Does an individual-entrepreneur on the general taxation system have a right to include cash register purchased for use in entrepreneurial activity, cost of which does not exceed 20 thousand UAH?

Information and Reference Department, published 28 June 2022 at 11:36 Chapter: News

Income taxation procedure received by an individual-entrepreneur on the general taxation system from entrepreneurial activity is defined in Article 177 of the of the Tax Code of Ukraine № 2755-VI as of 02.12.2010 with changes and amendments (hereinafter – TCU).

Taxation object is the net taxable income, ie difference between the total taxable income (revenue in cash and in kind) and documented expenses related to the entrepreneurial activity of such individual-entrepreneur (Paragraph 177.2 Article 177 of the TCU).

List of expenses directly related to the receipt of income includes other expenses, which include expenses related to the conduction of entrepreneurial activities, which are not specified in Sub-paragraphs 177.4.1 - 177.4.3 Paragraph 177.4 Article 177 of the TCU, which include cost of business trips of employees, communication services, advertising, payment for settlement and cash services, rent, repair and operation of property used in entrepreneurial activities for transportation of finished products (goods), freight forwarding and other services related to transportation of products (goods), cost of purchased services directly related to the production of goods, performance of works, provision of services (Sub-paragraph  177.4.4 Paragraph 177.4 Article 177 of the TCU).

At the same time, cost of acquisition, self-manufacturing of fixed assets is not included in the individual-entrepreneur’s costs (Sub-paragraph 177.4.5 Paragraph 177.4 Article 177 of the TCU).

Concept of "fixed assets" is defined in Sub-paragraph 14.1.138 Paragraph 14.1 Article 14 of the TCU, which stipulates that fixed assets are tangible assets, including reserves of minerals provided for the use of subsoil areas (except for the cost of land, unfinished capital investments, public roads, library and archival funds, tangible assets, cost of which does not exceed 20 thousand UAH, non-productive fixed assets and intangible assets), appointed by the taxpayer for use in entrepreneurial activity, cost of which exceeds 20 thousand UAH and gradually decreases due to physical or moral wear and tear and the expected useful life (operation) of which from the date of commissioning is more than one year (or operating cycle, if longer than one year).

As follows, individual-entrepreneur on the general taxation system has a right to include registrar of settlement operations in expenses purchased for the use in entrepreneurial activity, cost of which does not exceed 20 thousand UAH.

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