Can a company employee be an individual entrepreneur?

Vladimir SKOKOV Partner of the law firm "Subscriber Consult"

Is it possible that an employer, having received a power of attorney from his former employee to use his individual entrepreneur, conducts million-dollar transactions through his account and does not pay taxes. And can a person who has given a power of attorney to use his individual entrepreneur end up having problems with the tax authorities?

The situation where a former employer, by proxy, turned over goods worth millions of rubles is quite real. Of course, the employer took advantage of the ignorance of the law and the gullibility of his former employee. A citizen for whom an individual entrepreneur issues a power of attorney is legally a continuation of the will of the principal. That is, everything that the attorney signs and does on behalf of the entrepreneur is formally considered to have been done by the principal himself.

In this situation, we can only advise the debtor entrepreneur to write a police report against his former employer. If you convince law enforcement agencies that the trade was actually carried out by the former employer, under the guise of an individual entrepreneur former employee in order not to pay taxes, then perhaps tax prosecution will switch to the actual organization of the former employer.

Is it legal for a person to work on staff and be an individual entrepreneur?

Yes, it's legal. This is the most common way to optimize insurance premiums and personal income tax for employees. A simplified individual entrepreneur can pay only 6% of turnover (instead of 13% personal income tax), and the individual entrepreneur always pays insurance premiums for himself once a year, and the amount of contributions is clearly lower than if they were paid by the employer as an employee.

Transferring employees to individual entrepreneurs is a tax risk for the employer. According to the tax authorities, the following facts are suspicious:

Employees are consistently fired, registered as individual entrepreneurs and enter into contracts with their former employer;

• The former employer constantly enters into the same contracts with the same contractors and individual entrepreneurs.
• Such agreements are usually concluded on long term or indefinitely;
• The organization enters into contracts with entrepreneurs who are already its full-time employees;
• The former employer enters into contracts with individual entrepreneurs en masse;
• U former employees The individual entrepreneur is the only client.

What problems may an employee encounter when he moves from staff to individual entrepreneur?

Legally, from the moment of signing a civil contract between the former employer and the newly created individual entrepreneur, the parties become equal - both carry out entrepreneurial activity. Labor Code The Russian Federation with all guarantees for the employee ceases to apply to the parties, the Civil Code of the Russian Federation and other laws begin to apply.

Accordingly, the individual entrepreneur cannot count on maternity leave, for annual paid leave, for sick leave, for compensation and benefits. Unlike an employee, you can say goodbye to an individual entrepreneur at any time by terminating a civil contract. To dismiss an employee (at least formally), the employer needs compelling reasons.

The simplest form of creating a legal entity in our time is a company with limited liability. However, in a number of cases, it may be necessary to change the organizational and legal form of an enterprise to an even simpler one, without forming a legal entity, that is, registration as an individual entrepreneur. And a logical question arises: how to transfer an LLC to an individual entrepreneur, is it possible to do this?

Advantages of an individual entrepreneur and possible reasons for converting from an LLC

Most people give preference to individual entrepreneurs, since such enterprises have fewer requirements and attention from fiscal services. Registration of an individual entrepreneur costs practically “pennies” - about 800 rubles. The form of entrepreneurship allows you to work on a simplified taxation system and prepare a minimum amount of accounting documentation.

In addition, a businessman may not plan to further develop the business, which exists in the form of an LLC, but also does not want to close it. In this case, the question may also arise as to how you can switch from an LLC to an individual entrepreneur.

What is LLC

Limited Liability Company - commercial enterprise with the formation of a legal entity and with the main goal of making a profit. Compared to the same individual entrepreneur, an LLC has a much higher status, and partners have more confidence in this organizational and legal form.

One participant can also create a company, this is not prohibited current legislation. Although, to open a legal entity, you will have to draw up a lot of documents, including the charter. The state registration fee is approximately 4 thousand rubles. The LLC founder will have to take care of maintaining accounting and tax accounting. In addition, you will have to generate and pay authorized capital, which should not be less than 10 thousand rubles. The upper limit is not limited and is determined statutory documents. Minimum size capital will have to be paid in cash. At the time of registration authorized capital must be at least ¾ full. Capital is a guarantee for third parties that in the event of bankruptcy or liquidation, the LLC will be able to pay off its debt obligations.

Legal requirements

The legislation does not provide for the possibility of transferring directly from an LLC to an individual entrepreneur. A limited liability company can only be reorganized into another legal entity. An individual entrepreneur is an individual, so reorganization is impossible.

