12.12.2022

 

On 24 November 2022, the draft law No. 8226 "On Amendments to the Tax Code of Ukraine and Certain Legislative Acts of Ukraine regarding the Special Taxation Regime for the Specific Third Group Unified Tax Taxpayers" (Draft Law) was registered in the Verkhovna Rada of Ukraine (VRU).

In case of adoption of the Draft Law, the respective law will extend its effect to sole proprietors – the third group unified tax taxpayers (SPs), who:

• do not use the labor of hired personnel (currently, pursuant to the effective provisions of the Tax Code of Ukraine (TCU), the number of persons who can be in labor relations with SPs is not limited), and

• whose income during the calendar year does not exceed 1167 minimal wages established by law as of 1 January of the tax (reporting) year (for 2022 the corresponding amount constitutes UAH 7,585,500.00, for 2023 – UAH 7,818,900.00).

The purpose of the Draft Law, as can be seen from its explanatory note, is simplification of the mechanism for the above-mentioned SPs to fulfill their tax duties related to payment of unified tax by them. As People's Deputy Yaroslav Zheleznyak, an initiator of the Draft Law, noted, the Draft Law is targeted at IT specialists, marketers, consultants, accountants registered as sole proprietors – unified tax taxpayers.

The Draft Law provides for the following changes for SPs who will be covered by its provisions:

 

Payments procedure

• SPs will make only monetary cashless payments.
   

Income of a unified tax taxpayer

• SP’s income will constitute the amount of funds credited to his/her special business bank account.
   

Unified tax rate

• 5% of income amount (the rate provides for VAT inclusion in unified tax amount).
   

Procedure and time frames of unified tax accrual and payment

• Within a month from the date of registration as a unified tax taxpayer, SP must open a special business bank account (if the account is not opened within the specified time, SP will be subject to the general rules of taxation with unified tax applicable to other third group unified tax taxpayers). The special business bank account can be opened in only one bank. The bank must inform the supervisory authority where SP has been put on record about opening or closure of the account. In case of closure of the account, the supervisory authority makes a decision on extending to SP of the third group unified tax taxation general rules.

• SP must submit an application to the supervisory authority at the place of its tax address for appointing of the bank where his/her special business bank account has been opened as his/her tax agent. The procedure for submission and the form of the application are to be approved by the Ministry of Finance of Ukraine.

• The bank where SP’s special business bank account has been opened is his/her tax agent, and is obliged, while crediting funds to the specified account, to withhold a unified tax from the credited amount, and to remit the tax to the budget no later than in the next two business days.

• The tax payment is made at SP’s tax address.

• In a similar way must be made the payment of the unified tax amount accrued for excess of the permitted by the TCU SP’s income volumes (1167 minimal wages).
   

Tax reporting

• SPs are not subject to the general rules for submitting a tax return of a unified tax taxpayer applicable to other third group unified tax taxpayers.

• In case of crediting of funds to SP’s bank account, SP’s bank – tax agent must submit to the supervisory authority the tax calculation of the credited amounts and the unified tax amounts withheld from the credited ones, as well as submit other information regarding taxation of a taxpayer's income in accordance with the TCU provisions.

• The tax (reporting) period for SPs’ banks – tax agents is a calendar quarter.
   

Communication with supervisory authorities

• At the request of the supervisory authority, SP’s bank – tax agent must provide it with information on transactions on SP’s special business bank account, namely information as of a specified date or for a specified period of time regarding transactions of crediting funds to the account, the purpose of payment, identification data and a counterparty's bank account number.

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Mandatory state social insurance unified contribution (Contribution)

• SPs do not pay the Contribution themselves. The relevant duties of the Contribution payer provided by law, including accrual, calculation and payment of the Contribution, will be entrusted to SP’s bank – tax agent. The bank will be a payer of the Contribution under the law and will be put on record as the Contribution payer.

• The Contribution will be accrued in the amount of the minimum insurance contribution for each insured person – unified tax taxpayer (SP).

• The bank will pay the Contribution from the funds available in SP’s special business bank account. In case of receiving a notification from the bank about the lack in SP’s special business bank account of funds, necessary for payment of the Contribution, as of the first day of the reporting month, the supervisory authority makes a decision on extending to SP of the third group unified tax taxation general rules.

 

Thus, SPs will only have to register as the third group unified tax taxpayers who are subject to the abovementioned legislative amendments, open a special business bank account and also appoint the same bank as his/her tax agent. Henceforth, fulfillment of other tax duties, in particular, accrual and payment of the unified tax and the Contribution, preparation and submission of tax reports, communication with the supervisory authorities, shall be borne on the bank as SP’s tax agent. According to intention of the Draft Law initiators, SP will further simply carry out his/her business activities and receive income generated from it.

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Moreover, the abovementioned tax regime is also planned to be integrated with the DIIA platform, specifically, with regard to submitting applications for choosing of such tax regime and opening special business bank accounts. In view of legislators, this will constitute another step on the way to implementing the concept of a digital state in Ukraine.