KBK personal income tax in 2021 for legal entities

2024 Author: James Gerald | [email protected]. Last modified: 2023-12-17 14:00

In the third decade of May 2020, the Ministry of Finance of Russia submitted for discussion a ready-made draft of changes in the list of the personal income tax CBC, planned for use in 2021 and in two more years of the economic triennium. They are intended not only for legal entities: changes and decryption affected all levels.

Scope and importance of the codes used

The official website of the Federal Tax Service invariably publishes budget classification codes used in Russia to differentiate types of budget revenues, with separate subsections:

• for legal entities;
• individuals;
• individual entrepreneurs administered by tax authorities.

To get acquainted with them and receive advice, electronic services are provided. With their help, you can contact the Federal Tax Service of the Russian Federation, find out the payment details or the address of your territorial office.

The first appearance of the abbreviation KBK was recorded in July 1998, when Federal Law No. 145 was adopted, which introduced these forms of grouping of funds coming to the budget, and fixed the terminological concept in the Budget Code. In 2020, some codes worked, in 2021, the changes provided for by the project approved in June last year begin to operate.

The Ministry of Finance adopts new codes for budget classification in order to:

• further streamlining of financial statements;
• ensuring a unified form of providing information in the areas of budget, finance and analytics;
• drawing up and regulating financial flows at the federal and municipal levels;
• comparing the dynamics of expenditures and revenues and obtaining information on the current situation with the state budget.

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Any codes consist of numbers, divided into groups with hyphens, each of which denotes different information:

• direction of funds;
• administration;
• type of income;
• program and economic classification (for example, personal income tax, VAT, provision of services or forcibly withdrawn funds (fines and penalties)).

The correct introduction of the 20-digit BCC is a prerequisite not only for legal entities, but also for all taxpayers, ensuring timely delivery to the correct address. If an erroneous or outdated code is entered, the funds are frozen, while the fiscal authorities consider the payment not made and can charge absolutely legal fines for this.

Why is there a change of codes

Any change in the public sphere - new directives, reformatting of levels of government, innovations in the field of taxation - necessitate transformations in the codes of budget classification.

Although some taxpayers are sure that this is done with the aim of filling the budget with fines or using misdirected funds for various purposes.

All that is required to avoid misunderstandings is to timely find information about new codes before filling out the declaration and check the correctness of the numbers before making a payment. In 2021, laws and regulations came into force dictated by the difficult economic situation caused by the coronavirus pandemic.

At the same time, the Russian Government did not stop the action of new social and financial programs aimed at improving the welfare and level of provision of the population, planned for the economic three years - from 2021 to 2023.

What codes are needed to pay personal income tax

Personal income tax payment is a prerequisite for legal entities. For its implementation, it is envisaged to introduce new BCCs from January of this year, which presumably will operate until December 2023. For legal entities, it is mandatory to clarify new codes for the following categories of payment documents:

• Personal income tax for employees for whom they are a source of income provided not only for LLCs and JSCs, but also for entrepreneurs who have employees;
• three separate codes for this payment are reserved for the payment of interest, penalties and fines in case of arrears;
• to pay their income, if we are talking about an individual entrepreneur acting as a legal entity (he also pays tax on other income);
• budget classification codes for dividend payments and for those who work on patents.

The nuances of calculating each payment are known to both accountants and business leaders, but in 2021 they have undergone some changes.

A rate of 15% has appeared for those who earn more than 5 million rubles a year and employ more than a hundred workers. This will make changes (in some cases) to the taxation system that the businessman used in previous years (KBK personal income tax).

Embroidery of symbols, or why accurate filling is important

Profitable BCC consists of 20 digits, divided into groups with hyphens. The first three, called the administrator, indicate the recipient of the funds forwarded, for example, the tax authority or the FSS. The following are signs indicating:

• group;
• subgroup;
• article;
• subarticle;
• element - the code of a tax or other payment, its purpose, clarification of the income item, the 12th and 13th digits indicate the budget level.

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The budget can be federal, municipal, or specific.

The numbers from 14 to 17 differentiate taxes from penalties or other mandatory payments, and the last three indicate the economic type of the transferred amount. You can find new BCCs in the State Treasury, the tax authority, having found the order of the Ministry of Finance that has come into effect, filling out payments online. Now on many electronic services they appear automatically.

Summarize

BCC for personal income is only part of the changes in the budget classification codes introduced by the Order of the Ministry of Finance and effective from January 2021:

1. It is assumed that the new codes will operate during the planned economic triennium until 2023.
2. Inaccuracies or the use of last year's codes will lead to freezing of the listed funds.
3. This can lead to the accrual of additional funds to be paid - penalty interest, the creation of an unfavorable reputation.
4. There are several sources for obtaining new codes that legal entities can use to obtain information.