The State Tax Service of Ukraine has drawn the attention of business entities to the main violations identified during the monitoring and review activities during January-August 2020. Namely:
1) unreasonable formation of costs and tax credit as a result of fictitious business transactions, namely the impossibility of direct “counterparty” and the previous pseudo-supplier of real business activities and specific transactions in connection with:
- absence of ownership/use of any objects of taxation and non-acquisition of any services (rent, transport, utilities, etc.) that would allow to conduct business activities (according to the reporting form No. 20-ОПП and the Unified Register of Tax Invoices; hereinafter – URTI);
- absence of a small number of staff, which does not allow to conduct business activities, or artificial “filling” of the entity with a significant number of staff with a salary less than the minimum (according to reporting forms No. Д4, and No. 1ДФ);
- absence at the location from which the systematic conduct of economic activity should be carried out (according to the controlling bodies at the place of registration of “suppliers”);
- lack of real (legal) source of origin of goods (lack of its production or import) (according to financial statements, URTI, etc.);
- lack of data on storage and transportation of goods given its physical characteristics and volume (according to URTI);
- availability of information on the definition of “suppliers”: “fictitious business entities”; “participants of transit-conversion groups”, “entities created to provide tax benefits to other taxpayers”, etc. (according to the information provided in specific court decisions published in the Unified State Register of Court Decisions);
2) non-accrual of tax liabilities from value added tax (hereinafter – VAT) due to failure to determine the share of VAT on purchased goods/services and/or non-current assets between taxable and non-taxable transactions;
3) inclusion in the tax credit of the value of goods/services that are not used in business activities;
4) non-inclusion in the income from all types of activity of the amounts of accounts payable in respect of which the statute of limitations has expired;
5) non-confirmation of expenses and tax credit by tax and accounting documents;
6) violation of the terms of registration/absence of registration in the URTI of tax invoices drawn up during the determination of VAT liabilities.
In addition, entities that do not pay taxes on the funds received (mutual investment institutions managed by asset management companies (AMCs) were involved in financing; the use of housing (consumer) cooperatives (funds for construction come in the form of share contributions) overestimation of the cost of the object under construction, due to the use of building materials of unknown origin.
The State Tax Service of Ukraine in category 103.25 “ZIR” has answered the question “For which quarter tax agents when submitting a tax calculation under form No 1ДФ start applying new items of income in connection with the entry into force of order of the Ministry of Finance of Ukraine No. 241 of May 26, 2020?”.
Items of income, which are introduced by the order of the Ministry of Finance of Ukraine “On Approval of Amendments to the Annex to the Procedure for Filling and Submitting of the Tax Calculation if Income Accrued (Paid) in favor of Individuals and Tax Withheld by Tax Agents” No. 241 from May 26, 2020 to the Handbook of Items of Income, given in the annex to the Procedure, are applied by tax agents when submitting a tax calculation under form No 1ДФ from the third quarter of 2020.
Order No. 241 has amended the annex to the Procedure, namely: in Section 1 “Handbook of Perosnal Income” the current names of signs of income are brought in line with the norms of the Tax Code of Ukraine (hereinafter – the Tax Code).
The Handbook is supplemented by new items of income, by which generalized items are divided into more specific types of income, in particular, the types of income on the basis of item 106 are divided into:
- item 106 – “Granting a land plot (share) in leasing, rent or sublease”;
- item 195 – “Granting agricultural land, property share in leasing, sublease emphyteusis”;
- item 196 – “Granting property (except for land plot (share), agricultural land, property share) in leasing, rent or sublease”.
Also, in order to improve the analytical work on the administration of personal income tax, the regulatory authorities propose a generalized item 153 – “Principal amount of repayable financial assistance provided by the taxpayer to others, which is returned, the main amount of repayable financial assistance received by the taxpayer” is divided into item 153 – “Amount of repayable financial assistance provided by the taxpayer to other persons, which is returned” and item 197 – “Amount of repayable financial assistance received by the taxpayer”.
In addition, the new wording sets out item 128 – “Amount of state and social material assistance, state assistance (including cash benefits for persons with disabilities, children with disabilities in the implementation of individual rehabilitation programs for persons with disabilities, the amount of maternity benefits), rewards and insurance payments received by the taxpayer from the budgets and funds of compulsory state social insurance and in the form of financial assistance to persons with disabilities from the Fund for Social Protection of the Disabled (paragraph 165.1.1 of item 165.1 of Article 165 of Chapter IV of the Tax Code of Ukraine)”.
At the same time, the current Procedure for filling in and submitting tax calculations by tax agents under form No. 1 ДФ remains the same.
