The most common misconception regarding self-employed people is that they can’t work for hire; however, this isn’t true; self-employment may be paired with labor under an employment contract, RIA reports citing SberUslugi.
Self-employment, contrary to common belief, does not imply full-time work. This is a false assertion. Work under an employment contract can be coupled with self-employment. If you’re a schoolteacher, for example, you can lawfully supplement your income as a self-employed tutor, photographer, or copywriter. Experts say that some businesses need employees to tell them that they work in the same region.
Self-employment, on the other hand, is relatively simple to set up. Any citizen of Russia or the Eurasian Economic Union with a Russian TIN can do so online, for example, through a bank application.
In addition, self-employed people have the option of working for businesses. Such collaboration is advantageous and easy for legal organizations and individual entrepreneurs, especially for activities that are not fundamental to the business.
“For example, a tiny coffee shop’s refrigerator broke down. It is simpler for the establishment’s management to locate a self-employed foreman who will repair the equipment the next day and get an electronic check for the amount due from the self-employed. The only difference is that in this instance, the self-employed income tax will be 6%, not 4%, as it is when working for someone else,” the expert said.
The notion that self-employed people have a limited range of activities is also false. Some limits are imposed by tax regulations, such as the inability to resale products, operate under an agency arrangement, sell excisable items, or sell commodities that require specific permissions. However, a self-employed person might operate in a variety of fields, from providing legal services to walking dogs.
It’s also incorrect to assume that self-employed persons pay taxes on all card revenue. Only the invoices for which the checks were generated would be taxed, according to the experts. That example, a self-employed individual can get cash payments; all that is required is the production of a check.
The tax on professional income, a unique tax system for the self-employed, allows users to install the My Tax mobile application on their cellphones and work lawfully without having to contact tax authorities or submit reports. When working with people, the tax rate is 4%, and when working with legal companies, it is 6%.
This regime has been in place in Russia as a test since 2019, and according to the most recent statistics from the Federal Tax Service, the total number of registered users has surpassed 3 million.
