In cases provided for by law, the Tax Service (FTS) may change the OKVED code of a business entity. Let's consider what may cause this, as well as what actions the taxpayer should take in this case.
If the tax office has changed OKVED- With what it can be connected? OKVED is a code for the type of economic activity established by law in accordance with one or another classifier. This code is necessarily reflected in the list of information about the enterprise, which is recorded in state registers - for example, in the Unified State Register of Legal Entities and the Unified State Register of Individual Entrepreneurs, and reflects what the company primarily does. At the same time, there may be several OKVED codes, depending on the number of types of economic activity of a legal entity or individual entrepreneur.
Once entered into the state register, OKVED can be changed:
- by the entrepreneur himself - at any time if necessary (but in the manner prescribed by law);
- competent government agency - exclusively in the manner prescribed by law.
The relevant government body, which has the right to adjust OKVED in the second scenario, may be the Federal Tax Service.
But really Why does the Federal Tax Service change the company's OKVED code?
The fact is that from July 11, 2016, the document OK 029-2014 was introduced by law as the main OKVED classifier. In principle, it was in effect before, but could be used along with the previous classifier - OK 029-2001. Now, unless otherwise expressly prescribed by law, in legal relations related to the maintenance of state registers of enterprises, the OK 029-2014 classifier must be used.
The relevant legal relations include the entry by the Federal Tax Service of information about registered enterprises into the state register, as well as their updating in cases provided for by law. The Federal Tax Service is obliged to use the new OKVED classifier. At the same time, if initially in state registers information about the enterprise contained codes according to document OK 029-2001, then tax authorities replace them with codes corresponding to document OK 029-2014.
The corresponding adjustment must be carried out using special keys (rules for correlating old and new OKVED codes), the list of which is determined by law.
For example, for the type of activity “Retail trade in motor vehicles”, according to the old OKVED code 50.10.2 is defined. According to the new OKVED, it must be replaced - in accordance with the keys, code 45.11.2 - which is established for the type of activity "Retail trade in passenger vehicles in specialized stores."
Thus, changing OKVED when applying in the established order the keys to determine the conformity of old codes with new ones is a completely legal procedure. Moreover, the Federal Tax Service can carry it out without fail - due to departmental regulations. Accordingly, information about legal entities and individual entrepreneurs entered into state registers before the entry into force of OK 029-2014, that is, about business entities registered before 07/11/2016, must be adjusted by the Federal Tax Service in cases provided for by law.
Do relevant business entities need to do anything in connection with the implementation of such an initiative by the Federal Tax Service?
Certain actions may be required from businesses. Let's study which ones exactly.
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What to do if tax authorities change OKVED?
Initially, when submitting documents for registration of a company or individual entrepreneur, OKVED is determined by the entrepreneur himself. Its main task is to ensure that reliable information about the company and what it does is included in state registers. At the same time, registration documents may reflect either one OKVED code or several - as we noted at the beginning of the article, depending on the number of varieties of areas of economic activity of the company.
In the event of a change in OKVED codes, the entrepreneur’s task does not fundamentally change - he must ensure that current information about the company is present in state registers. Therefore, first of all, the business owner needs to find out which OKVED tax codes the tax authorities chose for him when adjusting those previously specified during registration.
To do this, he can, first of all, use the keys that we mentioned above - almost certainly the adjustments made to the Federal Tax Service registers will be made in accordance with these keys. But for reliability, it doesn’t hurt to get fresh information from registers with updated OKVED codes.
For these purposes, you can request a quick extract from the Unified State Register of Legal Entities or Unified State Register of Individual Entrepreneurs, using, for example, one of the online services of the Federal Tax Service. When checking current records in government registers, it may turn out that:
- The code chosen by the Federal Tax Service does not correspond to the actual type of activity. How to fix the situation: submit an application to the Tax Service - in free form, with a request to include in the Unified State Register of Legal Entities or Unified State Register of Individual Entrepreneurs the codes corresponding to the actual type of activity. You can attach copies of old extracts from state registers, if available.
