What type of taxation should I choose for a small workshop?

I'm not really a tax expert, but from people around me I know that for a small workshop, USN (simplified tax system) usually works well - less paperwork and easier to calculate 😊 Whether you choose 6% of income or 15% of profit depends on what your expenses are like, but most people go with USN.

You should probably still get advice from an accountant or your local tax office though - they'll tell you what's best for your specific situation, I don't want to say something wrong.

UTS (Simplified Tax System) is really usually the best option for a workshop, but it's important to understand that the choice between 6% of income and 15% of profit (income minus expenses) depends on your specific situation. If you have big material costs for raw materials, tools, spare parts - 15% is more profitable, because you only pay tax on your actual profit. But if it's mostly services from your own labor with minimal expenses, then 6% is simpler and cheaper.

Here's what people often forget about: with UTS you lose the right to VAT deduction. If your suppliers work with VAT and send you invoices, you won't be able to get that tax back. This can be critical if you're buying from big companies. So it makes sense to estimate before registration how much you're actually buying from legal entities that charge VAT.

Another thing - revenue amount. UTS is available if your income is up to 188 million per year (in 2026), so for a workshop that's not a problem. But keep in mind that you need to pay contributions for yourself and your employees, keep minimal accounting records (a book of income records). It's still easier than the general system, but it requires you to be organized.

First thing I'll mention is that a lot of people forget about one more important thing - registering with the funds. Simplified tax system seems easier on taxes, but contributions to the Pension Fund and Social Insurance Fund for yourself as a self-employed person don't go away, and they can be pretty substantial for a small workshop. Sometimes people get excited about the simplified system, and then they're surprised that mandatory payments eat up a decent chunk of their profit.

I'd also suggest doing a simple calculation on paper: write down your estimated monthly income and expenses, calculate the tax under both simplified system schemes, and see how much it differs in your specific situation. The numbers can vary depending on what kind of workshop you have - if you have a lot of material expenses, then 15% of profit will be better, if your expenses are minimal, then 6% of income. But these should be your numbers, not examples from the internet.

And yeah, guys, don't be lazy - consult with an accountant once - it might cost a couple thousand, but it'll save you a lot more. Especially if you later decide to switch systems; you'll avoid penalties and re-registration hassles.

When my neighbor was opening his small carpentry workshop, he spent a long time deciding between the 6% and 15% simplified tax system, and ultimately went with 6% - because he didn't have that many material costs, and chasing down all the paperwork for them would have been a nightmare!

But here's what matters: if you have serious expenses on tools, equipment, supplies - then 15% might actually be more profitable, because these expenses reduce your tax base. The key thing is to calculate both options at least roughly based on your actual revenue and expenses, rather than just picking whichever seems "easier"!

My neighbor had a clothing alteration and repair workshop, and she struggled with the choice for a long time until she talked to an accountant. It turned out that for her volume of work (not that many orders per month, but decent material expenses) the 15% simplified tax system on profit worked better, because she could deduct the cost of fabrics, thread, electricity. If she'd chosen the 6% system on all income, she'd be paying tax even on money that goes toward materials.

So the main thing is to honestly calculate what your average monthly turnover is and how much goes to expenses. If expenses are high (and in a workshop that's usually the case), then 15% might end up being more profitable. Plus keep in mind that a lot of clients really do prefer working with a sole proprietor on simplified tax - way fewer questions and paperwork than dealing with private individuals.

The key thing here is to calculate the actual numbers for your specific situation, because the tax system looks simple on paper, but in real life everything depends on the details. My neighbor opened a small carpentry workshop a few years ago, and he also thought at first that the 6% simplified tax system was a cure-all, but quickly realized that materials, rent, and tools eat up almost half his revenue. After recalculating, he switched to 15% on profit and saved decent money 😊

If you have few expenses and it's mostly manual labor - 6% might be more profitable, and it's simple and straightforward. But if you're buying materials, getting components, paying for space - definitely compare both schemes using real numbers from a few months. Often it turns out that 15% is cheaper precisely because you can deduct expenses from the tax base.

Don't forget about the fund contributions that were mentioned in the previous answer - they're separate from the tax, whether you're on the simplified system or any other. Plus it makes sense to spend 15 minutes with a calculator or chat with an accountant to clarify things specifically for your income and expense profile. It might even be simpler to spend money on a consultation than to deal with reregistration and get confused with the calculations later 💪