258.2 thousand individuals – entrepreneurs who operated without application of the simplified taxation system declared income for 2020

Press service of the State Tax Service of Ukraine, published 04 February 2021 at 11:16 Chapter: News

Declaration of income for 2020 by taxpayers – individuals has been ongoing since the beginning of 2021. Individuals – entrepreneurs who do not apply the simplified taxation system must submit declarations of received income within the economic activity by 09.02.2021.

At the same time in 2020, almost 258.2 thousand individuals – entrepreneurs who carried out activities without application of the simplified taxation system submitted property and income tax declarations for 2019.

Of these, 252.4 thousand individuals – entrepreneurs declared income within 1 million UAH, which is almost 98% of the total number of submitted declarations. Also, 5.1 thousand individuals – entrepreneurs declared income of more than 1 million UAH but within 20 million UAH, which is almost 2%. In addition, 612 individuals – entrepreneurs declared income of more than 20 million UAH, which is less than 0.5% of the total number of submitted declarations.

Thus, 257.5 thousand individuals – entrepreneurs (more than 99.5%) who received income within 20 million UAH limits, taking into account the incurred expenses, declare income on average not more than 12 thousand UAH per year. As follows, one entrepreneur earns about 1 thousand UAH per month, which is even much lower than the minimum wage.

Data analysis of submitted tax declarations shows a high probability of risks of minimizing declared income and paid taxes, particularly due to overstatement of level of expenses.

For example, individual – entrepreneur “M” carries out activities for the provision of information services (retail network for trade of periodicals and other consumer goods) and declares income for 2019 in the amount of 3.1 million UAH. Taking into account the incurred costs, this entrepreneur receives about 3.6 thousand UAH per month. Individual – entrepreneur also has 5 officially employed employees with a salary of 3.7 thousand UAH, while having 15 outlets.

Another example, individual – entrepreneur “K” carries out the retail sale of food, beverages and tobacco products and declares income for 2019 in the amount of 13.1 million UAH. This individual – entrepreneur has 40 officially employed employees in 44 stores, with an average salary of 5.7 thousand UAH.

Individual – entrepreneur “C” carries out activities for the provision of services by freight road transport and declares for 2019 in the amount of 19 million UAH. In the absence of officially employed employees, this individual – entrepreneur uses 8 trucks and 7 flatbed semi-trailers in its economic activity. This indicates the use of undocumented employees as drivers of these vehicles.

Such facts are the basis for an in-depth attention of tax authorities and further inclusion in the schedule of documentary scheduled audits after the expiration of moratorium on audits.

Herewith during 2020, the State Tax Service received more than 1 thousand appeals from concerned citizens regarding possible violations of tax and other legislation by the taxpayers. Such information is used by tax authorities during audits.

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