- The main type of activity in accordance with the updated code has become additional (and vice versa - an additional activity, or one of them, has become the main one). How to fix the situation: submit an application to the Tax Service in the prescribed form - for example, a legal entity will have to use document P14001, which must reflect current information on the types of activities of the enterprise.
- The type of activity under the new OKVED is, in general, correct - but has a name that is noticeably different from what was previously reflected in the state register. How to fix the situation: In general, no corrections are required. But if the Unified State Register of Legal Entities or Unified State Register of Individual Entrepreneurs reflects a type of activity that clearly does not essentially fit the description of the business processes that are carried out in the company, it is necessary, again, to use form P14001 or its equivalent.
But, in fact, for what purpose does it make sense for an individual entrepreneur or legal entity to carry out these actions?
Why is correct OKVED important?
First of all, because providing reliable information to the Federal Tax Service by an economic entity is an obligation provided by law. The presence of an incorrect OKVED in the state register may be considered a violation of the relevant norm, as a result of which the company may be fined based on the provisions of Art. 14.25 Code of Administrative Offenses of the Russian Federation.
OKVED codes are used in different legal relations. These include companies sending reports to various government bodies. Many reporting documents that are submitted to certain departments reflect, among other information about the company, the OKVED code - or several of these codes. It must coincide with what is listed in the state register, otherwise the body accepting the reporting may consider the documentation not provided in the prescribed manner.
In relation to certain economic entities, the state can provide various benefits - for example, on taxes. One of the criteria for using such benefits may be that the company carries out certain types of activities - for example, the development of high-tech technologies. The type of activity an organization is engaged in is primarily recorded in OKVED. It is important for an innovation development company applying for benefits to have correct OKVED, reflecting the specifics of the company’s main profile, so that it can enjoy the appropriate preference.
Changing and adding OKVED codes of LLC is carried out in the manner prescribed by the norms of the current legislation. The basis for implementing the procedure is a change in the main direction in the work of the enterprise, as well as the addition of additional areas and the exclusion of existing ones. According to civil law, changes of this kind are subject to mandatory recording in the state register.
The article provides detailed information on how to add a direction to the activities of an LLC, replace an existing one with a new one, or simply exclude it from the list. The step-by-step instructions presented in the article will help you quickly and without additional difficulties implement the procedure yourself, without involving third parties. The procedure for performing the operation to change codes has changed somewhat in 2017, so the topic is relevant and requires detail.
Additional Information! The concept of OKVED codes refers to the directions in the activities of the enterprise. In accordance with the law, they must be indicated during registration of the company. The first in the list, as a rule, is the direction that is a priority for the company, followed by secondary activities.
How to change the OKVED code of an LLC and when to do it
- if it is necessary to add the type of activity of LLC (main or additional). Often, when expanding a business, the founders decide to add a line of work, thus diversifying its activities and making it more attractive to large companies;
- if you need to change the type of activity of the LLC. The business direction in which the company had previously worked became irrelevant and unprofitable, so the founders decided to change it. Sometimes a change in type of activity is associated with great competition in this area, for example, if several business entities providing similar services are registered in one region. In this case, the optimal solution to the problem is to replace this direction with another;
- to exclude an activity. If there is an unclaimed destination on the list, it can be completely excluded from the list;
- if the founders want to replace the main business area with one of the additional ones. Despite the fact that new codes are not entered, but only a replacement occurs within the list, this change must be reported to the tax service in order to record the information in the register.
Note! Tax officials must be notified of changes regarding OKVED codes so that they can record the amendments in the Unified State Register of Legal Entities. There is a period specified by law for notifying the Federal Tax Service Inspectorate, failure to do so may result in the violator being subject to legal liability.
