Functioning of the Electronic cabinet has been improved and activity of individuals – entrepreneurs has been simplified according to signed Law № 786-IX

The President signed the Law № 786-IX “On Amendments to the Tax Code of Ukraine Regarding Functioning of the Electronic Cabinet and Simplification of Work for Individuals – Entrepreneurs” which was adopted by the Verkhovna Rada of Ukraine on July 14, 2020.

The Law expands functionality of the Electronic cabinet, simplifies accounting for individuals and amends certain provisions of the Tax Code of Ukraine regarding the tax administration.

Thus, agreement on the recognition of electronic documents for registration in the taxpayer’s Electronic cabinet has been canceled and it is envisaged that the Electronic cabinet will display tax notifications-decisions made by the supervisory authorities. It is also possible to change the taxpayer’s authorized individuals who have the right to use the Electronic cabinet.

For individuals – entrepreneurs and individuals who carry out independent professional activity, the Law provides possibility to keep records of income and expenses in a form convenient for them – paper and / or electronic, including through the Electronic cabinet.

The standard form of such accounting and the procedure for its maintenance is determined by the Ministry of Finance.

Changes have also been made to the audit procedure. Norms that gave the supervisory authorities right to interview employees and employers about paid passive income, other additional benefits and compensations when checking the registration of employees have been excluded.

Supervisory authorities have the right to conduct unscheduled documentary audits at the taxpayer’s request for the quarantine period.

The first monthly reporting period is July 2020 for the VAT payers who pay the single tax and apply the quarterly reporting period.

Amount of fines for the VAT violators of the deadline for registration of tax invoices and / or calculation adjustments to the following tax invoices in the Unified register of tax invoices has also been reduced:

- in case of registration absence – 2.5% (previously was 5%) of the volume of supply without the VAT, but not more than 1700 UAH (previously was 3 400 UAH);

- in case of late registration – 1% (was 2%) of the volume of supply without the VAT, but not more than 510 UAH (was 1 020 UAH).

The Law enters into force on the day following the day of publication, excepting some changes, which come into force 3 months after the publication of the Law and from January 1, 2021.