taxation of sme
DESCRIPTION
Taxation of small and medium businessesTRANSCRIPT
Taxation of SMEs
JOB CREATION
ECONOMIC GROWTH
DYNAMISM
importance
SME
SME 95 % 99 %= to
various criteria of size…
TURNOVER
# OF EMPLOYESS
CAPITAL BASE
PROFITS
IMPORT/EXPORT
employee numbers are not the sole defining criterion
…non-subsidiary, independent firms which employ less than a given number of employees.
World Bank (2004)
EU (Commission Recommendation
2003/361/EC)
Micro10 or fewer employees,
assets no more than USD100,000
10 or fewer employees and balance sheet total of no more than EUR 2m
Small
10 to 50 employees, turnover and assets
between US$100, 000 and US$ 3 m
10 to 50 employees, and annual turnover and/or balance sheet total of
less than EUR 10m
Medium
50 to 300 employees; turnover and assets
between US$3 to 15 m.
20-250 employees and turnover and/or annual
balance sheet of EUR 10-50m
The World Bank and the European Commission define:
Characteristics MICRO SMALL MEDIUMNumber of taxpayers
Very numerous Many Moderate
Type of taxpayers
Individuals, family owned businesses
Family owned business with some employees; highly specialized self-
employers
Legal entities with several employees,
partnerships
Ownership structure
Owner, employee(s) and manager are one
and the same
Owner(s) are generally the
manager
Owner is usually different from
managers
Type of transactions
Mainly cash; high informality
Cash/bank; some informality
Bank; much more formality
Place of business
Frequently non-fixed
Fixed (but may be volatile)
Fixed
Business administration
Non-professional (family-run)
Some professional assistance
Regular professional advice
Accounting Standards
No or few records; very limited
understanding
Some records, limited to partial
compliance; limited understanding
Partial to good compliance and record keeping
Market reach Local Local/regionalNational/
International
Life-span of business
Very dynamic; rapid creation and
dissolution
Dynamic; may disappear, stay
small of grow
More stable (consolidated)
business activities
Characteristics of Micro, Small, and Medium Enterprises
THE CODE No. 99-IV OF 10TH DECEMBER 2008 OF THE REPUBLIC OF KAZAKHSTAN CONCERNING TAXES AND OTHER OBLIGATORY PAYMENTS TO THE BUDGET as of Jan, 01, 2012
standard
Chapter 61
TAX CODE
§ 1
§ 2
§ 3 The Special Tax Regime on the Basis of a Simplified Declaration
The Special Tax Regime on the Basis of a Patent
General provision
SME Taxation
THE SPECIAL TAX REGIME FOR SMALL BUSINESS ENTITIES
Individual
income
SocialCorporate
income
Article 427: simplified procedure for the assessment and payment of..
1. the general established procedure;
2. the special tax regime on the basis of a patent;
3. the special tax regime on the basis of a simplified declaration.
standard
Article 428, p. 3
legal entities having affiliates, representations
affiliates, representations of legal persons
taxpayers having other separate structural units and (or) taxable items in different populated areas
legal persons in which the share participation of other legal persons is more than 25 percent
legal persons whose foundation party is also a foundation party of another legal person, using a special tax regime
Article 428, p. 4
Excisable good
Legal
Lotteries
Subsurface use
Ferrous metals
Glass container
Oil products Consulting
Accounting
Financial
Excisable good 1
Oil products 2
Lotteries3
Subsurface use4
Glass container5
Ferrous metals6
Consulting7
Accounting8
Financial9
Legal10
components
14
5scom
§ 2 The Special Tax Regime on the Basis of a Patent
do not use employed manpower;
carry on business in the form of personal entrepreneurship;
income of which for the tax period does not exceed the 200-times minimal amount of wages established by the law concerning the republic's budget and that is in effect on the 1st January of the appropriate financial year
Computation of the price of a patent shall be carried out by way of applying a rate of 2 per cent to taxable item. The price of a patent shall be paid to the budget as follows:
Computation of the Price of a Patent
Tax FormulaIndividual income
in an amount of ½ of the patent price
Social
in amount of ½ of the patent price, less social assessments computed in
accordance with the law of the Republic of Kazakhstan “Concerning Obligatory
Social Insurance”.
§ 3. The Special Tax Regime on the Basis of a Simplified Declaration
in the case of individual entrepreneurs: maximum average payroll number of employees for a tax period is twenty-five persons, including the individual entrepreneur himself; maximum income for a tax period is 10 000,0 thousand tenge;
in the case of legal persons: maximum average payroll number of employees for a tax period is fifty persons; maximum income for a tax period is 25 000,0 thousand tenge.
Calendar quarter shall be recognised as tax period.
Assessment of taxes on the basis of a simplified declaration shall be carried out by the taxpayer independently by way of applying to a taxable item of the rate in amount of 3 percent for the reporting tax period.
Total taxes assessed for a tax period in accordance with paragraph 1 of this Article shall be subject to adjustment towards reduction by amount of 1.5 per cent of total tax per each employee, based upon the average payroll number of employees, where the average monthly wages of employees upon the results of the reporting period reached not less than 2-times for individual entrepreneurs, not less than 2.5-times for legal persons, minimum wage
Assessment of Taxes in Accordance with the Simplified Declaration
PAYMENT OF TAX
1. DeliveryTax payment allocationIn that respect, personal (corporate) income tax shall be subject to payment in an amount of ½ of the assessed amount of tax on the basis of a simplified declaration, social tax in an amount of ½ of the amount of tax assessed on the basis of a simplified declaration, less total social assessments to the State Fund for Social Insurance.