1) Which OKVED code should I apply when providing cosmetology services and what type of taxation does it fall under? 2) We want to open a beauty salon (hair salon, solarium, cosmetology services, manicure). What type of taxation should I choose? Is it better to be an individual entrepreneur or an LLC?
You are being advised
tax consultant
accounting and legal consultant
Good afternoon 1) In accordance with the All-Russian Classifier of Economic Activities, cosmetology services belong to code 85.14 \"Other health care activities\" without dividing cosmetology into therapeutic and surgical, as well as without dividing cosmetology services into medical and cosmetic. (Letter of the Ministry of Economic Development of the Russian Federation dated July 12, 2007 N 10169-AB/D18). 2) Individual entrepreneur, at the simplified tax system of 15%, or UTII (depending on your location), if related products are sold in the salon, but only if the area of the sales area does not exceed 150 square meters. m. If the area of the beauty salon is more than 150 sq. m, then you can put a display window next to the salon administrator, and on the floor plan indicate the part of the premises where sales are carried out. In this case, an order is issued to carry out related sales of goods here, in the marked area. We recommend writing in the lease agreement that trade is carried out from a sales counter (the area of which is less than five square meters), and hairdressing services are provided on the rest of the leased area. In this case, you will be able to avoid claims from tax authorities regarding the application of the UTII regime. Sincerely, Elena Barinova 2nd opinion: The type of your activity can also be classified as Section O. Provision of other communal, social and personal services. OKVED 93.02 Provision of services by hairdressing and beauty salons. If in the territory where the services will be provided, UTII for household services has been introduced, then it will be most beneficial for you to use UTII (cosmetology services are classified as household services - OKUN code 081501). If you don’t want to use UTII, then you can optionally choose the simplified tax system or OSNO. What to choose: individual entrepreneur or LLC depends on many factors. Let us immediately note that all existing differences between individual entrepreneurs and LLCs can be conditionally divided into several groups: Organizational. Economic. Legal consequences. Organizational differences - include all issues related to the registration and organization of a business in one form or another: To register an individual entrepreneur (IP), a minimum of documents is required, and there is no requirement to pay for the authorized capital or obtain a legal address. The state fee for registering an individual entrepreneur is 800 rubles, and for registering an LLC – 4,000 rubles. Individual entrepreneurs do not need to open a current account and have a seal; for legal entities, the presence of a current account and a seal is mandatory. An individual entrepreneur can apply types of taxation, such as a patent, that are not available to legal entities. The transition from an LLC to an individual entrepreneur is much easier and faster. The reverse situation is much longer and more expensive. The economic advantages of an LLC over an individual entrepreneur are more significant. Despite the fact that at first glance, an individual entrepreneur has lower initial expenses, in the future it often turns out that the costs of maintaining a legal entity may turn out to be less than for an entrepreneur without forming a legal entity. For example, if an individual entrepreneur does not operate, then he still has the obligation to pay a fixed contribution to the Pension Fund, but for a limited liability company in such a situation, payments are not provided; it is enough just to provide “zero” reports and an information letter that payments were not made to individuals. Certain difficulties also exist in the lending sector, where traditionally banks are more loyal to legal entities. For credit institutions, the main difference between an individual entrepreneur and an LLC is that the latter have a clear amount of authorized capital, which, if necessary, can be foreclosed on. And even if in most cases the authorized capital of an LLC is a minimum of ten thousand, then the likelihood of receiving a loan from the organization will be higher than from an individual entrepreneur. At the same time, the legislation is more loyal to individual entrepreneurs; for example, the amount of penalties for administrative offenses for them is less than for legal entities. Sincerely, Larisa Alexandrovna
96.02 Provision of services by hairdressing and beauty salons
96.04 Sports and recreational activities
96.09 Provision of other personal services not elsewhere classified
The codes correspond to the new edition of OKVED 2
FILES
Explanations and clarifications
Beauty business is one of the popular types of entrepreneurial activity. These services are always in demand among the population, but their organization has several significant nuances.
If in other types of business planning should begin with the concept, then when opening a beauty salon first point there must be a question about the premises. The success of such a business directly depends on its location and material base, that is, on the relevance of all this to the target audience. It's best to avoid subletting.
