Can an individual’s income received from entrepreneurial activity be a basis for calculation of levy for the one-time (special) voluntary declaration, without state registration as an individual – entrepreneur and...?
Can an individual’s income received from entrepreneurial activity be a basis for calculation of levy for the one-time (special) voluntary declaration, without state registration as an individual – entrepreneur and, accordingly, without payment of taxes, levies (mandatory payments), including due to the act that contains signs of a criminal offense and / or in respect of which a pre-trial investigation or court proceedings have been initiated?
Law of Ukraine as of 15.06.2021 № 1539-IX “On amendments to the Tax Code of Ukraine and other laws of Ukraine to stimulate un-shadowing of income and increase citizens’ tax culture by introducing the one-time (special) voluntary declaration of assets belonging to individuals and payment of one-time levy to the budget” (hereinafter – the Law № 1539) introduced amendments to the Tax Code of Ukraine as of 02.12.2010 № 2755-VI with changes and amendments (hereinafter – the TCU), in particular, Section XX “Transitional Provisions” was amended with Sub-section 94.
Paragraph 1 Sub-section 94 Section XX “Transitional provisions” of the TCU stipulates that the one-time (special) voluntary declaration is a special procedure for voluntary individual’s declaration of assets located on the territory of Ukraine and / or abroad, if such individual’s assets were received (acquired) by at the expense of income subject to taxation at the time of their accrual (receipt) in Ukraine and from which taxes and levies have not been paid or not in full amount according to legislative requirements on taxation and / or international agreements, the binding nature of which was approved by the Verkhovna Rada of Ukraine and / or which were not declared in violation of tax and currency legislation, control over which is entrusted to the controlling bodies during any of the tax periods that occurred before 01.01.2021.
One-time (special) voluntary declaration is conducted from 01.09.2021 to 01.09.2022 and provides for payment of levy for the one-time (special) voluntary declaration in manner, terms and amounts established by the TCU and other conditions specified in Sub-section 94 Section XX “Transitional Provisions” of the TCU.
Submission of the one-time (special) voluntary declaration (hereinafter – the Declaration) is not a separate special procedure for official state’s recognition or confirmation of origin, transfer or termination of rights for assets in respect of which such Declaration is submitted.
Paragraph 3 Sub-section 94 Section XX “Transitional Provisions” of the TCU stipulates that the one-time (special) voluntary declaration may be used by resident individuals, including self-employed individuals, as well as individuals who are not residents of Ukraine but who were residents at the time of receipt (acquisition) of the declaration objects or at the time of accrual (receipt) of income from which the declaration objects were received (acquired) and who are or were taxpayers (hereinafter – declarant) according to the TCU.
Sub-paragraph 14.1.280 and 14.1.281 Paragraph 14.1 Article 14 of the TCU stipulates that objects of the one-time (special) voluntary declaration may be individual’s assets owned by the declarant (including joint partial or joint common ownership right) and are (registered, in circulation, turnover, etc.) on the territory of Ukraine and / or abroad as of the date of submission of the one-time (special) voluntary declaration, list of which is specified in Paragraph 4 Sub-section 94 Section XX of the TCU.
Herewith, Paragraph 5 Sub-section 94 Section XX “Transitional Provisions” of the TCU determines that the declaration objects cannot be:
a) individual’s assets received (acquired) by the declarant as a result of an act that contains signs of a criminal offense, except for criminal offenses or other violations of the law related to:
evasion of taxes and levies(mandatory payments);
payment evasion of the single contribution to obligatory state social insurance and insurance contributions to the obligatory state pension insurance;
violations in the currency legislation sphere;
violations in the protection of economic competition in a part of violation provided for in Paragraph 12 Article 50 of the Law of Ukraine as of 11.01.2001 № 2210-III “On protection of economic competition” with changes and amendments;
b) individual’s assets belonging to the declarant, in respect of which a pre-trial investigation or court proceedings have been initiated against such assets on the grounds of criminal offenses under Article 212, 2121, as well as Article 366 (regarding documents of tax and / or financial reporting, customs declarations, tax invoices, primary documents, other reporting on taxes, levies (mandatory payments), Article 367 (if a criminal offense is related to violation of tax, customs, currency and other legislation, control over the observance of which is entrusted to the controlling bodies) of the Criminal Code of Ukraine as of 05.04.2001 № 2341-III with changes and amendments (hereinafter – the Criminal Code).
Given the above specified, the basis for calculation of levy for the one-time (special) voluntary declaration cannot be assets received (acquired) at the expense of income subject to taxation at the time of their accrual (receipt) in Ukraine, from which taxes and levies have not been paid or paid not in full amount in periods up to 01.01.2021 in respect of which a pre-trial investigation or court proceedings have been initiated on the grounds of criminal offenses prescribed in Article 212, 2121, as well as Article 366 (regarding documents of tax and / or financial reporting, customs declarations, tax invoices, primary documents, other reporting on taxes, levies (mandatory payments), Article 367 (if a criminal offense is related to violation of tax, customs, currency and other legislation, control over the observance of which is entrusted to the controlling bodies) of the Criminal Code.
At the same time, if an individual has assets received (acquired) at the expense of income subject to taxation in Ukraine at the time of their accrual (receipt) from which taxes and levies have not paid or paid not in full amount in the period up to 01.01.2021 and for such assets there is any initiated pre-trial investigation or court proceedings on the grounds of criminal offenses under Article 212, 2121, as well as Article 366 (regarding documents of tax and / or financial reporting, customs declarations, tax invoices, primary documents, other reporting on taxes, levies (mandatory payments), Article 367 (if a criminal offense is related to violation of tax, customs, currency and other legislation, control over the observance of which is entrusted to the controlling bodies) of the Criminal Code – such individual may independently decide to submit the Declaration.