The State Tax Service of Ukraine through the Office of Large Taxpayers has reminded that if in future tax periods (taking into account the statute of limitations) the taxpayer independently detects errors contained in his previously submitted tax return, he must send a clarifying calculation to such tax return in the form valid at the time of submission of the clarifying calculation (Article 50.1 of the Tax Code).
The taxpayer has the right not to file such a calculation if the relevant adjusted figures are indicated in the tax return for any subsequent tax period during which such errors were independently (including the results of electronic verification) detected.
The object of income tax is income with a source of origin from Ukraine and abroad, which is determined by adjusting (increasing or decreasing) the pre-tax financial result (profit or loss), defined in the financial statements of the enterprise in accordance with national accounting regulations (standards) or international financial reporting standards, for differences that arise in accordance with the provisions of the Tax Code (paragraph 134.1.1 of the Tax Code).
Therefore, if the correction of errors affects the income and pre-tax financial result (profit or loss), determined in the financial statements of the enterprise in accordance with national accounting regulations (standards) or international financial reporting standards, and as a consequence the object of income tax, the taxpayer corrects the indicators of the income tax return by submitting clarifying calculation or as part of the income tax return for the relevant tax (reporting) period in the form valid on the day of the submission.
The Ministry of Development of Economy, Trade and Agriculture of Ukraine by the order “On Approval of Amendments to Certain Orders and Recognition as Invalid Order of the Ministry of Foreign Economic Relations and Trade of Ukraine No. 349 of June 24, 1996” No. 1130 of June 16, 2020 canceled the Customer feedback book.
From now on, Order of the Ministry of Foreign Economic Relations and Trade of Ukraine No. 349 of June 24, 1996, which approved the form of the Customer feedback book at retail and restaurant establishments, as well as instructions for its completion, has expired.
This order obliged all enterprises (units) of retail trade and restaurants, regardless of ownership, to keep such Book, so that customer had opportunity to write complaints, suggestions, feedback and comments.
To replace the Book, businesses must ensure that there is a visible and accessible place in the buyer's corner, which contains information about the name of the owner or authorized body, addresses and telephone numbers of consumer protection bodies.
At the same time, the Rules of commission trade in non-food products has excluded the requirement to indicate in the documents for goods subject to mandatory certification in the state certification system, registration numbers of certificates of conformity or certificates of recognition of conformity.
The rules on bans on the sale of alcoholic beverages and tobacco products have been removed from the Rules of Operation of the Retail Trade Network. Instead, it is prescribed that the sale of alcoholic beverages and tobacco products in the retail trade network is carried out in accordance with the requirements of the law.
It is clarified for small traders that measuring equipment must be in good condition, with a calibration mark and undergo periodic verification in the manner prescribed by law.
The business entity, which is in charge of the points of the retail trade network, is obliged to have for all goods sold in these points, the documents required by law.
At the decision of the business entity, the information on the goods may contain, along with the text in the state language, its translation into the language of national minorities and other languages.
The State Labor Service of Ukraine has informed how to properly issue leave without pay due to quarantine.
The Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Aimed at Preventing the Occurrence and Spread of Coronavirus Disease (COVID-19)” amended Art. 84 of the Labor Code of Ukraine (hereinafter – the Labor Code). Namely, Art. 26 of the Law of Ukraine “On Leave”, according to which in case of introduction of quarantine by the Cabinet of Ministers of Ukraine, the period of leave without pay during quarantine is not included in the general period established by Part 2 of this article (not more than 15 calendar days per year) .
As of today, leave without pay can last throughout the quarantine. Its term is not taken into account in the 15-day rate per year for such leave, which is provided for in Part 2 of Art. 84 of the Labor Code.
Such leave is granted to the employee on the basis of a written application stating: the reason for requesting leave without pay; date on which the leave begins; duration of leave.
The application should state “In connection with the introduction of quarantine”, as well as refer to the resolution of the Cabinet of Ministers of Ukraine, which imposes quarantine.
The head must issue an order (instruction) to grant leave without pay.
Such leave is not extended by the number of holidays and non-working days that fall on it.
Such leave without pay may be granted to employees only at the employee's request and not at the initiative of the employer. Compulsory sending of employees on leave at their own expense can be regarded as a gross violation of labor legislation, the responsibility for which is provided by Art. 172 of the Criminal Code of Ukraine
The employer has the right both to grant such leave and to refuse to grant it. And in case of refusal of the employer to transfer labor relations on “quarantine rails” it is possible to do it in other way: through establishment of remote work, idle time, etc.
