Does an individual-entrepreneur – single tax payer of Group III, who in 2022 applied of 3 or 5% single tax rate, submit the single tax payer’s declaration with the cumulative total from the beginning of year for the reporting periods of 2022, in case...

Does an individual-entrepreneur – single tax payer of Group III, who in 2022 applied of 3 or 5% single tax rate, submit the single tax payer’s declaration with the cumulative total from the beginning of year for the reporting periods of 2022, in case of such payer’s transition to 2% rate during the martial law on the territory of Ukraine?

Clause 2 of Paragraph 294.1 Article294 of the of the Tax Code of Ukraine № 2755-VI as of 02.12.2010 with changes and amendments (hereinafter – TCU) stipulates that tax (reporting) period for the single tax payers of Group III is the calendar quarter (except for tax period for the value added tax reporting, defined in Paragraph 202.1 Article 202 of the TCU).

Single tax payers of Group III submit the single tax payer’s declaration to the supervisory body within terms established for the quarterly tax (reporting) period (Clause 1 Paragraph 296.3 Article 296 of the TCU).

Tax declaration is made up of cumulative totals according to Clause 296.7 Article 296 of the TCU.

Single tax payer’s declaration for individual-entrepreneur was approved by Order of the Ministry of Finance of Ukraine № 578 as of 19.06.2015 (as amended by Order of the Ministry of Finance of Ukraine № 752 as of 09.12.2020) (hereinafter - Declaration form № 752).

Paragraph 293.3 Article 293 of the TCU established that the single tax for payers’ percentage rate of Group III is set at the rate of:

1) 3 percent of income - in case of the value added tax payment according to the TCU;

2) 5 percent of income - in case of inclusion of value added tax in the composition of single tax.

At the same time, temporarily, from April 1, 2022 until termination or abolition of the martial law on the territory of Ukraine, the single tax percentage rate for the single tax payers of Group III, who use the special taxation peculiarities determined in Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU, is set at 2 percent income rate determined according to Article 292 Chapter 1 Section XIV of the TCU (Sub-paragraph 9.4 Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU).

Tax (reporting) period for the single tax payers of Group III, who use special taxation peculiarities, established by Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU, is equal to a calendar month (Sub-paragraph 9.6 Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU).

Single tax payer’s declaration form of Group III for a period of the martial law and state of emergency in Ukraine, is approved by Order of the Ministry of Finance of Ukraine № 124 as of 26.04.2022 (hereinafter - Declaration form № 124).

Clauses 1 and 2 of Sub-paragraph 9.9 Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU provide that after termination or cancellation of the martial law, state of emergency in the territory of Ukraine, single tax payers of Group III, who on the day of the termination or cancellation of the martial law, state of emergency on the territory of Ukraine, used special taxation peculiarities, determined in Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU, from the first day of a month following the month of termination or cancellation of the martial law or state of emergency on the territory of Ukraine, lose a right to use special taxation peculiarities, established in Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU, and are automatically considered to use taxation system on which such taxpayers were before choosing special taxation peculiarities provided for in Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU.

Taxpayer has a right to independently refuse to use taxation peculiarities provided for in clause Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU, from the first day of a month following the month in which such decision was made.

Clause 1 of Paragraph 49.2 Article 49 of the TCU stipulates that the taxpayer is obliged for each reporting period established by the TCU in which taxation objects arise or in the case of indicators that are subject to declaration, according to requirements of the TCU, to submit tax declarations for each individual tax of which he / she is a payer. Clause 1 of Paragraph 49.2 Article 49 of the TCU applies to all taxpayers, including taxpayers who are on the simplified taxation system, accounting and reporting.

Individual-entrepreneur – single tax payer of Group III, who in 2022 applied single tax rate of 3 or 5 percent and for a period of the martial law on the territory of Ukraine switched to the single tax rate of 2 percent, submits the Declaration in form № 752 for the reporting periods in which he / she received income taxed at 3 or 5 percent rate, but does not submit the following declaration for the reporting periods of 2022 cumulatively from the beginning of year. 

At the same time, the specified single tax payer submits Declaration in form № 124 monthly for the reporting months in which he / she received income taxed at 2 percent rate.

More information is in the “Knowledge Base” of public information and reference resource