Can a self-employed individual exercise right to submit the one-time (special) voluntary declaration and declare funds received from economic activities that have not been declared in tax declaration and from which relevant taxes and levies have not been paid? Will these funds during the documentary audit be considered as those from which all taxes and levies have been paid?
Paragraph 1 Sub-section 94 Section XX of the Tax Code of Ukraine (hereinafter – Code) stipulates that the one-time (special) voluntary declaration is a special procedure for voluntary individual’s declaration of assets located on the territory of Ukraine and / or abroad, if such individual’s assets were received (acquired) at the expense of income that was subject to taxation in Ukraine at the time of their accrual (receipt) and from which taxes and levies were not paid or not in full amount according to requirements of tax legislation and / or international agreements, consent to the binding nature of which is provided by the Verkhovna Rada of Ukraine, and / or which were not declared in violation of tax and currency legislation, the control of which is entrusted to the supervisory authorities during any of the tax periods that took place before 01.01.2021.
Paragraph 3 Sub-section 94 Section XX “Transitional provisions” of the Code stipulates that the one-time (special) voluntary declaration can be used by resident individuals, including self-employed individuals, as well as individuals who are not residents of Ukraine, but who were residents at the time of receipt (acquisition) of declaration objects or at the time of accrual (receipt) of income, due to which declaration objects were received (acquired) and who are or were taxpayers according to the Code.
As follows, individuals, including self-employed can exercise right to submit the one-time (special) voluntary declaration.
In addition, Sub-paragraph “a” of Paragraph 4 Sub-section 94 Section XX of the Code and Sub-paragraphs 14.1.280, 14.1.281 Paragraph 14.1 Article 14 of the Code stipulate that objects of the one-time (special) voluntary declaration may be individual’s assets owned by the declarant (including joint partial or joint common ownership right) and are (registered, in circulation, registered, etc.) on the territory of Ukraine and / or abroad as of the date of submission of the one-time (special) voluntary declaration, including currency values (bank metals, except for those not placed on the accounts, national currency (UAH) and foreign currency, except for cash and monetary claims (including deposit), funds borrowed to third parties under the loan agreement), drawn up in writing form with a legal entity or notarized in the case of declarant’s claim right towards another individual.
Herewith, Sub-paragraph 7.1Paragraph 7 Sub-section 94 Section XX of the Code determines that for declaration objects specified in Sub-paragraph “a” 94 Section XX of the Code, the levy’s accrual basis for the one-time (special) voluntary declaration is monetary value of relevant declaration object or the nominal value of monetary claim, including loans granted to third parties. If such monetary value is determined in foreign currency, the value of such currency values is indicated in UAH at the official exchange rate of national currency to the relevant type of currency values determined by the National Bank of Ukraine as of the date of submission of one-time (special) voluntary declaration. If such monetary value is determined in the form of bank metals, the value of bank metals is indicated basing on the weight and accounting price of bank metals calculated by the National Bank of Ukraine as of the date of declarant’s submission of the one-time (special) voluntary declaration.
Declarant is obliged to document monetary value of such objects for the levy’s calculation and accrual for the one-time (special) voluntary declaration by attaching duly certified copies of documents confirming value of declaration objects to one-time (special) voluntary declaration.
If a self-employed individual owns funds received from economic activity, but such funds have not been declared in tax declaration, given that taxes established by tax legislation have not been paid, then such individual has right to declare these funds by submitting the one-time (special) voluntary declaration and pay levy for the one-time (special) voluntary declaration at rate specified in Paragraph 8 Sub-section 94 Section XX of the Code.
Second clause of Paragraph 13 Sub-section 94 Section XX of the Code stipulates that declarant’s payment of full amount of levy for the one-time (special) voluntary declaration, including addition accrual of monetary obligation in the cases provided for in this Section, exempts such declarant from liability for violation of tax and currency legislation, control of which is entrusted to supervisory authorities and from obligation to accrue and pay taxes and levies on income that became a source of receipt (acquisition) of assets specified by such declarant in the one-time (special) voluntary declaration (within the composition and value of assets specified in the one-time (special) voluntary declaration as object and basis for accrual of levy for the one-time (special) voluntary declaration), which took place in any of the tax periods before 01.01.2021.
Given above specified, please note that during the documentary audit, these funds will be considered those from which the personal income tax, single tax and military levy have been paid.