VAT for companies applying the simplified taxation system in 2025

VAT for companies applying the simplified taxation system in 2025

Starting from 2025, companies and individual entrepreneurs using the Simplified Tax System (STS) will be recognized as VAT payers. Previously, such entities and entrepreneurs were exempt from VAT. However, they may qualify for an exemption or opt to pay VAT at reduced rates.

  • Automatic VAT exemption applies to all STS payers with 2024 income up to RUB 60 million and to organizations and entrepreneurs registered in 2025 that adopt the STS upon registration.
  • If an STS payer’s income exceeds RUB 60 million in 2025, they will be required to pay VAT from the following month, at either standard or reduced rates:
    • Reduced rates (without input VAT deductions):
      • 5% for income up to RUB 250 million.
      • 7% for income between RUB 250 million and RUB 450 million.
    • Standard rates (with input VAT deductions):
      • 20%, or
      • 10%.

If the reduced rate is chosen, it must be applied for at least three consecutive years.

 

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