Second point a business project to open such a business is a matter for the masters. The customer base, and therefore future profits, will depend on their level. The entrepreneur himself is also obliged to understand the basic issues related to the work of masters of a particular profile.
Third determining factor- selection of consumables. What is important is their quality, compliance with customer expectations, benefits when purchasing, and control during use.
Then you need resolve administrative issues: will the entrepreneur himself handle this or should he look for a reliable manager.
And finally, before opening, you need to take care of problems that will become important once work begins - ensuring cleanliness, washing, repair and maintenance of equipment.
As part of the operation of spa salons, beauty salons and hairdressing salons, it is possible to provide clients with such services:
- any manipulation of hair (cutting, washing, dyeing, styling, curling, straightening, extensions, trimming, etc.), including eyebrows, eyelashes and beards;
- cosmetic massage of the face, arms, legs, body with the application of various products;
- anti-cellulite wraps;
- manicure;
- pedicure, etc.;
If the appropriate additional OKVED is selected, you can sell perfume and cosmetic products in the premises of the beauty elephant.
When organizing a salon to provide cosmetology and hairdressing services, you must remember that since 2015 this type of activity has included massage services, as well as the application of makeup and tattoos.
Wig making is not included in this type of business.
Hairdressing services are in demand among the population, so novice entrepreneurs may well consider this activity as the main way to make a profit. But in order for the activity to be carried out legally, the business owner must register with the Federal Tax Service in accordance with the established procedure. During state registration, in an application on form P11001 (legal entity) or P21001 (individual entrepreneur), you must indicate the code of the area in which the activity will be carried out. What will the OKVED code “Hairdressing services” be in 2019? Which directory should this identifier be taken from? The answers to these and other questions are in our material.
Main and additional OKVED code
The main code is considered to be the code of the type of activity for which the profit margin prevails compared to the others. This code will appear in all constituent documentation.
Additional codes reflect related activities that do not occupy a leading position among the others. Entrepreneurs have the right to choose additional codes from different sections of the directory; there are no restrictions on this by law.
Where can I get the OKVD code?
In 2019, the OKVED code for a beauty salon, like any other, must be looked for in the current OKVED2 classifier. It is also called OK 029-2014 (NACE rev. 2), approved. By Order of Rosstandart dated January 31, 2014 No. 14-Art. Previous editions of the classifier are no longer valid.
How many characters should the code indicated when registering with the tax service contain? Previously, it was allowed to use ciphers consisting of 3 digits. Therefore, when receiving an extract from the Unified State Register of Legal Entities for organizations registered before July 2013, you can still find three-digit codes. But now we need to select OKVED codes consisting of at least 4 characters.
Hairdressing services: OKVED code
Today, the activities of beauty salons have become widespread. Hairdressing services have a specific structure, and therefore they were placed in a separate group. Searching for the OKVED code “Hairdressing services” in the OKVED2 directory is carried out as follows:
go to section S “Provision of other types of services”;
we are looking for class 96;
We are looking for subclass 96.02 “Provision of services by hairdressing and beauty salons.”
OKVED code 96.02 is suitable for all legal entities and individuals who own hairdressing and beauty salons.
The classifier indicates that group 96.02 includes:
facial massage, etc.
hair cutting and trimming;
washing, styling, hair coloring;
highlighting, curling and other similar works;
manicure and pedicure;
shaving and trimming the beard;
Activities related to the manufacture of wigs are not included in this group. There is a separate code for it - 32.99.
Unlike many other profiles and areas, the process of selecting an OKVED code is simplified to the limit. All necessary information is grouped under one code - 96.02. As you can see, it is suitable not only for hairdressing salons, but also for salons where you can get a manicure, facial massage, shave your beard and receive other services. Therefore, in the application for registration, you can indicate only areas relevant to hairdressing activities.
Additional activities
Going after haircuts and hairstyles alone is not always profitable. For this reason, the owner of a hair salon can expand the scope of his activities by providing additional services to clients. At the same time, it is important not to forget about the selection of the appropriate OKVED codes.
In addition to the OKVED code “Beauty Salon”, you can additionally use, for example, the following codes:
47.75 – sale of cosmetics and personal care products;
47.19 – retail trade in non-specialized stores;
96.04 – activities of solariums and weight loss salons;
96.09 – provision of personal services that are not included in any other group.
