Amendments to the tax legislation that came into force on 01.01.2021

Amendments to the tax legislation that came into force on 01.01.2021 were made by:

1. The Law of Ukraine as of 19.09.2019 115-IX “On Amendments to the Law of Ukraine “On Collection and Accounting of Single Contribution to Compulsory State Social Insurance” regarding submission of unified reporting on the single contribution to compulsory state social insurance and personal income tax” and the Law of Ukraine as of 19.09.2019 № 116-ІХ “On Amendments to the Tax Code of Ukraine on Submission of Unified Reporting on the Single Contribution to Compulsory State Social Insurance and Personal Income Tax” in terms of changing requirements for reporting by payers of the single contribution to compulsory state social insurance (hereinafter – the single contribution) on the accrual of such contribution.

According to adopted amendments, submission of reports on the accrual of single contribution in the amounts determined in accordance with the Law of Ukraine as of 08.07.2010 № 2464-VI “On Collection and Accounting of the Single Contribution to Compulsory State Social Insurance” is envisaged in the personal income tax reporting (single tax) to the supervisory body at the main registration of the single contribution payer in time and procedure established by the Code.

2. The Law of Ukraine as of 20.09.2019 128-ІХ “On Amendments to the Law of Ukraine “On the Use of Registrars of Calculated Operations in Trade, Catering and Services” and other Laws of Ukraine on the Un-shadowing Settlements in Trade and Services”, particularly in terms of setting the deadline for payment of fines (financial) sanctions for violation of the Law of Ukraine as of 06.07.1995 № 265/95-VR “On the Use of Registrars of Calculated Operations in Trade, Catering and Services”.

3. The Law of Ukraine as of 20.09.2019 129-ІХ “On Amendments to the Tax code of Ukraine Regarding the Un-shadowing Settlements in Trade and Services”, particularly in part:

establishing that for information and analytical support of the supervisory body is used information published according to the law and / or voluntarily or by request provided to the supervisory body in manner prescribed by the law, as well as information provided in the buyer’s (consumer’s) complaint regarding the taxpayer’s violation of established procedure for conducting settlement operations with the use of registrars of calculated operations and / or software registrars of calculated operations;

supplementing the list of data on the basis of which internal audit is carried out.

4. The Law of Ukraine as of 04.10.2019 190-ІХ “On Amendments to the Tax Code of Ukraine on the Introduction of Single Account for Payment of Taxes, Fees and Single Contribution to Compulsory State Social Insurance”, particularly in the use of single account that can be used by the taxpayer to pay monetary obligations and / or tax debt from taxes and fees provided by the Code, as well as single contribution and other payments, control of which is entrusted to the supervisory bodies.

5. The Law of Ukraine as of 16.01.2020 № 466-ІХ “On Amendments to the Tax Code of Ukraine to Improve Tax Administration, Eliminate Technical and Logical Inconsistencies in Tax Legislation” (hereinafter – the Law № 466), particularly in part:

granting right to the taxpayer to provide on its own initiative written explanations and / or documents regarding the circumstances that confirm absence of his / her guilt in the committed tax violation;

conduction of audits (improvement of procedure for registration of tax notifications – decisions by the STS; supplementation of list of grounds for unscheduled and actual documentary audits; introduction of new procedure for denying the act’s consideration results and audit materials, etc.);

introduction of new concept of taxpayers’ liability, as well as new conditions for accrual of fines;

addition to the list of taxpayers for whom an annual tax (reporting) period is established;

supplementation of differences arising from financial operations (clarification of procedure for interest accounting paid on loans, borrowings and other debt obligations (fine capitalization), introduction of new differences that reduce the pre-tax financial result, as well as differences that increase financial result before taxation);

determination of procedure for taxation of liquids used in electronic cigarettes and introduction of labeling of containers (packaging) with liquids used in electronic cigarettes and excise tax marks;

supplementing the list of excisable products with tobacco-containing product for electric heating (TVEN) by heater with electronic control;

establishing obligation for single tax payers to accrue and pay income tax on the payment of income (profits) to a non-resident with the source of their origin from Ukraine;

 setting a temporary rate, for the period from 01.01.2021 to 31.12.2024 inclusively, for tobacco products, tobacco and industrial tobacco substitutes.

6. The Law of Ukraine as of 14.07.2020 № 786-ІХ  “On Amendments to the Tax Code of Ukraine on Functioning of the Electronic Cabinet and Simplification of Work for Individuals – Entrepreneurs” (hereinafter – the Law № 786), particularly in part:

determining a non-residents’ obligation to register at the supervisory body at the location of their permanent establishment, in case of starting an entrepreneurial activity through the representative establishment;

determining that advance payments are not collected / accrued on the amounts of operations equated to dividends for tax purposes;

simplification of accounting form for individuals – entrepreneurs’ income and expenses and individuals involved in independent professional activity.

7. The Law of Ukraine as of 17.12.2020 № 1117-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Ensuring Collection of Data and Information Necessary for Declaring Certain Objects of Taxation” (hereinafter – the Law № 1117), particularly in part:

coordination of norms for registration of non-residents who acquire from another non-resident who does not have a permanent establishment in Ukraine, investment assets of a legal entity – resident of Ukraine, as well as deadlines for submission of documents for registration of such non-residents;

conduction of audits (restrictions on stopping documentary scheduled and unscheduled audits; reduced statute of limitations for audits of tax agent’s tax liabilities that are accrued (paid, provided) to an individual in connection with the employment relationship, etc.); 

restrictions on the recognition of interest as “thin capitalization” are applicable only to operations with non-residents;

expansion of list of conditions for exemption from the personal income tax on income received in 2020 – 2021 due to the liquidation of a foreign law firm or foreign entity without the status of legal entity;

increasing the threshold of the total real estate area that can be leased by individuals – entrepreneurs of Group I – III;

exemption from individual’s liability for late payment of property tax liabilities if the controlling body did not sent tax notification – decision to individual within the time limits established by the Code;

establishing ability for holders of electronic payment means to receive cash at the place of payment for products, works and services.

More details about innovations introduced by the Law № 466 and № 786 that came into force on 01.01.2021 are in the Newsletters № 12, 13, 15 and 16, posted at https://tax.gov.ua/podatki-ta- words / informatsiyni-listi.