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As of January 1, 2013, many changes are not expected for single-tax payers. Therefore, if you were on the single tax in Q4 2012, the first quarter of 2013 should not bring you major changes …
What’s new for single-tax payers in 2013?
As of January 1, 2013, many changes are not expected for single-tax payers. Therefore, if you were on the single tax in Q4 2012, the first quarter of 2013 should not bring you major changes. For those encountering the simplified system for the first time, the table below shows the main criteria for remaining in the different groups of single-tax payers in 2013 (see table).
At the same time, one should remember other restrictions. Indeed, for certain types of activity taxpayers are completely prohibited from choosing the simplified system (the list of prohibited activities is set out in subparagraph 291.5.1 of the Tax Code of Ukraine). In addition, there are a number of restrictions for specific groups. Individual entrepreneurs of group 1 may engage only in market trading or provide household services to the population. Group 2 is allowed to provide services to individuals and to other simplified-system taxpayers — both individuals and legal entities. Individuals trading in jewelry may choose only the third or fifth groups at a tax rate of 5% or 10% respectively, i.e. without separate VAT payment.
Criteria for remaining in the different groups of the simplified system
Group | Individual/Legal entity | Max. no. | Max. annual turnover | Tax rate | RRO (cash register) | Reporting period |
1 | Individual | None | 0,15 | Fixed, 1 — 10% | No | Year |
2 | Individual | 10 | 1 | Fixed, 2 — 20% | No | Quarter |
3 | Individual | 20 | 3 | 3%** (if VAT is paid) | No | Quarter |
4 | Legal entity | 50 | 5 | 3% (if VAT is paid) | Yes | Quarter |
5 | Individual | 20 | 20 | 7% (if VAT is paid) | No | Quarter |
6 | Legal entity | 50 | 20 | 7% (if VAT is paid) | Yes | Quarter |
Minimum wage established by law as of January 1 of the tax (reporting) year.
** The tax rate expressed as a percentage is applied to income determined in accordance with paragraph 292.1 of the Tax Code of Ukraine.
What simplified-system taxpayers should pay attention to in 2013
As of January 1, 2013, subparagraph 2 of clause 8 and subparagraph 7 of clause 10 of the “Transitional Provisions” of the Tax Code of Ukraine cease to have effect, according to which in 2012 sub-subparagraph 2 of paragraph 293.4 and sub-subparagraph 7 of Part 298.2.3 of the Tax Code were not applied and no penalties were imposed for violations in 2012 of the procedures for calculation, correct completion of single tax declarations and full payment of the single tax.
The application of paragraph 2 of paragraph 293.4 threatens single-tax payers of groups 1 and 2 with having to pay a tax at a rate of 15% for activities not specified in the Certificate, and sub-subparagraph 7 of Part 298.2.3 will force entrepreneurs of groups 1–3 and 5 in this case to switch to the general taxation system. Care must also be taken when filling out income books and income-and-expense books, since paragraph 4 of Section II of the Law dated 24.05.2012 No. 4834-VI, which exempted “simplified” taxpayers from administrative fines provided for by Article 164-1 of the Code of Administrative Offenses for incorrect completion of books in 2012, ceases to be effective.