Taxes upon transition from Simplified Tax System to General Tax Regime

But in practice, there are also cases when the chosen tax regime ceases to suit the entrepreneur or he himself ceases to meet the criteria of a special regime. In this article, we will analyze the change of the simplified tax system to the General Tax Regime.

The regime change occurs for two reasons:

The first is when the taxpayer expands his business and voluntarily decides to switch. And secondly, when the company ceases to meet at least one criterion of the simplified tax system.

The responsibility for monitoring compliance with the simplified tax system criteria lies with the organization itself.

The new procedure for paying taxes for the company comes into force from the beginning of the quarter in which the transition to General Tax Regime took place.

New taxes after the transition for legal entities are:

• VAT;
• property tax;
• income tax.

It is also worth remembering that the transition to General Tax Regime will not be possible without VAT recovery.

This process should include two main points:

• assessment of tax on operations for the performance of work, the shipment of goods, the provision of services, carried out starting from the 1st day of the month when the application of the general regime was started;
• charging tax on advance payments received from counterparties of the new General Tax Regime payer.

At the same time, legal person is entitled to a VAT refund.

As soon as the company switches to General Tax Regime, it has an obligation to submit new types of declarations to the tax office - for income tax, for VAT, for property tax.

The process of transition to another taxation system requires compliance with certain rules and requirements, and also, as a result, leads to the complication of accounting and tax accounting.

Specialists of the law firm "PARITET" and "PARITET Audit" are ready to provide highly qualified assistance in supporting your business.

Our specialists have extensive experience in solving such problems, they are true professionals in their field.

We will help you arrange the transition in a timely manner, as well as verify the correctness of compliance with all requirements after.