The Verkhovna Rada of Ukraine adopted the Law “On collection and accounting of the single contribution to compulsory state social insurance” (on the elimination of discrimination among payers) (the draft Law № 2166). Currently, the Law has been submitted to the President of Ukraine for a signature.
The Law improves the norms of current legislation on accrual and payment of the single social contribution to compulsory state social insurance (hereinafter – the SSC).
Specifically, the Law envisages:
1) Exemption from the payment of SSC for self-employed individuals, if they receive an old-age pension or are individuals with disabilities.
In addition, individuals – entrepreneurs, individuals pursuing independent professional activity and farm members will be exempted from paying the SSC for themselves if they receive pension for years of service.
Such individuals will be able to become the SSC payers only if they voluntarily participate in the system of compulsory state social insurance;
2) Individuals pursuing independent professional activity will be exempted from paying the SSC for themselves under condition that they are registered as individuals – entrepreneurs and carry out one type of activity at the same time as individuals – entrepreneurs and individuals pursuing independent professional activity.
3) Individuals – entrepreneurs and individuals pursuing independent professional activity who have the main place of work will be exempted from paying the SSC for months of the reporting period for which the employer paid an insurance premium for such individuals in the amount of not less than the minimum insurance premium (1039.06 UAH in 2020). Such individuals will be able to pay the single social contribution under the condition that they independently determine the accrual base for months of the reporting period for which the employer paid an insurance premium for such individuals in the amount less than the minimum insurance premium but not more than the maximum single social contribution base determined by the Law “On collection and accounting of the single contribution to compulsory state social insurance” (70.845.00 UAH in 2020). Herewith, the amount of single social contribution cannot be less than the amount of the minimum insurance premium.
Reference: according to the Law “On collection and accounting of the single contribution to compulsory state social insurance”, the main place of work is the place of work where the employee works on the basis of concluded employment contract, where his / her employment record book is located (registered), to which the relevant record of work is made.
At the same time, the tax authorities in order to accrue, calculate, complete and check of timely payment of the SSC were provided with access to personalized information on wages (income, cash benefits, help, compensation) of insured individuals, on which accrued and from which insurance premiums are paid, in the manner approved by the central executive body that ensures the formation and implementation of public financial policy, in coordination with the Pension fund and the funds of compulsory state social insurance.
4) Abolition of the obligation for individuals – entrepreneurs (except those who have chosen the simplified taxation system, accounting and reporting), individuals pursuing independent professional activity and farm members to pay the SSC in amount of the minimum insurance premium if such payers did not receive income (profit) in the reporting quarter or month.
Such payers will have the right for independent determination of the SSC’s accrual base for but not more than the maximum amount of the SSC’s accrual base determined by the Law “On collection and accounting of the single contribution to compulsory state social insurance”. In this case, amount of the SSC may not be less than amount of the minimum insurance premium.
5) Payers of the SSC (namely, individuals – entrepreneurs) if they are not employers, will be exempted from the SSC payer’s obligations, defined by the Law “On collection and accounting of the single contribution to compulsory state social insurance” for the entire period of their illegal imprisonment in the areas of anti-terrorist operation and / or joint forces operation, national security measures and defense, repulse and deterrence of armed aggression from the Russian Federation in Donetsk and Luhansk regions at the request of a family member or the SSC payer, after his / her release and / or after the end of his / her treatment (rehabilitation) which is confirmed by the data of the state body of special purpose with law enforcement functions, which ensures the state security of Ukraine, on the illegal imprisonment of such payer.
6) Accrued, unpaid and / or uncollected amounts of arrears are subject to write-off, as well as fines and penalties accrued to individuals – entrepreneurs (except for individuals – entrepreneurs who chose the simplified taxation system) and individuals pursuing independent professional activity and those who before the date of entry into force of this Law did not receive income (profit) from their activities which is subject to personal income tax, and within 90 calendar days from the date of entry into force of this Law submitted application for state registration of termination of business to the state registrar or submitted application for deregistration to the tax authority.
The write-off procedure requires confirmation of termination of business activity by such individuals or its deregistration, submission by the payer of application for writing off the debt (arrears) from the single social contribution and reporting in the manner and form prescribed by the Ministry of Finance (if not previously submitted), inspection conducted by the tax authority and decision-making on writing off the debt (arrears) from the single social contribution or refusal to write it off.
Specified norms come into force on the 1st of January 2021.
The draft Law can be found at: http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=66921