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In the interpretation of the Tax Code of Ukraine, repayable financial assistance refers to funds that were received …
Nuances in handling repayable financial assistance for single taxpayers
(compensation or other fee) for their use, and they are also mandatory to be returned. Funds can be considered “repayable financial assistance” only if the following conditions are met:
- the use of the received funds does not involve any payments;
- the return of the received funds must be made within the established deadlines.
Receipt of repayable assistance by an entrepreneur – a single taxpayer
According to subparagraph 3 of paragraph 292.11 of Art. 292 of the Tax Code of Ukraine, the State Tax Service (DPS) may conclude not to include repayable financial assistance in income if it was returned within 12 calendar months. Since the amount of repayable financial assistance is not income, the “single taxpayer” should not include it in the Record Book and in the declaration.
In a situation where the repayable financial assistance was not returned within 12 calendar months (or only part of it was returned) – the amount (or the remaining part) must be reflected in the Record Book and the declaration for the period from which the 12 months since receipt of the funds have elapsed.
Provision of repayable assistance by an entrepreneur – a single taxpayer
The amount may be considered repayable financial assistance if:
- It is a financial service according to subparagraph 6.1, paragraph 1, Art. 4 of the Law of Ukraine No. 2664 dated 12.07.2001 “On Financial Services and State Regulation of Financial Services Markets” and is a loan;
- It corresponds to a loan agreement according to the norms of the Civil Code of Ukraine (CCU), the essence of the terms of which do not differ from Arts. 1046 – 1053 of the CCU. An interest-free loan agreement can be considered one concluded between individuals, provided that at least one of the parties is not engaged in entrepreneurial activity (paragraph 2 of Art. 1048 of the CCU), and the loan amount must not exceed 50 non-taxable minimum incomes of a citizen (850 ).
The State Tax Service (DPS) reminds that only financial institutions may lend funds at interest, and it is impossible to carry out activities in the field of financial intermediation while being a single taxpayer. Recall that intermediation includes activities such as expert and informational services, consulting, work on concluding, preparing, supporting and executing agreements for the provision of financial services, and other services defined by laws regulating the financial services market.