Do individuals-entrepreneurs pay single contribution, individuals involved in independent professional activity and farm members for themselves during the martial law in Ukraine?Chapter: News

Part 1 Article 4 of the Law of Ukraine № 2464-VI as of 08.07.2010 “On collection and accounting of single contribution to obligatory state social insurance” with changes and amendments (hereinafter – Law № 2464) stipulates that payers of single contribution to obligatory state social insurance (hereinafter – single contribution) are:

individuals-entrepreneurs, including those who chose simplified taxation system (Paragraph 4 of Part 1 Article 4 of the Law № 2464);

individuals, who conduct independent professional activities, namely scientific, literary, artistic, educational or teaching, as well as medical, legal practice, including advocacy, notary activities or individuals, who conduct religious (missionary) activities, other similar activity and receive income from this activity (Paragraph 5 of Part 1 Article 4 of the Law № 2464);

farm members, if they do not belong to individuals, who are subject to insurance on other grounds (Paragraph 5 Note 1 of Part 1 Article 4 of the Law № 2464).

Clause 1 of Paragraph 2 of Part 1 Article 7 of the Law № 2464 stipulates that single contribution is charged for payers specified in Sub-paragraphs 4 (except for individuals-entrepreneurs who chose the simplified taxation system), 5 and 5 Note 1 of Part 1 Article 4 of the Law № 2464 on the amount of income (profit) received from their activities subject to the personal income taxation. At the same time, amount of single contribution cannot be less than amount of the minimum insurance contribution for a month in which income (profit) is received.

In case that such payer did not receive income (profit) in the reporting period or a separate month of the reporting period, such payer has a right to independently determine the calculation base, but not more than the maximum value of single contribution calculation base, established by the Law № 2464. Herewith, amount of single contribution cannot be less than amount of the minimum insurance contribution (Clause 2 of Paragraph 2 of Part 1 Article 7 of the Law № 2464).

Law of Ukraine № 2120-IX as of 15.03.2022 "On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding the validity of norms during the martial law" made changes to Section VIII "Final and Transitional Provisions" of the Law № 2464.

Clause 1 of Paragraph 9 Note 19 Section VIII "Final and Transitional Provisions" of the Law № 2464 stipulates that temporarily from March 1, 2022 until termination or abolition of the martial law in Ukraine and within twelve months after termination or abolition of the martial law, individuals specified in Sub-paragraphs 4, 5 and 5 Note 1 of Part 1 Article 4 of the Law № 2464 have a right not to accrue, calculate and single contribution for themselves. At the same time, the provision of Clause 2 of Paragraph 2 of Part 1 Article 7 of the Law № 2464 regarding such periods is not applicable to such individuals.

Such persons do not complete calculation of single contribution as the tax declaration part for the period in which, according to Clause 1 Paragraph 9 Note 19 Section VIII "Final and Transitional Provisions" of the Law № 2464, the single contribution was not accrued, calculated and paid (Clause 2 of Paragraph 9 Note 19 Section VIII "Final and Transitional Provisions" of the Law № 2464).

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