The source of the codes is the corresponding classifier; it is with its help that you can select the required direction. Due to changes in legislation carried out in 2017, the previously used OK 029-2007 ceased to be valid. Now approved by order of Rosstandart OK 029-2014 is applied. Companies founded after July 2016 were required to use OK 029-2014 during registration activities. As for those LLCs that were created earlier, they were registered using OK 029-2001.
Due to amendments to tax legislation, it is now necessary to use codes from the new classifier to determine the possibility of using tax benefits.
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Changing the main direction step by step
To change the main code, you can use the following algorithm of actions.
Step-by-step instruction:
- making a decision by the founders of the company to change the main code. The decision is made by voting, the result of which is entered into the minutes;
- updating the charter, recording information about changes made in the text of the document. The charter is the main document of the LLC, therefore any information relating to the activities of the company, including changing codes, is recorded in it;
- notification of the Federal Tax Service Authority about the decision made at the meeting of LLC participants. Notification of the tax service is carried out by submitting an application in the established format. Along with the application to the tax office, it is necessary to submit a new version of the Charter, taking into account the amendments made, as well as a receipt confirming the fact of payment of the state duty in full;
- recording changes in the state register. The implementation of the procedure is within the competence of tax officials. Information on new details of the Charter and data on the change of code/codes must be entered;
- receiving ready documents. After 5 days from the date of application, the applicant can pick up the new edition of the Charter and the entry sheet in the state register.
Going through the described stages is necessary to change the main type of activity; read on to adjust additional areas.
According to the established rules, when registering an enterprise, data on the main type of activity of the organization and additional ones are recorded. The main code refers to the direction in which the society operates most often. Secondary activities are carried out on an ad hoc basis if necessary.
To change the additional code, an algorithm similar to that described earlier is used. The only difference is that the need to change the Charter does not arise in all cases. So, if the text of the document contains the phrase “and other types of activities not prohibited by law,” there is no need to change the Charter.
Note! If types of activities, the implementation of which requires a license, are included in or excluded from the list of codes, the Charter must be changed.
If the text of the Charter does not change, the application to the tax office is submitted on Form 14001. There is no need to pay state duty, since the changes will be recorded only in the register.
How long does it take to make changes?
Despite amendments to the legislation, as a result of which new codes were introduced into the classifier, the procedure for registering changes remained the same. The requirement regarding notice periods has not changed. An application to make changes to the register must be submitted within 3 days from the date of the relevant decision. This requirement is enshrined in Article 5 of the Law “On State Registration of Legal Entities and Individual Entrepreneurs”, the main purpose of which is to regulate the conditions and procedure for registering business entities.
Violation of the established requirement is grounds for bringing the general director of the enterprise to administrative liability in the form of a fine. Penalties are applied not only if the head of the LLC did not report the change of codes to the Federal Tax Service, but also if the deadline allotted by the legislator for the implementation of this procedure is missed. The amount of the fine is assigned in accordance with paragraphs of Art. 14.25 Code of Administrative Offences.
This section includes:- the physical and/or chemical processing of materials, substances or components with the aim of converting them into new products, although this cannot be used as a single universal criterion for defining production (see "waste recycling" below)
Materials, substances or transformed components are raw materials, i.e. products from agriculture, forestry, fisheries, rocks and minerals and other manufactured products. Significant periodic changes, updates or conversions of products are considered to be related to production.
