Article 1 of the Law of Ukraine № 959-XII as of 16.04.1991 "On foreign economic activity" (hereinafter - Law № 959) stipulates that foreign economic activity is, in particular, activity of business entities of Ukraine and foreign economic entities, built on mutual relations between them, which takes place both on the territory of Ukraine and outside its borders.
Individuals who have a permanent place of residence on the territory of Ukraine have a right to carry out foreign economic activity, if they are registered as entrepreneurs according to the Law of Ukraine № 698-XII as of 07.02.1991 "On entrepreneurship" (Part 2 Article 5 of Law № 959).
Relations arising in the currency operations sphere, currency regulation and currency supervision are regulated by the Constitution of Ukraine, Law of Ukraine № 2473-VIII as of 21.06.2018 "On currency and currency operations" (hereinafter - Law № 2473), other laws of Ukraine, as well as by regulations of the National Bank of Ukraine (hereinafter - NBU), adopted according to Law № 2473.
Principles of currency regulation, which are set forth in Article 2 of Law № 2473, provide, in particular, right of individuals and legal entities - residents to enter into agreements with residents and (or) non-residents and fulfill obligations related to these agreements in national or in foreign currency, including opening accounts in financial institutions of other countries.
Part 3 Article 4 of Law № 2473 provides that residents have a right to open accounts in foreign financial institutions and carry out currency transactions through such accounts, subject to restrictions set by the Law № 2473 and other laws of Ukraine.
Procedure for carrying out calculations for currency transactions is determined by the NBU (Part 4 Article 5 of Law № 2473).
Resolution № 5 of the Board of the National Bank of Ukraine as of 02.01.2019 approved Regulation on protection measures and determining procedure for carrying out certain transactions in foreign currency, which defines protection measures introduced by the NBU, procedure for their application (procedure for carrying out currency transactions under conditions of protection measures introduced by this Regulation), as well as procedure for carrying out separate operations in foreign currency (further - Regulation № 5).
Paragraph 16 Section I of Regulation № 5 stipulates that settlements for foreign economic operations are carried out exclusively through the bank accounts.
Paragraph 23 of Regulation № 5 stipulates that funds from non-resident for operations of resident for export of goods are subject to crediting to the resident's bank account in Ukraine.
At the same time, term "goods" is used in sense defined by the Law of Ukraine № 959-XII as of 16.04.1991 "On foreign economic activity", according to Article 1 goods are any products, services, works, intellectual property rights and other non-property rights intended for sale (paid transfer) (Paragraph 2 Section I of Regulation № 5).
Based on the above specified, current legislation does not prohibit individuals - residents from opening accounts in financial institutions of other countries.
At the same time, funds from operations of business entities - residents, in particular, from export of goods (services) are subject to being credited to the residents’ accounts in Ukrainian banks.
Currency supervision and application of influence measures for violation of requirements of currency legislation are carried out according to norms regulated by Articles 11 and 15 of the Law № 2473, respectively.
Procedure for applying the simplified taxation system, accounting and reporting is regulated by Chapter 1 Section XIV of the Tax Code of Ukraine (hereinafter - TCU).
Paragraph 292.1 Article 292 of the TCU stipulates that income for individual - entrepreneur is income received during the tax (reporting) period in monetary form (cash and/or non-cash); material or non-material form, defined in Paragraph 292.3 Article 292 of the TCU. Herewith, income does not include passive income received by such individual in the form of interest, dividends, royalties, insurance payments and compensation, income in the form of budget grants, as well as income received from the sale of movable and immovable property owned by individual and used in economic activity.
Income in foreign currency is recalculated in UAH at its official rate to foreign currency established by the National Bank of Ukraine on the date of receipt of such income (Paragraph 292.5 Article 292 of the TCU).
Date of receipt of income by the single tax payer is the date of receipt of funds by the single tax payer in monetary (cash or non-cash) form, date of signing by the single tax payer of an act of acceptance and transfer of goods (works, services) received free of charge.
As follows, for individual - entrepreneur all value indicators included in income are reflected in the national currency of Ukraine.
Indicators in foreign currency are converted into national currency at the official exchange rate of UAH to foreign currencies established by the NBU on the date of their receipt.
At the same time, please note that if funds received from the non-resident are credited to account opened in a foreign bank, and not to account for carrying out business activities in Ukrainian bank, then such funds are not included in income of individual – entrepreneur – single tax payer, but are taxed according to rules established for taxpayers - individuals.
Taxation procedure of individuals’ income is determined by Section IV of the TCU, according to Sub-paragraph 163.1.3 Paragraph 163.1 Article 163 of which the subject of resident taxation is foreign income - income received from sources outside Ukraine.
Taxation of foreign income is established by Paragraph 170.11 Article 170 of the TCU.
Also, the specified incomes are subject to taxation by the military levy (Sub-paragraph 1.2 Paragraph 161 Sub-section 10 Section XX "Transitional provisions" of the TCU).
Paragraph 164.4 Article 164 of the TCU stipulates that during accrual (receipt) of income received in the form of currency values or other assets (value of which is in foreign currency or international units of account), such income is converted into UAH at the exchange rate of the NBU in effect at the time of accrual (receipt) of such income.
Therefore, income received by the resident individual from sources outside Ukraine is included in the total annual taxable income as foreign income and is subject to personal income tax and military levy on a general basis, taking into account provisions of international treaties of Ukraine on the avoidance of double taxation.