Options for solving the problem

The question arises whether it is possible to switch from an LLC to an individual entrepreneur if the procedure is not provided for at the legislative level. In fact, if you follow certain rules, you can carry out a so-called reorganization without even attracting special attention from regulatory authorities.

How to transfer an LLC to an individual entrepreneur - procedure:

1. The founder is registered as an individual entrepreneur. To do this, you just need to submit an application in form P26001 and a passport with the applicant’s tax number. Pay the state fee and after 5 working days you will receive confirmation of registration as an individual entrepreneur.
2. Dismiss or transfer personnel from the LLC.
3. Re-register property.
4. Liquidate a legal entity.

Staff reduction

If the transfer of LLC employees to individual entrepreneurs is not planned, then the staff must be reduced. When deciding how to switch from an LLC to an individual entrepreneur, this cannot be avoided, and in order to avoid penalties being imposed, the entire procedure must be followed.

The Labor Code obliges the management of an enterprise to notify all personnel of the upcoming layoff two months before layoffs. To do this, you will have to draw up written notices and hand them over to all employees against signature. The basis for reduction in this case is the liquidation of the enterprise.

In parallel with informing employees, you will need to notify the employment service. After the expiration of the two-month period, the personnel are dismissed according to the standard procedure with the issuance of work book and carrying out full payroll calculations.

It should be remembered that if more than 15 employees are released at the same time, the reduction will be regarded as massive. In this case, the notice period is increased by another 1 month.

When liquidating an enterprise, you can fire everyone, even those who are on sick leave or on vacation.

And the most interesting thing is that the reduction procedure also includes the possibility of paying staff for 2 months after they quit, if the employees are not employed.

Transfer of employees to individual entrepreneurs

In this case regulations do not provide for the opportunity to directly transfer personnel, which must be taken into account before moving from an LLC to an individual entrepreneur. To begin with, employees are fired from the LLC and hired as an individual entrepreneur the next day. The procedure is standard and does not require additional explanation.

The main thing to remember is that in order not to attract the attention of regulatory authorities, you should not transfer all the staff in one day, especially if there are more than 15 employees.

Transfer of property

Perhaps this is the most sensitive part of the question of how to switch from an LLC to an individual entrepreneur. The easiest way, naturally, if there is only one founder and there are no claims from creditors, is to simply go through the liquidation procedure and receive all the property as an individual.

Another option is to sell or donate the most liquid property to an individual entrepreneur.

Sale of LLC

Alternatively, you can sell the business. Naturally, it will first be necessary to withdraw all assets and transfer them in favor of an individual entrepreneur or individual. If there is staff, then you will have to say goodbye to them and, if necessary, accept them into an open individual entrepreneur. Now you can put the LLC up for sale, or rather, transfer corporate rights to a third party for payment or to assign it free of charge. The only thing is that no activity should be carried out at the LLC, and the balance sheet should be empty, that is, in fact, you will have to prepare for the sale of the enterprise in advance. By the way, an LLC with a “zero balance” can be closed at the initiative of the tax authorities, but provided that the absence economic activity lasts at least 12 months.

Reverse situation

Along with how to switch from an LLC to an individual entrepreneur, many people are interested in the opposite question.

If we consider the terms, an individual entrepreneur is an individual. LLC is an organizational and legal form with the formation of a legal entity, therefore, there is no possibility of reorganization.

The transition from an LLC to an individual entrepreneur and vice versa is not provided for by current legislation, but there is always a way out, and not just one:

• close the individual entrepreneur and create a legal entity;
• become a participant in an existing LLC;
• without closing your individual entrepreneur, open an LLC and become its sole participant.

Common problems when re-registering

The most big problem, what most people forget before converting an LLC into an individual entrepreneur is what they have borrowed funds or other debts. But the liquidation procedure provides for a clear queue for satisfying claims.

Sequence of debt repayment:

• all claims to individuals that arose against the background of harm to their health or life are repaid;
• all arrears of wages are paid;
• repayment of debts to the state;
• satisfaction of the claims of all other creditors.

The most important thing is that until the claims of one queue are fully repaid, payments will not be made to other creditors. The only exception is that if the debt is secured by collateral, then borrowers have a priority right to repay debts, with the exception of persons in the first and second priority.