The products produced may be ready for consumption or may be a semi-finished product for further processing. For example, the product of aluminum purification is used as a raw material for the primary production of aluminum products, such as aluminum wire, which in turn will be used in the necessary structures; production of machinery and equipment for which these spare parts and accessories are intended. The production of non-specialized components and parts of machinery and equipment, for example engines, pistons, electric motors, valves, gears, bearings, is classified in the appropriate grouping of section C "Manufacturing", regardless of which machinery and equipment these items may include. However, the production of specialized components and accessories by casting/molding or stamping of plastic materials is included in Class 22.2. The assembly of components and parts is also classified as production. This section includes the assembly of complete structures from constituent components, produced independently or purchased. Waste recycling, i.e. processing of waste for the production of secondary raw materials is included in group 38.3 (activities for processing secondary raw materials). Although physical and chemical processing may occur, this is not considered part of manufacturing. The primary purpose of these activities is the basic processing or treatment of waste, which is classified in section E (water supply; sewerage, organization of waste collection and disposal, pollution control activities). However, the production of new finished products (as opposed to products made from recycled materials) applies to all production as a whole, even if waste is used in these processes. For example, producing silver from film waste is considered a manufacturing process. Special maintenance and repair of industrial, commercial and similar machinery and equipment are generally included in group 33 (repair and installation of machinery and equipment). However, repair of computers and household devices is listed in group 95 (repair of computers, personal items and household items), while at the same time, automobile repair is described in group 45 (wholesale and retail trade and repair of motor vehicles and motorcycles). Installation of machinery and equipment as a highly specialized activity is classified in group 33.20
Note - the boundaries of manufacturing with other sections of this classifier may not have a clear, unambiguous specification. Typically, manufacturing involves the processing of materials to produce new products. Usually these are completely new products. However, determining what constitutes a new product can be somewhat subjective
Processing implies the following types of activities involved in production and defined in this classifier:
- processing of fresh fish (removing oysters from shells, filleting fish) not carried out on board a fishing vessel, see 10.20
- Pasteurization of milk and bottling, see 10.51
- leather dressing, see 15.11
- sawing and planing of wood; wood impregnation, see 16.10
- printing and related activities, see 18.1
- tire retreading, see 22.11
- manufacture of ready-to-use concrete mixtures, see 23.63
- electroplating, metallization and heat treatment of metal, see 25.61
- mechanical equipment for repair or overhaul (e.g. automobile engines), see 29.10
There are also types of activities included in the processing process, which are reflected in other sections of the classifier, i.e. they are not classified as manufacturing industries.
These include:
- logging activities classified in section A (AGRICULTURE, FORESTRY, HUNTING, FISHING AND FISH CULTURE)
- modification of agricultural products classified in section A
- preparation of food products for immediate consumption on premises, classified in group 56 (activities of catering establishments and bars)
- beneficiation of ores and other minerals classified in section B (MINERAL MINING)
- construction and assembly work carried out on construction sites, classified in section F (CONSTRUCTION)
- activities of breaking down large quantities of goods into smaller groups and secondary marketing of smaller quantities, including packaging, repackaging or bottling products such as alcoholic beverages or chemicals
- solid waste sorting
- mixing paints according to customer's order
- metal cutting according to customer's order
- explanations for various goods classified under section G (WHOLESALE AND RETAIL TRADE; REPAIR OF MOTOR VEHICLES AND MOTORCYCLES)
This service allows you to transfer types of economic activities from the old edition of OKVED OK 029-2001 (revision 1) into the codes of the new edition of OKVED OK 029-2014 (revision 2). Code matching can be done in both directions. The program is provided absolutely free.
When did the changes happen?
The new edition of OKVED2 OK 029-2014 came into force on July 11, 2016. From now on, you cannot use the old OKVED classifier.
Why do you need to know the new OKVED codes?
New OKVED codes must be indicated in all documents that individual entrepreneurs and LLCs will submit to the tax authorities, as well as extra-budgetary funds in 2019. For example, this applies to filling out all declarations and other reports generated for 2018 and 2019.
What to do if several new ones are compared using the old OKVED?
This is not too important, but it is still better to choose the type of economic activity that most closely matches your business.
Do individual entrepreneurs and LLCs need to independently make changes to their documents?
Tax authorities automatically transferred OKVED codes to all entrepreneurs and organizations, so no independent actions are required.
If you need to select codes, you can use the convenient new OKVED 2 classifier with decoding and search.
