Cancellation of registration (status) of a single tax payer

A certificate of a single tax payer is an extract from the register confirming that an individual entrepreneur or legal entity is on a simplified taxation system. That is, it pays a single tax.

If you are interested in consultation and legal support on tax law issues, including the procedure for canceling the registration of a single tax payer, you can seek help from the specialists of the law firm “Prikhodko&Partners“. The sphere of tax law is within the spectrum of our competence, so we provide high-quality services in which we have extensive experience.

Why is an extract from the state register needed?

Such an extract is needed not only when interacting with authorized state bodies, but also in the context of building business relationships with other participants in economic relations. Thus, providing a counterparty with an extract from the state registration, where the person is indicated as a single tax payer, makes it possible to avoid double taxation. When an entrepreneur receives income from another entrepreneur or legal entity, it is necessary to prove that the counterparty is a business entity. If this does not happen, it will be considered that the income is paid to an individual, so additional personal income tax will be required. Therefore, such an extract from the state register certifies that in economic relations the entrepreneur acts as a business entity, and not as an individual.

Who and under what conditions receives an extract from the register of single tax payers?

Individual entrepreneurs and legal entities that are single tax payers have the right to receive such an extract. For it, you need to contact the State Tax Service at the place of your tax address. The term for providing this extract should not exceed one working day from the date of receipt of the relevant request from the applicant. And if we are talking about those business entities that have submitted an application for the transition to a simplified taxation system, then here the State Tax Service representatives are allocated two working days from the date of receipt of the request.

Grounds for cancellation of the single tax payer certificate

Such cancellation will indicate that the taxpayer has ceased to be on the simplified taxation system. After that, he will be obliged to switch to the general system. Therefore, such a situation is possible after the following violations by the taxpayer:

• exceeding the maximum allowable level of annual income provided for in the simplified taxation system in accordance with the taxation group in which the taxpayer is;
• the presence of a tax debt that the taxpayer has for 6 consecutive months;
• carrying out those types of activities that are prohibited on the simplified system, as well as not specified in the register of the taxpayer;
• exceeding by the taxpayer the number of employees that is the maximum allowable.

In the event that the entrepreneur did not switch to the general system or did not know that he violated the conditions of being on the simplified system, the tax authorities may independently exclude him from the register of single tax payers. This is done based on the results of an inspection, during which the relevant violations were identified.

Such exclusion from the register of single tax payers occurs by decision of tax authorities from the first day of the month following the quarter during which the violation was committed. It is important to note that the Tax Code does not provide for a set form of a decision on the cancellation of the registration of a single tax payer. The general rule in this regard indicates that:

1. the decision must be provided to the entrepreneur in writing;
2. the document must be signed by the head of the State Tax Service;
3. the text must necessarily indicate the reasons why the registration of the single tax payer was canceled;
4. the terms within which the entrepreneur is notified of the exclusion from the register of single tax payers must also be indicated.

In practice, it often happens that tax authorities notify the taxpayer of the exclusion from the register only a few months after this exclusion occurred. Therefore, if you know that there are grounds for excluding you from such a register, it makes sense to independently check the information on this.

When a single tax payer returns to the general system, he will be forced to pay significantly higher taxes. Therefore, it is better to avoid the above violations that lead to this sanction from the tax authority. And if the cancellation of the registration of the single tax payer was groundless, you have the right to appeal this decision of the State Tax Service.

How is the cancellation of the registration of the EP payer appealed?

Such a decision can be appealed administratively (to the higher body of the State Tax Service) and in court. As practice shows, it is the judicial method of appeal, when a lawsuit is filed with an administrative court, that is more effective in many cases. So if you need legal support and services for representing interests in court in such cases, you can contact the specialists of the law firm “Prikhodko&Partners”.

During the initial consultation, we will carefully analyze your situation and then develop a plan for further action. To schedule an initial consultation, you can fill out the feedback form on our website and we will call you back.