Regarding exemption from payment of single tax for individuals-entrepreneurs, mobilized during the martial law

Press service of the State Tax Service of Ukraine, published 08 April 2024 at 11:01 Chapter: News

"What must be done by individuals-entrepreneurs – single tax payers (Group I or II), who aremobilized during the martial law in Ukraine and to whom in integrated payer’s card advance payments from the single tax are made and tax claims received for cancellation of such accrued single tax amounts by the controlling body?" 

Clauses 1 and 2 of Paragraph 25 Sub-section 10 Section XX "Transitional provisions" of the Tax Code of Ukraine (hereinafter – Code) stipulates that self-employed individuals (for individuals-entrepreneurs, individuals involved in independent professional activity), who had or did not have salaried employees, called up for military service during mobilization or involved in fulfillment of responsibilities for mobilization in positions provided for by the martial law, during special period defined by the Law of Ukraine № 3543- XI as of 21.10.1993 I "On mobilization training and mobilization", for the entire period of their military service, are exempted from obligation to accrue, pay and submit personal income tax reporting according to Section IV of the Code, and are also exempted from the obligation to accrue, pay and submit single tax reporting according to Chapter 1 Section XIV of the Code.

Basis for such exemption is application of self-employed individual and copy of military ticket or copy of another document issued by the relevant state body, indicating data on the conscription of such individual for military service during mobilization, for a special period, which are submitted to revenue and tax authority at the of tax registration place of self-employed individual within 10 days after demobilization. If demobilized self-employed individual is undergoing treatment (rehabilitation) in connection with performance of duties during mobilization, for a special period, application and a copy of military ticket or copy of another document issued by the relevant state body are submitted within 10 days after the end of treatment (rehabilitation).

Taking into account above specified, after demobilization of individual-entrepreneur, within 10 days, such individual-entrepreneur submits to the controlling body at the tax registration place application for exemption from obligation to pay single tax and copy of the military ticket or copy of another document issued by the relevant state body, indicating data on the conscription of such individual to military service at the mobilization time. If demobilized individual-entrepreneur is undergoing treatment (rehabilitation) in connection with performance of duties during mobilization, for a special period, application with copy of relevant document is submitted within 10 days after the end of treatment (rehabilitation).

In addition, it is reported that temporarily for a period until termination or cancellation of martial law on the territory of Ukraine, introduced by Decree of the President of Ukraine "On the introduction of martial law in Ukraine" №  64/2022as of 24.02.2022, approved by the Law of Ukraine № 2102-IX as of 24.02.2022 "On approval of the of the President of Ukraine "On the introduction of martial law in Ukraine", payment of taxes and levies is carried out taking into account peculiarities specified in Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Code.

Procedure for confirming possibility or impossibility of the taxpayer's fulfillment of obligations specified in Sub-paragraph 69.1 Paragraph 69 Sub-section 10 Section XX "Transitional provisions" of the Code (hereinafter – Order № 225) is approved by Order № 225 of the Ministry of Finance of Ukraine as of 29.07.2022.

Order № 225 defines the list of grounds for impossibility of compliance by taxpayer-individual, in particular one of which is conscription for military service during general mobilization, announced by Decree of the President of Ukraine № 65/2022 as of 24.02.2022 "On general mobilization", approved by the Law of Ukraine №2105-IX as of 03.03.2022 "On approval of Decree of the President of Ukraine "On general mobilization" or stay in territorial defense units (Sub-paragraph 4 Paragraph 2 Section II of Order № 225).

Clause 1 of Paragraph 3 Section II of Order № 225 stipulates that to taxpayers, including in relation to their branch, representative office, separate or other structural unit, who on the date of entry into force of Order № 225 have opportunity to submit application and documents (copies of documents), information about the inability to fulfill tax obligations, rules specified in this Paragraph are applied.

Paragraph 4 of the List of documents confirming impossibility of taxpayer- individual, in particular self-employed individual to fulfill tax obligation in a timely manner, including tax agent’s obligation, which was approved by Order of the Ministry of Finance of Ukraine №  225 as of 29.07.2022, determines that that documentary confirmation of grounds provided for in Sub-paragraph 4 Paragraph 2 Section II of Order № 225 is military ticket or other document issued by the relevant state body, indicating data on the conscription of such individual for military service during the mobilization for a special period.

In case that the taxpayer does not have opportunity to submit such application and relevant documents (copies of documents), information within time limits specified in Paragraph 3 Section II of Order № 225 (not later than September 30, 2022), the taxpayer submits application and relevant documents (copies of documents), information at the same time as acquiring opportunity to fulfill one of tax obligations (registration of tax invoice, submission of report, payment of outstanding tax liability, etc.) by such taxpayer, provided for by the Code or other legislation, control over implementation of which is entrusted to the controlling body, but not later than 60 calendar days from the first day of month following month of renewal of such taxpayer’s opportunities (Clause 2 Paragraph 4 Section II of Order № 225).

In case of the controlling body’s decision about impossibility of the taxpayer's timely fulfillment of tax obligation defined by Order № 225, liability provided for by the Code or other legislation, control of which is entrusted to the controlling bodies, for its non-fulfillment / late fulfillment does not apply to such taxpayer (Clause 2 Paragraph 2 Section III of Order № 225).

Clause 14 of Sub-paragraph 69.1 Paragraph 69 Sub-section 10 Section ХХ "Transitional Provisions" of the Code it is determined that taxpayers, including in relation to their branch or excise warehouse, representative office, separate or other structural subdivision, who have regained opportunity to fulfill their tax obligations, deadline for fulfillment of which falls on a period from February 24, 2022, until the date of renewal of the taxpayer's possibilities, are exempted from responsibility for untimely fulfillment of such obligations, provided for by the Code, provided that they fulfill their tax obligations regarding  payment of taxes and levies within 60 calendar days from the first day of month following month of renewal of such taxpayer’s  possibilities.