Another common problem is the presence cash in the hands of the founders, which were taken from the enterprise on account or as a loan. What to do in such a situation, is it possible not to return the funds? You can, but only in this case you will have to pay income tax from these funds, but what if we are talking about a large amount?

Situation

For tax optimization purposes, the company plans to register a number of workers as individual entrepreneurs (IP) and involve them under civil contracts (contracts, provision of services).

On the one hand, design employees entrepreneurs (IE) provides tax savings, since individual entrepreneurs can pay, for example, a tax under the simplified taxation system of 6% and mandatory contributions to funds (about 20 tr. per year), which gives a very large tax saving compared to ordinary deductions for an employee - payment of personal income tax of 13%, contributions to payroll funds, namely -insurance and savings contributions to the Pension Fund - PFR of Russia (Compulsory insurance) 26%, contributions to the Social Insurance Fund - FSS of Russia 2.9%, contributions to the Social Insurance Fund - insurance against industrial accidents and occupational diseases depending on the type of activity - from 0.2% and above, contributions to the Federal Medical Insurance Fund - MHIF of Russia 3.1%, contributions to the Territorial Medical Insurance Fund - TFOMS of Russia 2%. In total, the employer must pay at least 34.2% of the payroll.

On the other hand, this translation scheme employees in individual entrepreneurs (IP) is illegal, since it is actually aimed at tax evasion, which is fraught not only with additional taxes, but also with the use by law enforcement agencies of Articles 198, 199, 199.1 of the Criminal Code of the Russian Federation.

In order to dissuade people from using this tax scheme (employees - entrepreneurs), we will analyze its disadvantages.

Questions posed for research

What negative consequences for employees and for the company does the designated work scheme entail or may entail - employees are entrepreneurs (IE).

Study

Negative consequences for employees (IP):

1. The employer’s ability to unilaterally cancel the contract at any time, provided for by civil law.

Article 717. Refusal of the customer to perform a work contract

Unless otherwise provided by the contract, the customer may, at any time before delivery of the result of the work to him, refuse to fulfill the contract by paying the contractor part of the established price in proportion to the part of the work performed before receiving notice of the customer’s refusal to perform the contract. The customer is also obliged to compensate the contractor for losses caused by termination of the contract, within the difference between the price determined for the entire work and the part of the price paid for the work performed.

Article 782. Unilateral refusal to perform a contract paid provision services

1. The customer has the right to refuse to fulfill a contract for the provision of services for a fee, subject to payment to the contractor for the expenses actually incurred by him.

2. The contractor has the right to refuse to fulfill obligations under a contract for the provision of paid services only if the customer is fully compensated for losses.

2. The employer’s ability not to accept services/work performed in whole or in part and, accordingly, refuse to pay for them (Article 720, Article 723 of the Civil Code of the Russian Federation).

Civil Code of the Russian Federation

Article 720. Acceptance by the customer of work performed by the contractor

1. The customer is obliged, within the time frame and in the manner prescribed by the work contract, with the participation of the contractor, to inspect and accept the work performed (its result), and if deviations from the contract are discovered that worsen the result of the work, or other shortcomings in the work, immediately report this to the contractor.

2. A customer who discovers deficiencies in the work during its acceptance has the right to refer to them in cases where the act or other document certifying acceptance stipulated these deficiencies or the possibility of subsequently making a demand for their elimination.

4. A customer who, after acceptance of the work, discovers deviations from the work contract or other defects that could not be identified during the usual method of acceptance (hidden defects), including those that were deliberately hidden by the contractor, is obliged to notify the contractor about this within a reasonable time. time limit for their discovery.

5. If a dispute arises between the customer and the contractor regarding deficiencies in the work performed or their causes, an examination must be appointed at the request of either party. The costs of the examination are borne by the contractor, except in cases where the examination establishes the absence of violations by the contractor of the work contract or a causal connection between the actions of the contractor and the detected deficiencies. In these cases, the costs of the examination are borne by the party that requested the appointment of the examination, and if it is appointed by agreement between the parties, both parties equally.

