need to realize is that Google and Apple, as the two main platforms, are your middlemen. This means that the amount of their commission is included in the total amount of your income. This is crucial in calculating tax.

For example, if you received 100 rubles for an application, a book or a music track on your account, then the amount of the platform commission would usually be 30 rubles. In this case, your taxable revenue should not be 100, but 130 rubles, because it was from her that you gave the commission agent 30 rubles. Accordingly, you should calculate the tax precisely from 130, and not from 100 rubles.



If you are a private person and not an individual entrepreneur (hereinafter - IP), then your personal income tax (PIT) should be 16.9 rubles, and not 13 rubles, as everyone usually thinks, based on the actual income received.



The difference in revenue of 100 rubles is not big, but if we talk about relative figures, then you did not pay 30% of what you would have to pay to the budget.



Not all beginning authors and developers pay personal income tax for electronic goods. And if they pay, then most often only with the actually received money. But, the law is the law, and you need to know why you can be brought to tax liability.



If you are an individual entrepreneur, then in addition to income tax, you will have to open a separate current account, the cost of servicing which, as a rule, is more expensive than the cost of an account for an individual.



Move on. Google pays only in USD, i.e. You will also need to open a foreign currency account, which is also not free.



Apple can pay in rubles if you choose this in the settings, but will do the conversion at its own rate. And here lies the second danger.



The fact is that you must determine the tax base based on the rate of the Central Bank of Russia (CBR) on the day of receipt of revenue from the buyer of your product.



But, you actually receive other amounts, and not on the date when the payment was made by the buyer, but after a certain period.



For example, the Apple Store does this within 45 days after the end of the month in which the payment was made. Accordingly, all exchange rate differences between the rate of conversion of Apple and the rate of the Central Bank are your currency risks, which can greatly change the tax base.



Here, in practice, few people accrue personal income tax based on the rate of the Central Bank of the Russian Federation. Everyone just takes the ruble base, and without taking into account the commission, and they pay - 13%.



From the point of view of a legal reduction in taxation and taking into account social payments of mandatory medical insurance (6'884 rubles in 2019) and general social insurance (29'354 rubles), it will be advantageous to switch to an individual entrepreneur with a simplified taxation system (STS) under the system “Income: 6% "



But, optimally this needs to be done when the revenue reaches more than 280 thousand rubles during the year, because Until this time, it is more profitable to remain an individual because of the mandatory part of payments to the FIU and the FSS. Those. when you have reached this limit, you need to decide: either switch over and pay social benefits this year, or forecast your revenue for next year and switch over already in order not to pay too much.



The transition to the status of a legal entity must be carried out if you work not alone, but with the involvement of investors, partners, hiring employees, freelancers, concluding business contracts, i.e. conduct active business activities. In this case, from the point of view of tax legislation, you are required to register as a legal entity, regardless of your desire and revenue.



It is also worth remembering that when you reach 300 thousand rubles, you need to pay social funds another 1% of all amounts that exceed this threshold. Total, the total tax burden on your income will tend to 7%. However, this is also not infinite, and after reaching an annual revenue of 120 million rubles, you automatically switch to the usual system of taxation of legal entities with all the resulting tax burden and reporting.



After changes in the currency control of the Russian Federation from 03/01/2018, Russian banks, as agents of currency control, cannot require a transaction passport to be issued for all currency funds received in your accounts. But, upon reaching a revenue of 200 thousand rubles, the bank may request a contract that does not actually exist on online platforms. Practice shows that it is enough for banks to get screenshots of your accounts in the App Store and Google Play with the reflection of the accrued commissions.



By the way, despite the fact that the Apple Store will pay you in rubles and has a Russian branch, you will still have to deal with currency control by a Russian bank, as Your agent is a foreign company. This means that you will also require documents for incoming payments after reaching the threshold of 200 thousand rubles.



There is also an opportunity for residents of the Moscow region, Kaluga region and Tatarstan to obtain self-employed status and pay instead of 13% PIT 6% tax on professional income (NAP). The rate is such because the funds will come to your account not from individuals, but from your agent, a legal entity.



In the status of self-employed, you will not be required to pay insurance payments to the PFR and the FSS, thereby reducing your total load to 6%, which is nice.



Moreover, there is also a tax deduction of 10 thousand rubles, which is issued once and indefinitely, until this amount is over. Those. until you receive revenues of 167 thousand rubles, you will not have to pay anything to the budget using this tax deduction.



Unfortunately, this does not threaten the residents of the rest of Russia, because A pilot project in these regions was announced until 2028. However, everything can change, and without our knowledge.



For example, there is no explanation, if you sell the application to residents of Moscow or Tatarstan, will this be considered the fact that you conduct activities in their territory?



Accordingly, can you, while in Nizhny Novgorod, apply for the transition to the NAP? The Federal Tax Service has not yet answered this question. Perhaps clarifications are being prepared on this subject.



There is a restriction in the status of a self-employed that concerns the prohibition of hiring employees and working under an employment contract. Those. you must produce something yourself and sell it as a product or service, without involving workers.



Also, if your revenue becomes more than 2.4 million rubles per year (200 thousand rubles per month), then the special regime of a professional employee is canceled, and you will be required to register an individual entrepreneur. It also makes sense to immediately apply the simplified tax system (6%).

Thus, if you are a resident of these regions, then the NPA will be the most favorable tax status.



If you work in other regions, then you will need to switch to the same IP mode much earlier - starting from revenue of 280 thousand rubles.



All this of course makes sense only if the taxable revenue is correctly determined taking into account the above errors.



Upon reaching annual revenues exceeding 120 million rubles, it makes sense to think about a foreign company and a foreign account.



Here you will already need to look at the geography of your sales and, depending on it, select a country and a foreign bank or payment system to accept payments.



Optimal options are possible with less taxation and a complete lack of currency control, which makes this path interesting, but requiring significant costs at the initial stage.



However, if we are talking about investment projects, then perhaps a foreign company will not be superfluous at the very beginning of your activity, as it is here that the same cash-flow will be generated, which is often a sign of growing demand for your product and is highly appreciated by potential investors.



From this point of view, the most optimal way to develop a situation with a new product is to test its prototype, being in the status of self-employed or IP. Then, with a steady increase in revenue, register a foreign company to obtain a certificate of demand.



And then plan to enter the accelerator, or independently attract investment financing of your project.



In order not to have to report to the fiscal authorities on the activities of a foreign company you control, it is recommended to register it in those countries that have not joined the automatic exchange of financial information, or refused such an exchange with the Russian Federation.



As of September 2019, these are the United States, United Kingdom, the Isle of Man, Jersey and Guernsey. It is possible that Gibraltar and Canada will also join this denial.



Instead, you can spend more than 183 days outside of Russia in order to lose the status of a currency resident, but this will require even greater expenses for living abroad. Although this is possible it will just be the beginning for the development of our own international business project, as serve as a good incentive to move faster than in comfortable, home conditions.



A call is always good for strong and smart people, because it enhances their capabilities and speed of achieving goals.



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