How to legally avoid VAT and save on payroll taxes

VAT 0% instead of 20%

Article 145 of the Tax Code of the Russian Federation exempts companies and individual entrepreneurs from paying VAT on condition that the proceeds from the sale of goods (works, services) for the last 3 calendar months do not exceed 2 million roubles (excluding VAT).

Excisable goods are an exception – there is no tax exemption for them.

When calculating the revenue it is not necessary to take into account the advance payments received (prepayment), because they are not considered as revenue in the meaning of Article 251 of the Tax Code of the RF.

Required documents:

– a VAT exemption notice in the prescribed form;

– a balance sheet statement;

– a financial statement.

The set of documents must be submitted by the 20th day of the month in which you would like to be exempted from VAT.

Non-taxable operations

Article 149 of the Russian Tax Code stipulates that operations related to sale of some medical goods and services and some other operations stipulated in the said article are not taxable.

Application of a special tax regime – simplified taxation system (STS)

Under the simplified taxation system, only income tax is payable, not including VAT. In this case the tax rate depends on the taxation object:

– income – taxed at the rate of 6%;

– incomes less expenses – are taxed at the rate of 15%.

There are also regional tax rates from 1%, which you can also pay attention to.

Tax savings on employees’ wages

With totally official employment, about a third of an employee’s “net” salary goes to tax and insurance deductions. This state of affairs is, of course, unpleasant for business.

The use of self-employed status.

The self-employed must pay only one type of tax – professional income tax at a rate of 4% when working with individuals and 6% when working with legal entities.

It should be borne in mind that the annual income of a self-employed person must not exceed 2.4 million roubles, as otherwise they lose their status.

You should also be wary of substituting the self-employed relationship with an employment relationship, as the tax office can identify this at the first onsite audit.


Another convenient and reliable way to save money would be to engage an outsourcing company. It is not necessary to employ all your staff and then have to think about how to reduce your tax burden.