Article 723. Contractor’s liability for poor quality of work

1. In cases where the work was performed by the contractor with deviations from the contract that worsened the result of the work, or with other shortcomings that make it unsuitable for the use specified in the contract, or in the absence of a corresponding condition in the contract of unsuitability for normal use, the customer has the right, if Unless otherwise established by law or contract, at your own discretion, require the contractor to:

elimination of deficiencies free of charge within a reasonable time;

a proportionate reduction in the price set for the work;

reimbursement of their expenses for eliminating defects, when the customer’s right to eliminate them is provided for in the contract

3. If deviations in the work from the terms of the contract or other shortcomings in the result of the work have not been eliminated within a reasonable period established by the customer or are significant and irreparable, the customer has the right to refuse to perform the contract and demand compensation for losses caused.

3. The employee is not entitled to vacation. Payment for sick leave depends on the terms of the contract. If the contract does not provide for a reduction in pay in the event of the employee’s absence, then payment must be made in the full established amount, regardless of the facts and illness, etc.

4. Moral aspect. Employee-entrepreneurs (IE) under contract agreements they feel unprotected and burdened with the submission of additional reporting.

5. The need to maintain and submit tax reports. Not every worker will be able to master this science and not every worker will go for it.

Negative consequences for the employing company:

1. Possibility of filing employee-entrepreneurs (IE) claims to recognize the relationship with the employer as labor, as well as filing complaints with the Rostrudinspektsiya about the illegal failure to formalize employment contracts with employees.

See in particular

Determination of the Supreme Court of the Russian Federation dated March 21, 2008 N 25-В07-27

The application regarding the recognition of the legal relationship between the plaintiff and the defendant as labor was granted, since the circumstances established by the court, indicate the existing labor relations.

Definition of Novosibirsk regional court dated December 20, 2011 in case No. 33-9543/2011

The claim for recognition of the contract as a labor agreement was satisfied, since there were established conditions between the parties labor relations, providing for the provision of guarantees of social security, insurance payments, ensuring working conditions, and compliance with internal labor regulations.

Ruling of the Sverdlovsk Regional Court dated February 14, 2012 in case No. 33-1804/2012

Ruling of the Sverdlovsk Regional Court dated January 31, 2012 in case No. 33-1060/2012

The claim regarding the recognition of the fact of an employment relationship was satisfied, since an actual employment relationship arose between the parties, which was characterized by personal performance by the plaintiff for a specific fee labor function landscaping master, their subordination to the current internal labor regulations, provision by the defendant certain conditions labor.

In addition to the court decision recognizing the relationship as an employment relationship, an administrative penalty may also be imposed.

Code of Administrative Offenses of the Russian Federation

Article 5.27. Violation of labor and labor protection laws

1. Violation of labor and labor protection legislation -

shall entail the imposition of an administrative fine on officials in the amount of one thousand to five thousand rubles; for persons carrying out entrepreneurial activities without forming a legal entity - from one thousand to five thousand rubles or administrative suspension of activities for a period of up to ninety days; on legal entities- from thirty thousand to fifty thousand rubles or administrative suspension of activities for up to ninety days.

2. Violation of labor and labor protection legislation by an official who was previously subjected to administrative punishment for similar administrative offense, -

entails disqualification for a period of one to three years.

2. Worker-entrepreneur may formally refuse to comply with the company’s local acts, since their effect does not apply to persons working under civil contracts.

3. Possibility of additional assessment of taxes by tax authorities based on the rates established for employees employment contract due to the pretense of the contractual relationship with employee-entrepreneur (IP).

See in particular

Resolution of the Federal Antimonopoly Service of the Volga-Vyatka District dated June 27, 2008 N A11-8961/2007-K2-22/483

The court came to the conclusion that the taxpayer had created a scheme aimed at evading taxes, and recognized the additional assessment of personal income tax and unified social tax as lawful. In this case, the court proceeded from the fact that the taxpayer provided services in the field of hotel business, retail trade, organization catering, provision of premises for rent; the number of taxpayer employees from 2003 to 2006 decreased from 193 to 26 people, but this did not affect the performance of all types of activities; Some of the employees who resigned in 2003 in order to register as individual entrepreneurs entered into agreements with the taxpayer for the provision of paid services; the taxpayer informed the employment center about available vacancies and indicated that applicants must have the status of individual entrepreneurs; prisoners with individual entrepreneurs contracts for the provision of paid services in their content were employment contracts, since they provided for the execution of specific job responsibilities for a long period of time, a certain regime of work and rest, financial responsibility; acts of acceptance and transfer of services rendered were drawn up in the same way as time sheets; in fact, under contracts for the provision of paid services, the taxpayer paid wages.

