Changes in the application of RCO

The Verkhovna Rada of Ukraine adopted the Law of Ukraine as of 20.09.2019 № 128-IX “On amendments to the Law of Ukraine “On application of registrars of calculated operations in the sphere of trade, public catering and services” and other Laws of Ukraine on the un-shadowing of payments in the sphere of trade and services” (hereinafter – the Law № 128) and the Law of Ukraine № 129-IX “On amendments to the Tax Code of Ukraine on the un-shadowing of payments in the sphere of trade and services” (hereinafter – the Law № 129).

Specified Laws particularly introduce a number of innovations in the sphere of application of registrars of calculated operations (further RCO):

1. Business entities will be allowed to use the software RCO making cash payments with consumers, which allows using any device (smartphone, tablet, computer, etc.). Software RCO can fiscalize calculated operations on the STS’s server using special software.

It should be noted that in order to avoid losses, first of all, for small and micro businesses (small entrepreneurs), the relevant software will be provided by the State Tax Service for business entities free of charge.

2. It is envisaged to introduce a compensation mechanism of paid funds for the purchased goods (services) to the consumer, if such consumer was provided with a payment document, information on which is missing in the databases of the State Tax Service (hereinafter – the “Cashback” mechanism).

As follows, if consumer was provided with the RCO cash check but information about such check is not available on the STS’s server, the consumer has right to apply to the controlling body for violation of the order of cash payments by the business entity and, if confirmed, has the opportunity to receive a budgetary compensation of 100% of the cost of purchased goods, which was sold in violation of applicable law.

The “Cashback” mechanism is introduced primarily to combat the “non-fiscal” checks, when individual dishonest payers provide consumers with non-fiscal checks that look like fiscal ones.

3. It is envisaged to introduce a mandatory application of RCO by individuals-entrepreneurs – the single tax payers of Group II and III when making cash payments with consumers.

In addition, before that it is envisaged to introduce a mandatory use of RCO by for individuals-entrepreneurs (single tax payers of Group II and III) who carry out certain risky activities (sale of goods (services) via the Internet, trade of jewelry and household products from precious metals, precious stones; activities of travel agencies, tour operators, hotels, etc., the sale of textiles (except for sales for cash at the markets).

4. In case of non-application of the RCO or application in violation of established requirements, there is envisaged certain increase in the amount of penalties (financial) sanctions, as the current norms on the amount of penalties were adopted in 2000. Herewith, there are no additionally established fines towards already prescribed by the Law of Ukraine as of 06.07.1995 № 265/95-VR “On the use of registrars of calculated operations in the sphere of trade, catering and services” (hereinafter – the Law № 265).

5. Also, the Law № 128 envisages the obligation of business entities to conduct calculated operations through the RCO and software RCO using the mode of pre-programming the title and prices of goods (services) with the code of product’s subcategory according to Ukrainian classification of goods of the foreign economic activity  for excisable goods (previously only for fuel).

In the case of calculated operations through the RCO and / or software RCO without using the pre-programming mode, the title of each excisable product with the code of product’s subcategory according to UCG FEA, the price of goods and accounting of its quantity, in accordance with Paragraph 7 Article 17 of the Law № 265, financial sanctions in the amount of three hundred non-taxable minimum citizens’ incomes are applied to business entities that carry out calculated operations for goods (services).

At the same time, the Law of Ukraine as of 17.03.2020 № 533-IX “On Amendments to the Tax Code of Ukraine and other laws of Ukraine on support taxpayers for the duration of measures aimed to prevent the occurrence and spread of coronavirus disease (COVID-19)” (hereinafter – the Law № 533-IX) postponed terms of entry into force of the relevant provisions of the Law № 128 and the Law № 129.

So, according to Sub-paragraph 4 and 5 Section I of the Law № 533-IX the entry into force of the Law №128 and 129 is postponed:

from 19.04.2020 to 01.08.2020 – the possibility of application of the software registrars of calculated operations and increase in the amount of penalties (financial) sanctions;

from 01.10.2020 to 01.01.2021 – the introduction of “Cashback” mechanism and obligation to apply the RCO by individuals-entrepreneurs – the single tax payers of Group II and III that carry out risky activities;

from 01.01.2021 to 01.04.2021 – the obligation to apply the RCO by all individuals-entrepreneurs – the single tax payers of Group II and III.