Remuneration paid under the “ePidtrymka” Program is not subject to personal income tax and military levy

Press service of the State Tax Service of Ukraine, published 20 December 2021 at 15:41 Chapter: News

Law of Ukraine as of 02.12.2021 № 1932-IX “On Amendments to the Law of Ukraine “On the State Budget of Ukraine for 2021” to provide remuneration under the “ePidtrymka” Program amended the Law of Ukraine as of 15.12.2021 № 1082-X “On the State Budget of Ukraine for 2021” (hereinafter – Law № 1082), namely, that procedure for providing remuneration under the “ePidtrymka” Program, its size and requirements for entities are approved by the Cabinet of Ministers of Ukraine (Paragraph 12 Section Final Provisions ”of the Law № 1082).

Annex № 3 to the Law № 1082 “Allocation of State Budget Expenditures of Ukraine for 2021” provides for state budget remuneration for budgetary program “Remuneration under the “ePidtrymka” Program”.

Resolution of the Cabinet of Ministers of Ukraine as of 09.12.2021 № 1272 approved Procedure for using funds provided in the state budget to ensure remuneration under the “ePidtrymka” Program (hereinafter – Procedure), which defines mechanism for using these funds (hereinafter – budgetary funds).

At the same time, budgetary funds (hereinafter – remuneration) are transferred to individuals – citizens of Ukraine aged 18 years and older, who have been assigned a registration number of the taxpayer’s account card, who have a certificate in mobile application “Diia” Portal confirming receipt of a full course of vaccination against acute respiratory disease COVID-19 caused by coronavirus SARS-CoV-2, one dose of single-dose vaccine or two doses of two-dose vaccine (green certificates) included by the World Health Organization in the list of permitted for use in emergencies (hereinafter – recipients) according to Procedure within a framework of the “ePidtrymka” Program, approved by Resolution of the Cabinet of Ministers of Ukraine as of 09.12.2021 № 1272 “Some features of remuneration under the “ePidtrymka” Program.

In addition, Paragraph 2 of Procedure stipulates that the main administrator of budgetary funds and responsible executor of budgetary program is the Ministry of Economy of Ukraine.

Provisions of Procedure stipulate that for the payment of remuneration to recipients:

Ministry of Economy of Ukraine opens a non-budgetary account of Group 35 in the Treasury (hereinafter – non-budgetary account) (Paragraph 4 of Procedure);

Treasury ensures opening of appropriations of general fund of the state budget and basing on payment order of the Ministry of Economy of Ukraine transfers amount from the registration account of general fund of the state budget of the Ministry of Economy of Ukraine for which the appropriation is opened to the non-budgetary account of the Ministry of Economy of Ukraine.

Personal income tax and its taxation is regulated by Section IV of the Tax Code of Ukraine (hereinafter – Code) according to Sub-paragraph 165.1.1 Paragraph 165.1 Article 165 which stipulates that total monthly (annual) taxable taxpayer’s income does not include, in particular, amount of state and social material remuneration, compensation (including cash refunds for people with disabilities, for children with disabilities in the implementation of individual rehabilitation programs for people with disabilities, amount of maternity benefits), benefits and insurance benefits received by the taxpayer from budgets and funds of obligatory state social insurance and form of financial remuneration to persons with disabilities from the Fund for Social Protection of Persons with Disabilities according to the law.

Sub-paragraph 1.7 Paragraph 16¹ Sub-section XX “Final provisions” of the Code stipulates that income not included in the total taxable income of individuals under Section IV of this Code shall be exempted from personal income tax (not subject to taxation, taxed at zero rate).

As follows, as the remuneration is paid within the budgetary “ePidtrymka” Program, as well as from funds provided in the state budget for a year, amount of such remuneration is not included in the total monthly (annual) taxable taxpayer’s income, ie not subject to personal income tax according to Sub-paragraph 165.1.1 Paragraph 165.1 of Article 165 of the Code and military levy according to Sub-paragraph 1.7 Paragraph 16¹ Sub-section 10 Section XX “Final Provisions” of the Code.

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