Optimizing the tax burden in entrepreneurial activity is a key priority for any business. The Tax Code provides broad concession mechanisms aimed at developing various sectors of the economy, supporting small businesses, and encouraging investments. However, practice shows that belonging to a certain category alone is not enough to benefit from these exemptions.
Against the backdrop of the current realities, when applying corporate profit tax incentives, several critical factors should not be overlooked:
1. Status is not enough; conditions must be met comprehensively: For example, to benefit from the 75% profit tax exemption applied to micro-business entities, the legal entity must not only hold the relevant status but also simultaneously meet requirements such as having an average monthly headcount of fewer than 3 employees and having no arrears on mandatory state social insurance contributions.
2. Segregation of activity types (Proper accounting): If an enterprise engages in both incentivized activities (e.g., agricultural production, software development as a technology park resident, etc.) and general commercial or other services, income and expenses must be accounted for separately. Automatically applying an exemption to all profits is an incorrect approach.
3. The boundary between production and trade in agriculture: The sale of products grown by farmers themselves is regulated differently for tax purposes compared to buying and reselling products from another party. Concessions primarily apply to direct production activities.
🔍 What should the sequence in accounting and financial planning look like?
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Assessing the enterprise's category of business entity;
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Verifying the requirements and restrictions stipulated by the legislation;
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Accurately segmenting incentivized and non-incentivized revenues and expenses;
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Monitoring average monthly workforce dynamics and the status of tax and social insurance liabilities.
When structuring your business’s tax planning, keeping track of legislative changes and regulating operations on a fully legal basis will minimize your financial risks.