Resolution of the Federal Antimonopoly Service of the West Siberian District dated April 27, 2011 in case No. A27-6452/2010

Conclusion by an entrepreneur for the purpose of obtaining an unjustified tax benefit of contracts for the provision of services with previously dismissed individuals registered as individual entrepreneurs, but actually carrying out their job responsibilities, indicates the legality of additional assessment of insurance contributions for compulsory pension insurance and personal income tax.

4. For employees and entrepreneurs According to the contract, money is not supposed to be given out from the cash register for the needs of the “accountable” company.

The Supreme Court put an end to the case of creating a scheme to obtain unjustified tax benefits as a result of LLC concluding civil law contracts with individual entrepreneurs instead of formalizing labor relations. It is important that all courts agreed with the conclusions made by the tax authority based on the results of the on-site tax audit.

This case is interesting because the scheme created by the organization is very common in the economic activities of small and medium-sized businesses. Accordingly, with the support of the highest court, tax authorities will be more confident in following the presented approach when conducting all subsequent audits. Why should I be ready-made organizations and individual entrepreneurs?

As follows from the case materials, the LLC was audited by tax authorities for three years and brought to justice under Art. 120, 123, 126 of the Tax Code of the Russian Federation, and penalties were also assessed, the total amount of sanctions amounted to more than 1 million rubles. In addition, the organization is obliged to perform the functions of a tax agent for personal income tax - withhold and transfer tax to the budget from taxpayers’ income, make the necessary corrections to the organization’s accounting and tax reporting.

The courts found that significant violations of the procedure on-site inspection and the inspection was not allowed to consider its materials, the pre-trial procedure for resolving the dispute was followed.

The essence of the scheme used is simple and widely known: the organization, instead of hiring workers and concluding employment contracts with them, registered citizens as individual entrepreneurs and concluded contracts with them civil contracts for the provision of services. The details are as follows.

The main activity of the organization is the processing of waste and scrap of non-ferrous and ferrous metals (OKVED 51.57). The number of employees of the organization is one person - the director, others staffing units are missing.

In the period audited by the tax authority, the company entered into agreements with the individual entrepreneur for the provision of the following types of services:

• recycling of scrap metal (14 entrepreneurs);
• maintenance, operation of vehicles - truck crane (1 entrepreneur);
• accounting (2 entrepreneurs);
• conducting cash transactions (1 entrepreneur);
• logistics, cash transactions(1 entrepreneur).

Relations with counterparties were formalized by contracts for the provision of services for a fee, the performance of work (rendering services) - acts of completed work, payment of remuneration - cash receipts.

During the audit, based on the results of an inspection of the production base of the LLC, interrogations of the director and individual entrepreneurs, the tax authority established that individuals attracted under contracts for the provision of paid services, having the status of individual entrepreneurs, over a long period of time every day(except Sunday) provided their services during a full working day in accordance with the scrap metal reception schedule from 09:00 to 18:00 with a lunch break from 13:00 to 14:00. Workplaces were equipped for them in a separate room, the necessary office equipment was installed, software, special equipment.

These individual entrepreneurs did not carry out any other activities, and upon termination of the contract for the provision of services, they ceased their business activities and were deregistered.

All of these entrepreneurs used the simplified tax system with the object of taxation “income”. Tax reporting for them was presented centrally via telecommunication channels by the director of the LLC by proxy.

The court was also presented with protocols of interrogations of these entrepreneurs, in which they reported that the initiator of their registration as an individual entrepreneur was the director of the LLC, and this was a condition for concluding contracts for the provision of services.

Based on the results of the audit, the tax authority came to the conclusion that an employment relationship had actually developed between the LLC and the contractors working under paid service agreements. The courts emphasized: the tax authority concluded that the company had created a scheme for obtaining unjustified tax benefits not on the basis of separately established facts, but based on the results of an analysis of the circumstances discovered by the audit in their totality:

• contracts provide for the systematic performance of services with regular payment on the 1st day of the month following the month of provision of services;
• the subject of the contracts contains a clear indication of specialties and professions - accountant, cashier, logistics manager, as well as the specific type of activity entrusted to the employee - reception, sorting, storage, shipment of scrap metals;
• according to contracts, the accountant, cashier, logistician (cashier), foreman, mechanic is entrusted with financial liability for the shortage of property entrusted to them, as well as for damage incurred by the customer as a result of compensation for damage by other persons;
• all contracts provide for the provision of services in person;
• the amount of remuneration of each individual individual has not changed significantly or has not changed at all;
• all contracts with individuals were concluded for a calendar year or before the end of the calendar year; at the end of the calendar year or at the beginning of the year, all contracts were renewed.

