What is procedure for submitting the corporate income tax declaration, if the taxpayer (who applies annual or quarterly reporting period) within one quarter switched to payment of single tax of Group III at 2% rate and...

Information and Reference Department, published 15 June 2022 at 09:31 Chapter: News

Paragraph 137.4 Article 137 of the Tax Code of Ukraine № 2755-VI as of 02.12.2010 with changes and amendments (hereinafter – TCU) stipulates that tax (reporting) periods for the corporate income tax, except as provided in Paragraph 137.5 Article 137 of the TCU, are calendar: quarter, half year, three quarters, year. Herewith, tax declaration is calculated as a cumulative total.

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

Corporate income taxation of taxpayers, who have temporarily switched to the single tax of Group III according to Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU, is carried out taking into account peculiarities specified in Sub-paragraph 9.12 Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU.

Particularly, Clauses 6 – 7 of Sub-paragraph 9.12 Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU determine that taxpayer who has switched to payment of single tax at 2% rate during a calendar year, if such taxpayer resumes the corporate income tax payment in the same year, compiles and submits the corporate income tax declaration on a cumulative basis from the beginning of such calendar year. Results of activity for periods of stay on the single tax payment at 2% rate are not taken into account determining the corporate income taxation object, specified in Sub-paragraph 134.1.1 Paragraph 134.1 Article 134 of the TCU, taking into consideration provisions of Sub-section 4 Section XX "Transitional Provisions" of the TCU for income tax payers who have made a transition from the simplified taxation system to the general one. 

Amount of annual income from any activity (excluding indirect taxes) of the corporate income tax payer for purposes of application of Sub-paragraphs 39.2.1.7 and 39.2.1 Paragraph 39.2 Article 39, Sub-paragraph 134.1.1 Paragraph 134.1 Article 134 and Paragraph 137.5 Article 137 of the TCU is calculated for the entire reporting year, including income received during periods of such year, in which such taxpayer was on the single tax payment at 2% rate.

Therefore, if the taxpayer who applies annual or quarterly reporting period, during one quarter (in the middle of the second quarter, for example from May 01, 2022) switched to the single tax of Group III at 2% rate and returned to the general taxation system (for example, from June 01, 2022), such taxpayer compiles and submits the corporate income tax declaration for reporting period of the first half of 2022.

This declaration must contain the cumulative results of activities from January 1 of the reporting year to the date of transition to the single tax and financial reporting is submitted as a part of such declaration compiled according to results of activities for this period.

After the payer resumes the corporate income tax payment, if such taxpayer uses the annual reporting period in 2022, must submit the corporate income tax declaration for the reporting period – 2022.

In case of the taxpayer’s return, who applies the quarterly reporting period in 2022, to the general taxation system, for example in the second quarter (from June 01, 2022), such taxpayer submits corporate income tax declaration after resumption of the single tax payment for results of 9 months of 2022 and 2022.

At the same time, the taxpayer who during a calendar year switched to the single tax at 2% rate in the same year resumes the corporate income tax payment, compiles and submits corporate income tax declaration cumulatively from the beginning of such calendar year, in which determining the corporate income taxation object specified in Sub-paragraph 134.1.1 Paragraph 134.1 Article 134 of the TCU, does not take into account results of activities for periods of the single tax payment at 2% rate, taking into consideration provisions of Sub-section 4 Section XX "Transitional Provisions" of the TCU for income tax payers who have made a transition from the simplified taxation system to the general one.

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