Submission of the single tax declaration with the “Clarifying” type and available Annex 1 by an individual – entrepreneur for the periods up to 2021

Relations in the state policy sphere on administration of the single contribution to obligatory state social insurance (hereinafter – the single contribution) are regulated exclusively by the Law of Ukraine as of 08.07.2010 2010 2464-VI “On collection and accounting of the single contribution to obligatory state social insurance” (hereinafter – the Law № 2464).

Paragraph 4 of the Part 1 Article 4 of the Law № 2464 defines that individuals – entrepreneurs are payers of the single contribution, including those who chose the simplified taxation system.

For payers referred to in Paragraph 4 of the Part 1 Article 4 of Law № 2464, who chose the simplified taxation system, an accrual basis of the single contribution are amounts determined by such payers independently, but not more than the maximum amount of accrual base established by this Law. Herewith, amount of the single contribution may not be less than amount of the minimum insurance contribution (Paragraph 3 of the Part 1 Article 7 of Law № 2464).

At the same time, the Law of Ukraine as of 19.09.2019 № 115-IX “On amendments to the Law of Ukraine “On collection and accounting of the single contribution to obligatory state social insurance” on submission of the Unified reporting on the single contribution to obligatory state social insurance and personal income tax”(hereinafter – the Law № 115) and the Law of Ukraine № 116-IX “On amendments to the Tax code of Ukraine regarding submission of the Unified reporting on the single contribution to obligatory state social insurance and personal income tax” (hereinafter – the Law № 116) changed the procedure for submitting reporting on the accrual of single contribution.

Paragraph 1 and 4 Part 2 Article 6 of the Law № 2464 determines that reporting information on the accrual of single contribution must be an integral part of the relevant tax reporting from 01.01.2021. Reporting form on the accrual of single contribution as a reporting part on the personal income tax (single tax) is established by the central executive body that ensures formation and implementation of public financial policy, in agreement with the Pension Fund of Ukraine and mandatory state social insurance funds.

Amendments were made to the Order of the Ministry of Finance of Ukraine as of 19.06.2015 № 578 “On approval of forms of the single tax payer’s declaration” which came into force on 01.01.2021 according to requirements of the Law of Ukraine № 115 and № 116, particularly by Order of the Ministry of Finance of Ukraine as of 09.12.2020 № 752 “On amendments to the Order of the Ministry of Finance of Ukraine as of 19.06.2015 № 578”, registered in the Ministry of Justice of Ukraine on 28.12.2020 № 1303/35586 (hereinafter – Order № 752).

In order to avoid legal conflict over the existence of several forms of reporting to reflect the amounts of accrued single contribution, the reporting forms according to the Procedure for forming and submitting reporting on the amounts of accrued single contribution to obligatory state social insurance (hereinafter – the Procedure), approved by the Order of the Ministry of Finance of Ukraine as of 14.04.2015 № 435 (hereinafter – Order № 435), were canceled by the Order of the Ministry of Finance of Ukraine as of 28.12.2020 № 814 “On some features of reporting on the single contribution to obligatory state social insurance according to the Order of the Ministry of Finance of Ukraine as of 14.04.2015 № 435” (hereinafter – Order № 814).

Herewith, Order № 814 stipulates that reporting on the amounts of accrued single contribution according to forms established by Order № 435 is submitted to tax authorities at the main registration place of a payer of the single contribution to the tax authorities, in particular, according to Annex 5 to the Procedure for payers of the single contribution specified in Paragraph 4 of the Part 1 Article 4 of the Law, who chose the simplified taxation system and belong to the I – III groups of single tax payers until 01.04.2021.

As follows, reporting on the amounts of accrued income of insured persons and amount of accrued single contribution (hereinafter – the Reporting) in the form according to Annex 5 to the Procedure, for this category of single contribution payers, in the period before 01.04.2021 was settled by Order № 435 taking into account peculiarities established by Order № 814.

According to Paragraph 16 Section II of the Procedure, an insurer is responsible for correctness and accuracy of filling in the Reporting.

Paragraph 1 Section V of the Procedure determines that in case of detection of an error in the Reporting before the deadline for its submission of, an insurer re-forms and submits the Reporting in full to the revenues and levies body at the main registration place.

The last electronic or paper Reporting submitted by an insurer before the expiration of reporting deadlines specified in this Procedure, which has passed all controls upon upload to the Register of Insurers and the Register of Insured Persons, will be considered as valid.

At the same time, according to the Decisions of the Constitutional Court of Ukraine as of 13.05.1997 №1-rp / 1999 on the universally recognized principle of law, the laws and other normative legal acts have no retroactive effect. This principle is enshrined in the Part 1 Article 58 of the Constitution of Ukraine, according to which the effect of a normative legal act in time should be understood so that it begins with the entry into force of this act and ends with expiration of the regulatory legal act during which they occurred or took place.

So, the use of forms of the single tax payer’s declarations established by Order of the Ministry of Finance of Ukraine as of 19.06.2015 № 578 as amended by Order № 752 to adjust the payer’s independently determined amounts of accrued single contribution as a Reporting part according to Annex 5 to the Procedure for periods of its validity, contradicts the principle of normative legal acts at the time fixed by Part 1 Article 58 of the Constitution of Ukraine.

Given the above mentioned, payers from 01.04.2021 are able to make adjustments to the updated reporting form, which contains information on the amounts of accrued single contribution for reporting periods starting in 2021.