How is option or transition to the simplified taxation system with special taxation procedure carried out during the martial law?

Information and Reference Department, published 21 November 2022 at 13:35 Chapter: News

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 application of norms during the martial law" amended the Tax Code of Ukraine № 2755-VI as of 02.12.2010 (further - TCU), according to which, in particular, temporarily from 01.04.2022 until termination or abolition of the martial law, state of emergency on the territory of Ukraine, provisions of Section XIV of the TCU are applied taking into account peculiarities provided for in Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU.

In addition, on 05.04.2022 the Law of Ukraine №2142-IХ as of 24.03.2022 "On amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding improvement of legislation for a period of the martial law" entered into force, which amended, in particular, Sub-section 8 Section XX "Transitional Provisions" of the TCU.

Sub-paragraph 9.8 Sub-section 8 Section XX "Transitional Provisions" of the TCU stipulates that for choosing or transiting to the simplified taxation system by payer with peculiarities established by Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU, the business entity submits application to the supervisory body. At the same time, income calculation for the previous calendar year is not attached to the application.

Business entity is considered a single tax payer of Group III with peculiarities established by Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU:

from 01.04.2022  in case of submitting application by April 1, 2022;

from the next working day after submitting such application in case of submitting application starting from April 1, 2022.

Business entities (newly created) registered according to procedure established by the Law, which within 10 days from the day of state registration submitted application for choosing the simplified taxation system taking into account taxation specifics established by Paragraph 9 Sub-section 8 Section XX "Transitional provisions" of the TCU, are considered as the single tax payers of Group III from the day of their state registration.

Application form for the simplified taxation system (hereinafter - Application) was approved by Order of the Ministry of Finance of Ukraine dated № 308 as of 16.07.2019.

Single tax 2 percent rate is indicated in the special field "Rate as an income percentage" of line 5.1.1 "Chosen single tax rate during transition to the simplified taxation system" of the Application.

Registration of business entity as the single tax payer at the 2 percent income rate is carried out by entering it in Register of single tax payers. On the official website of the State Tax Service at link https://cabinet.tax.gov.ua there is an opportunity to check whether business entity is the single tax payer with 2 percent income rate.