Is it possible to add and change OKVED codes?
Entrepreneurs have the right to change the activity code at any time. Civil legislation requires that such changes must be recorded in the Unified State Register of Legal Entities/Unified State Register of Individual Entrepreneurs. Having decided to engage in another type of activity, the business owner is obliged to notify the tax office employees within a specified period of time (3 days) by submitting an application to change or supplement the codes. Otherwise, he will face a fine.
OKVED codes “Hairdressing services”
|
Decoding |
|
|
Providing services to hairdressing and beauty salons The group includes: Hair washing, trimming and cutting, styling, coloring, highlighting, curling, straightening and similar work performed for men and women; Shaving and trimming the beard; Manicure, pedicure, makeup, facial massage, etc. This group does not include: Wig making, see 32.99 |
|
|
Providing hairdressing services The group includes: Providing hairdressing services for men, women and children; Grooming services, cleaning, washing, combing, cutting, fitting, coloring and curling of wigs, extensions, hairpieces and their repairs |
|
|
Provision of cosmetic services by hairdressing and beauty salons The group includes: Providing services for simple and complex face makeup, makeup; Eyebrow and eyelash tinting, eyebrow shaping, eyelash extensions, eyelash curling; Cosmetic masks for face and neck skin care using cosmetics; Hygienic massage of the face and neck, including aesthetic, stimulating, drainage, hardware massage, SPA massage; Cosmetic comprehensive care for the skin of the face and neck, including skin testing, cleansing, cosmetic cleansing, deep cleansing, toning, hygienic massage, mask, protection, makeup, selection of home care products; Manicure services; Comprehensive care for the skin of the hands; Nail extension; Pedicure services; Comprehensive foot skin care; Providing other cosmetic services: SPA body care services, including hygienic, relaxing, aesthetic methods using cosmetics, natural and preformed factors |
The niche of hairdressing services looks attractive for a beginning individual entrepreneur, but at the initial stage questions often arise - how are hairdressing services for individual entrepreneurs designated in OKVED, how to enter into an agreement with a hairdresser, etc. The issue of taxation is also important: if, for example, in rural areas you cut your hair people can simply work at home without registering legally, then in the city supervisory services are vigilantly monitoring entrepreneurs.
What OKVED codes are suitable for a beauty salon or hairdresser?
The market for beauty salons, studios and hairdressing services looks attractive for starting a business, since people will always have haircuts, manicures, perms, etc., and such an enterprise is likely to be in demand by consumers. But, like any business, it requires proper registration, in particular, the choice of business activity (type of activity) in the OKVED code directory.
The abbreviation hides the All-Russian Classifier of Types of Economic Activities. It specifies all types of economic activity that entrepreneurs are allowed to engage in on the territory of the Russian Federation.
When registering as an individual entrepreneur, a businessman is required to choose the code of the area in which he plans to work. You can indicate several options, but one will appear in the papers as the main one. If you plan to provide hairdressing services, the corresponding classifier code is included in the application.
According to the classifier, code 96.02 is suitable: it encrypts the provision of services by beauty studios, salons, and hairdressers.
These include:
- washing hair, cutting it, coloring it, trimming hair, styling it, highlighting procedures, curling, etc.;
- shaving, trimming mustaches and beards;
- facial massage, manicure services, makeup.
Important: the production of wigs is not included in this group.
The 96.02 cipher is divided into two subcategories.
96.02.01. This combination codes hairdressing services to the public (PU):
- PU to all categories of people;
- hair washing, coloring, hair perm, haircut, wig repair (but not production), hair styling services, etc.
Code 96.02.02. Cosmetic services are encrypted here:
- make-up, make-up of all types;
- applying cosmetic masks;
- eyebrow and eyelash tinting, eyelash extensions, perm procedures, shape correction;
- massage treatments on the neck, facial skin;
- comprehensive measures for caring for the skin of the neck and face;
- manicure;
- hand skin care;
- pedicure;
- nail extension;
- cosmetics and hygiene of the client’s feet;
- other popular services: SPA, etc.
Until July 11, 2017, OKVED standards version 029-2001 were applied to beauty salons, studios and hairdressing salons. But from the specified date another one is valid - ver. 029-2014.