We offer step-by-step instructions for changing OKVED LLC for those who:
- changes the main type of its activity;
- introduces the previous additional one as the main one;
- adds or excludes additional activities.
All these changes are made through the Federal Tax Service and are reflected in the Unified State Register of Legal Entities.
The OKVED code is selected from a special classifier. Details in the article Codes of types of activities for LLCs in 2018 - 2019 - classifier. From 01/01/2017 there was a final transition to a new classifier, therefore:
- terminated OK 029-2007 (NACE, rev. 1.1), which was used throughout the entire period of validity only for reporting and never for state registration:
- OK 029-2014 (NACE, ed. 2) approved. Order of Rosstandart dated January 31, 2014 No. 14-st) 6).
Newly created (after July 11, 2016) LLCs, when filling out registration applications, immediately had to use OK 029-2014 (letter of the Federal Tax Service of Russia dated June 24, 2016 No. GD-4-14/11306@).
Previously established companies used OKVED OK 029-2001 codes (NACE, rev. 1) when creating and registering changes.
Federal Law No. 248-FZ dated 07/03/2016 amended the Tax Code of the Russian Federation, according to which codes according to the new OKVED2 are used to determine the possibility of using preferential tax regimes.
Changing the main activity of an LLC: step-by-step instructions
Most often, company participants are faced with the question: how to change the main activity of an LLC? So we will propose an action algorithm for this particular case:
- The decision of the meeting of LLC participants to change the main type of activity is recorded in the appropriate minutes.
- The company's charter is being updated.
- After the decision is made, an application is submitted to the registration authority in form 13001 (approved by order of the Federal Tax Service of Russia dated January 25, 2012 No. ММВ-7-6/25@) with a new edition of the charter and a receipt for payment of the state duty attached.
- The Federal Tax Service changes the information in the Unified State Register of Legal Entities, indicating the updated main type of activity and details of the new edition of the charter.
- After 5 working days, a new version of the charter and a new entry sheet in the Unified State Register of Legal Entities in the form of electronic documents are sent to the legal entity’s mail. If desired, you can receive a document on paper confirming the contents of electronic documents.
How to change the OKVED code of additional activities of an LLC
The algorithm for changing additional types of LLC activities is similar to the procedure for changing the main type.
At the same time, the charter changes if it did not initially stipulate: “and other types of activities not prohibited by law.”
If there is such a clarification in the charter, no changes are required. However, when excluding certain types of activities or including additional types that require a license, it is better to make changes to the charter. In the event that the charter does not change, an application is submitted in form 14001, approved by order of the Federal Tax Service of Russia dated January 25, 2012 No. ММВ-7-6/25@. There is no need to pay state duty.
Accordingly, changes to the list of activities will be made only in the Unified State Register of Legal Entities.
Deadlines for entering updated OKVED into the Unified State Register of Legal Entities in 2018 - 2019: how quickly changes need to be made, responsibility
Apart from the introduction of new OKVED codes for state registration purposes, the procedure for changing information about the types of activities of an LLC has not undergone any changes.
As before, part 5 of Art. 5 of the Law “On State Registration of Legal Entities and Individual Entrepreneurs” dated 08.08.2001 No. 129-FZ requires submitting an application R 13001 or R 14001 to the Federal Tax Service within 3 days after the LLC participants make a decision to change the main OKVED of the LLC or additional ones.
Failure to fulfill this obligation may result in administrative liability for the head of the LLC under Art. 14.25 of the Code of Administrative Offenses of the Russian Federation:
- in case of missing the deadline for filing an application - according to Part 3 of this article;
- in case of failure to provide information and discovery of new types of activities by the supervisory authority - under Part 4.
Thus, step-by-step instructions for changing the OKVED LLC 2018 - 2019 imply 3 main stages: making a decision by a meeting of participants, submitting documents to the Federal Tax Service for registration and receiving electronic documents confirming it.