From the above circumstances, the tax authority made a conclusion, which all courts agreed with: valid economic sense activities of entrepreneurs attracted by the society was the implementation labor activity as hired workers. This scheme is qualified by the tax authority as aimed at the LLC obtaining unjustified tax benefits by evading the duties of a tax agent for personal income tax (calculation of tax, withholding and transfer of tax within the time limits established by law).

FYI

In this case, we were talking only about personal income tax; the tax authorities did not check the completeness and correctness of the calculation of insurance premiums. If the audit had covered periods starting from 2017, then additional insurance premiums would have been charged, and accordingly, the amount of additional charges would have been significantly higher. By the way, the Pension Fund of Russia and the Social Insurance Fund checked this LLC before the tax authority and did not find any violations in the company’s activities when concluding service agreements.

Let us note the signs by which judges distinguish between an employment contract and a civil law one, for example, a contract agreement (Article 702 of the Civil Code of the Russian Federation) or a contract for the provision of paid services (Article 779 of the Civil Code of the Russian Federation). These civil law contracts are similar to an employment contract, since they involve the implementation certain activities or actions, but they are also characterized by significant differences:

• performance of work under an employment contract presupposes the inclusion of the employee in production activities organizations;
• the employment contract provides for the subordination of the employee to the internal labor regulations, his constituent element is the fulfillment of the employer’s orders during the work process, for improper implementation of which the employee may be subject to disciplinary liability;
• According to the employment contract, the employee performs work of a certain type, and not a one-time task from the customer.

The judges concluded that the name of the contract itself cannot be considered as a sufficient basis for unconditionally classifying the concluded contract as a civil or labor contract. Of decisive importance for the qualification of the contract concluded by the parties is the analysis of its content for the presence or absence of signs of a civil law or employment contract.

Thus, based on the results of the audit, civil law contracts with individual entrepreneurs were reclassified as labor contracts, the LLC was assigned the duties of a tax agent to withhold personal income tax from the income of entrepreneurs using the simplified tax system, and penalties were also imposed and penalties accrued.

However, the decision says nothing about the individual entrepreneurs themselves, the very workers who are now in quite a lot of trouble. difficult situation. Before the tax audit, reporting under the simplified tax system for entrepreneurs was submitted by the director of the LLC (of course, not himself, but his accountants). Accordingly, it can be assumed that the payment of taxes and insurance contributions to the Pension Fund for them was also carried out centrally.

Now, after an unsuccessful judicial appeal against the decision of the tax authority, these individuals still remain individual entrepreneurs, but the LLC must withhold personal income tax from the income paid to them. If an organization cannot withhold personal income tax because it will no longer pay any income, it will report this to the tax authority, which will itself issue a demand to individuals. At the same time, termination of individual entrepreneur status does not relieve individuals from tax obligations, in this case - for personal income tax.

One can, of course, ask the question: why should the results of the audit affect the individual entrepreneur if the audit was carried out in relation to the organization? The judges answered: an on-site tax audit was carried out in relation to the company, as a result of which it was concluded that an employment relationship had actually developed between the LLC and its counterparties under contracts for the provision of paid services. At the same time, individuals within the framework of events tax control interrogated as witnesses, the interrogation protocols comply with the requirements of Art. 90 of the Tax Code of the Russian Federation, witnesses are explained their rights and obligations provided for by the Tax Code of the Russian Federation, as well as the rights provided for in Art. 51 of the Constitution of the Russian Federation.

But what then to do with the amounts of tax paid in connection with the application of the simplified tax system for the audited periods? It turns out that individuals, as “simplified” persons, did not receive any income; all paid amounts of a single “simplified” tax are an overpayment, because the same income cannot be subject to both personal income tax and tax under the simplified tax system? The judges clarified that there is no double taxation in this case. Individuals are not deprived of the opportunity to clarify their tax obligations under the simplified tax system by submitting updated tax returns.

Thus, taking into account the decision made by the judges, individual entrepreneurs must pay personal income tax, submit updated returns under the simplified tax system and return the overpayment of the single tax (it is important not to miss the tax refund deadline). And if we take into account that, given this decision, the LLC represented by the director is no longer interested in them, then the real situation of these citizens is completely unenviable.