STS records frequent cases of single tax payers’ excess of income

It must be emphasized for individuals – entrepreneurs who are the single tax payers that from 06.08.2020 the audit moratorium regarding termination of business activity is lifted according to Sub-paragraph 78.1.7 Paragraph 78.1 Article 78 of the TCU.

During audits, it is established that taxpayers exceed amount of income that allows them to be on the simplified taxation system of accounting and reporting. As a result, according to the documentary audit results, the taxpayers are transferred to the general taxation system and excluded from Register of the single tax payers.

28 such cases were identified in the first half of 2021. In total, more than 80 million UAH was additionally accrued as a result of these audits.

Reminder! Income of the single tax payer – individual entrepreneur is income received during the (reporting) period in cash (and / or non-cash form); tangible or intangible form according to Article 292 of the TCU.

However, since the majority of taxpayers (simplified taxpayers) do not keep tax records, primary documents, so in a case of transfer of the single taxpayer to the general taxation system there is no possibility to reduce taxable income by the amount of documented expenses related to income. As a result, based on the audit results, significant amounts of taxes and fees are additionally accrued.

Herewith please note that for tax purposes, the taxpayers are required to keep records of income, expenses and other indicators related to the definition of taxation objects and / or tax liabilities on the basis of primary documents, accounting registers, financial reporting, other documents related to the calculation and payment of taxes and fees, maintenance of which is provided by the law according to Paragraph 1 Article 44 of the TCU.

In view of the above specified, the State Tax Service of Ukraine recommends individuals – entrepreneurs who are registered on the simplified taxation system to ensure storage of primary documents and keep records of income, expenses and other indicators related to the definition of taxation objects and / or tax liabilities.

Communicate with the State Tax Service remotely using the “InfoTAX” service