The Law of Ukraine № 540 which came into force on 02.04.2020 amended Paragraph 291.4 Article 291, Chapter 1 “Simplified taxation system, accounting and reporting” Section XIV “Special tax regimes” of the Code increased income limits which entitle business entities to apply the simplified taxation system, accounting and reporting.
As follows, starting from 02.04.2020, there are determined single tax payer income limits during the calendar year:
for Group I – 1 million UAH (until 02.04.2020 it was – 300 thousand UAH);
| Reference: individuals – entrepreneurs who do not use the work of hired individuals, exclusively carry out the retail sale of goods from trading places in the markets and / or carry out economic activity for providing household services to the population belong to Group I. |
for Group II – 5 million UAH (until 02.04.2020 it was – 1.5 million UAH);
| Reference: individuals – entrepreneurs who carry out the economic activity for providing services, including household to single tax payers and / or population, production and / or sale of goods, activity in the sphere of restaurant business, provided that during the calendar year they do not use the work of hired individuals or the number of individuals who are with them in employment, at the same time does not exceed 10 belong to Group II. |
for Group III – 7 million UAH (until 02.04.2020 it was – 5 million UAH);
| Reference: individuals – entrepreneurs who do not use the work of hired individuals or the number of individuals who are with them in employment is not limited and legal entities – business entities of any legal form belong to Group III. |
IMPORTANT
According to Paragraph 293.8 Article 293 of the Code, the single tax payers of Group I – III who during the calendar quarter exceeded the amount of income determined for such tax payers under the provisions of the Code, which were in effect until 02.04.2020 (Paragraph 291.4 Article 291 of the Code) from the next calendar quarter, by application, switch to the single tax rate determined for single tax payers of Group I – III respectively or switch to the general taxation system.
Such single tax payers are required to apply the single tax rate of 15 percent to the amount of excess. Herewith, application must be submitted not later than the 20th of month following the calendar quarter in which the excess of income is allowed.
PLEASE NOTE
Single tax payers at will have the right to change Group of the single tax payers (due to the increase of income limits) but only from the third quarter of 2020, complying with other requirements of Chapter 1“Simplified taxation system, accounting and reporting” Section XIV “Special tax regimes” of the Code (Sub-paragraph 298.1.5 Paragraph 298.1 Article 298 of the Code). Relevant application must be submitted in one of the ways specified in Sub-paragraph 298.1.1 Paragraph 298.1 Article 298 of the Code, not later than 15.06.2020. Herewith, single tax payer of Group III who is the value added tax payer shall cancel the registration of the value added tax payer in accordance with the procedure established by this Code, if he or she chose Group I or II.
