There are 2 types of Simplified taxation system:
1) tax at the rate of 5% from the turnover – for legal entities, which do not pay VAT.
2) tax at the rate of 3% – for legal entities, which pay VAT.
Simplified taxation system means that you pay tax from the total turnover (and your expenses doesn’t participate in the taxation).
When you register a company you have 15 days to choose what kind of taxation system you are going to use. If you didn’t choose it automatically your company will use General taxation system.