If an individual entrepreneur plans to work without hiring employees, he, of course, should not enter into an agreement with himself. But if an outsider is hired for the position of hairdresser, the businessman is obliged to formalize it properly by registering the employment relationship.
A typical employment contract includes:
- Full name of the entrepreneur and the hired employee, details of the individual entrepreneur;
- subject of the contract. This section indicates the position, place of work, mode (main job or part-time), subordination, working conditions, etc.;
- validity period and probationary period;
- terms of remuneration;
- working hours and rest hours, vacation policy;
- duties of a hairdresser and his rights;
- a similar point regarding the employer;
- insurance terms, if applicable;
- responsibility of each party;
- terms of termination of the contract;
- a number of final provisions relating to legal validity and dispute resolution;
- details of the individual entrepreneur and employee.
Sample agreement:
If necessary, section 6 can be supplemented with clause 6.3, according to which the obligations and rights of individual entrepreneurs arise from labor legislation and other legal acts, agreements and paragraphs of the collective agreement.
This is a key issue for the entire organization of an individual entrepreneur’s business, because the entrepreneur will have to interact with the tax authorities in any case. At the same time, it is the inalienable right of every businessman to use the form of taxation that is convenient for him personally, and it is important not to make a mistake in choosing.
Important: the choice is made immediately when applying for business registration! If the individual entrepreneur does not indicate the system immediately, within thirty days he will be transferred to OSNO - the general procedure for paying taxes.
Simplified taxation system
Since the staff of a hairdressing salon is usually small, as is the turnover, the simplified tax system looks like a suitable option.
The individual entrepreneur will have to decide on what he will pay taxes:
- total income;
- taxation of profits “income minus expenses”.
In the first case, the rate will be 6 percent, in the second - 15. If more than 60 percent of earnings are spent on hairdressing salon expenses, it is more convenient to use income tax. Otherwise, working at a 6 percent rate will be more profitable.
Payments to the tax office are made once a quarter, and reporting is submitted at the end of the year. And, of course, it is mandatory to equip the hairdresser with a cash register (and since 2017, the connection of cash registers to the OFD system is gradually being introduced for sending fiscal documents to the state online storage).
UTII
This choice is quite widespread among hairdressers and beauty salons. A single tax on imputed income looks like the best option when the size of the salon is very small, and there are only a few people on staff, including the individual entrepreneur himself. As the enterprise grows, tax policy will probably have to be revised.
The formula for calculating UTII looks like the product of the number of employees, the base profitability (7,500 rubles, for a given income tax), the deflator coefficient, the base profitability adjustment indicator and the tax rate.
Working under UTII, the hairdresser also contributes funds to extra-budgetary funds, while receiving the required tax benefits - but not more than half of the amount required for payment.
Reporting is submitted quarterly, UTII allows you to work without a cash terminal and a current bank account.
This reduces the patent tax system. With it, an individual entrepreneur buys a tax patent for a certain period - from a month to a year.
By declaring its intention to work according to this scheme, the hairdresser complies with:
- it is expected to earn no more than a million rubles per year (for small cities. In large cities with a population of over a million, the amount increases by 3-10 times);
- the number of employees will not exceed 15 (in one premises or branch);
- An individual entrepreneur does not enter into relations of the type of joint property management or contractual partnership.
All tax payments consist of paying for a patent, its price is 6 percent of expected income. There is no need for lengthy registration with a large package of documents, in addition, the PSN can be extended by notifying the Federal Tax Service by registered mail until December 20 of the current year.
Installing a cash register is not required, but it is required to record customer payments in a special income book. It is compiled according to a special form (available on the Federal Tax Service website, where it can be downloaded and printed).
In legal terminology, this method of recording revenue is called the “cash method.”
Payment for the patent must be made before the expiration of its term, if there is one - up to six months. If it is valid for 6-12 months, the contributions can be divided: a third – no later than the 90th day from the beginning of the document’s validity, the rest – until the expiration of the patent period. An individual entrepreneur who forgets to transfer funds on time is forcibly transferred to the general system, and will only be allowed to return to UTII the next year.
As you can see, choosing which option to pay taxes on is not that difficult. You just need to calculate how it is more profitable to act, and do not forget to transfer the fees on time, and then the beauty salon or hairdresser will generate a stable income and not cause trouble.