Taxation is simplified due to the imposition of martial law.
From April until the cessation or abolition of martial law, the state of emergency in Ukraine payers of the single tax of the third group can be individuals – entrepreneurs and legal entities – business entities of any legal form, whose income for the calendar year does not exceed 10 billion hryvnia. This is stated in the explanation of the State Tax Service.
Note that such persons are not subject to the limit on the number of persons in employment with them.
The list of restrictions has been reduced for business entities that plan to register as payers of the single tax of the third group with a rate of 2% of income.
Who can not be (FLP) FOP 3 groups at a rate of 2%
Can not choose a simplified system of taxation with a single tax at a rate of 2% of income:
1. Business entities (legal entities and natural persons – entrepreneurs) that carry out:
- activities for the organization, conduct of gambling, lotteries (except for the distribution of lotteries), betting (bookmaker betting, betting);
- foreign exchange;
- production, export, import, sale of excisable goods (except for retail sale of fuels and lubricants in containers up to 20 liters and activities of individuals related to the retail sale of beer, cider, peri (excluding alcohol) and table wines);
mining, sale of minerals.
2. Insurance (reinsurance) brokers, banks, credit unions, pawnshops, leasing companies, trust companies, insurance companies, funded pension institutions, investment funds and companies, other financial institutions specified by law; securities registrars.
3. Representative offices, branches, offices and other separate subdivisions of a legal entity that is not a single tax payer.
4. Individuals and legal entities – non-residents.
Deadline for filing an FLP 3 group application under the simplified system
The application form for the application of the simplified taxation system was approved by the order of the Ministry of Finance of Ukraine of July 16, 2019 № 308.
For newly registered in the manner prescribed by law business entities, the deadline for submission of applications is 10 days from the date of state registration. Such business entities can be considered payers of the single tax of the third group from the date of their state registration.
For operating business entities that will exercise the right to switch to the simplified taxation system with a single tax rate of 2% of income, the deadlines for submitting applications have been changed.
Such enterprises may apply to the supervisory authority for the purpose of choosing a simplified taxation system with a rate of 2% of income.
How to apply for a 2% rate
In the special field rate in percent to the income of line 5.1.1 The selected single tax rate when switching to the simplified taxation system of the application, the rate of 2% of the single tax is indicated.
Registration of an enterprise as a single tax payer with a rate of 2% of income is carried out by entering it into the Register of Single Tax Payers. On the official web portal of the State Tax Service at the link http://cabinet.tax.gov.ua the possibility of checking the affiliation of the business entity to the payers of the single tax with a rate of 2% of income is implemented.
The interest rate for single tax payers of the third group, using the features of taxation, is set at 2% of income.
That FLP 3 groups on a simplified system will not pay
Payers of the single tax with a rate of 2% of income are exempt from the obligation to accrue, pay and submit tax returns on the following taxes and fees:
- corporate income tax, except for the cases provided for in the second and third subparagraphs of sub-clause 133.1.1 and sub-clause 133.1.4 of clause 133.1 of Article 133 of the Code;
- personal income tax in respect of income (object of taxation) received as a result of economic activity of the single tax payer (individual) and taxable in accordance with Chapter 1 of Section XIV of the Code;
- VAT on transactions for the supply of goods, works and services, the place of delivery of which is located in the customs territory of Ukraine;
- land tax for land used by payers of the single tax of the third group at a rate of 2 percent of income for economic activities (except for the provision of land and / or real estate on such land for rent (rent), loan, on another right of use).
In addition, according to subparagraph 69.14 of paragraph 69 of subsection 10 of section XX “Transitional Provisions” of the Code taxpayers, including single tax payers of the third group with a rate of 2% of income, temporarily, for the period from March 1, 2022 to December 31 , following the year in which the martial law, state of emergency is terminated or revoked, no land fee (land tax and rent for land plots of state and communal property) is accrued or paid for land plots (land plots (shares)) located on territories where hostilities are being conducted (conducted) or in territories temporarily occupied by the armed forces of the Russian Federation, and are owned or used, including on lease, by individuals or legal entities, as well as for land plots (land shares) ), defined by regional military administrations as clogged with explosive objects and / or having fortifications .
Land plots are determined within the territories where hostilities are being conducted (conducted) or temporarily occupied by the armed forces of the Russian Federation, the list of which is approved by the Cabinet of Ministers.
However, according to subparagraphs 69.15 – 69.16 of paragraph 69 of subsection 10 of section XX “Transitional Provisions” of the Code for taxpayers, including for single tax payers of the third group with a rate of 2% of income, provides exemption from accrual and payment:
- of the general minimum tax liability for land plots located in territories where hostilities are taking place or in territories temporarily occupied by the armed forces of the Russian Federation, and / or for land plots determined by regional military administrations as clogged with explosives and / or on which there are fortifications, for 2022 and 2023 tax (reporting) years;
- environmental tax for objects of taxation located in the territories where hostilities are conducted (conducted) or in the territories temporarily occupied by the armed forces of the Russian Federation.
The list of territories where hostilities are being conducted (conducted) or temporarily occupied by the armed forces of the Russian Federation is determined by the Cabinet of Ministers.
FOP 3 groups and VAT
Payers of the single tax of the third group, using the features of taxation, are exempt from the obligation to accrue, pay and submit VAT tax returns on transactions for the supply of goods, works and services, the place of delivery of which is located in the customs territory of Ukraine.
Thus, the application of a tax rate of 2% of income implies the inclusion of VAT in the single tax (as in the case of a single tax rate of 5% of income).
Entities that choose the third group of the single tax with a rate of 2% of income and will be in the status of a VAT payer during the transition to the simplified taxation system, registration of the VAT payer is not canceled, but suspended for the period of stay of such entity in the third group of the single tax rate. 2% of income.
At the same time, such taxpayers are deprived of the right to draw up tax invoices and adjustments for transactions, the date of occurrence of tax liabilities for which accounted for (accounted for) for the period of such entity in the third group of the single tax at 2% of income.
As the business entity in the third group of the single tax with a rate of 2% of income has no objects of VAT taxation and taking into account paragraphs 9.5 of subsection 8 of section XX “Transitional Provisions” of the Code and 49.2 of section II of the Code such entity has no connection reporting on value added tax on transactions for the supply of goods, works and services, the place of delivery of which is located in the customs territory of Ukraine.
What to expect after the end of the war
After the termination or cancellation of martial law in the territory of Ukraine, payers of the single tax of the third group, on the day of termination or cancellation of martial law, state of emergency in Ukraine used the features of taxation established by paragraph 9 of subsection 8 of section XX , following the month of termination or abolition of martial law, state of emergency in Ukraine, lose the right to use the features of taxation provided for in this paragraph, and are automatically considered to apply the taxation system on which such taxpayers were before choosing the features of taxation provided for in this paragraph.
In addition, single tax payers have the right to refuse to use the features of taxation provided for in paragraph 9 of subsection 8 of section XX “Transitional Provisions” of the Code, from the first day of the month following the month in which such decision was made, or lose the right to use such features taxation from the first day of the month following the month in which the maximum amount of income provided by the Code (10 billion hryvnias) is exceeded.
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Earlier we wrote about how the tax system has changed. Read about this in detail in the article by Yulia Samaeva, editor of ZN.UA – “Wartime Taxes”.
