One of the conditions for the deprivation of the right to staying on a simplified tax system of an individual entrepreneur – the unified tax payer is the availability of his/her tax debt for each first day of the month in two consecutive quarters. As soon as the individual entrepreneur makes such a violation, he/she must move to the general system on the last day of the second of two successive quarters. How can an individual entrepreneur avoid this situation?
Compliance
An individual entrepreneur must ensure that he/she has no tax debt at the end of the month. It is possible to exercise this control, based on fiscal match data, or, for example, by obtaining information about payments in “Electronic cabinet of the payer”. Then the entrepreneur will not have to leave the simplified system through such a violation. If the taxpayer fails to fulfill the tax obligations to the full extent, he/she must ensure that the tax debt does not exceed the established requirements that would force him/her to leave the unified tax.
In order not to violate this requirement:
1) the entrepreneur should not have a tax debt for each first day of each month for two quarters. To fulfill this condition, the tax debt should be counted on the first number of any quarter and then at the beginning of each of the next six months from the first quarter of the quarter. If the debt arose in the middle of the quarter, then all the months of the quarter are not taken into account. The countdown will only begin when the debt is at the beginning of the first day of the first month of the next quarter and will exist for each first day of all months during two quarters;
2) it is about any tax debt, that is, as a debt from the unified tax or other tax or fee, except for the unified social contribution (SFSU dated November 13, 2017, No. 30848/7/99-99-13-01-02-17);
3) the size of the debt does not matter. That is, even if the debt is one penny, if it is reserved for the individual entrepreneur on each first day of each month during two quarters, it can be a reason for farewell to the unified tax. The point is that the main thing is the presence of the very fact of the debt, but not its size;
4) the debt can be from both the unified tax and from different taxes. Therefore, if the entrepreneur on the first day of the month has the unified tax debt for one month, and for the next – of the other, then each of these months can fall into the period of calculation of months in the presence of a debt, at the beginning of which the individual entrepreneur may leave the simplified system.
Transition to the general system
If the individual entrepreneur did not monitor and admitted the existence of a tax debt for each first day of all months during two quarters, then he/she will have to transit to the general system.
In order to leave the simplified system, the entrepreneur must file within 10 days before the end of the second of two quarters, during which there was a tax debt, a statement of refusal (para. 8 of sub-para.298.2.3 of the Tax Code of Ukraine (hereinafter – TCU).
From the beginning of the next quarter, an individual on the general system is obliged to use cash registers to make cash payments, must register as the value added tax payer (hereinafter – VAT) if he/she has reached the volume of transactions for the last 12 months in the amount, exceeding UAH 1 million. The founder of the individual entrepreneur will pay the land tax, and from the profits will have to pay the income tax and the war tax.
When the unified tax payer will calculate the debt of the unified tax, then, in addition to these consequences, he/she will have to pay a fine of 50% of the unified tax rate for the group to which he/she belongs (Art. 122 of TCU).
Violator – individual entrepreneur of group 4
Individual entrepreneur agrarians may also be taxpayers of the unified tax of the group 4. If they failed to comply at least once with one of the requirements that would give them the right to be the unified tax payer, for example, hired an employee, carried out activities other than agricultural, began to use more than 20 hectares of land, they would already work for the group 4 of the unified tax is forbidden.
They can:
- go to the group 3 of the unified tax;
- or refuse the simplified system and transit to the general system.
An application for the transition to the group 3 or a waiving of the unified tax must be submitted by the individual entrepreneur agrarian no later than the 20th day of the month following the calendar quarter in which the violation was committed (para. 298.8.6 of TCU).
Whatever the system of taxation is chosen by the agrarian, he/she should remember that, when applying, he/she has:
- to pay in the current year a tax in the amount calculated on the basis of 25% annual tax amount for each quarter during which the payer was in the group 4 of the unified tax payers;
- to submit a clarifying declaration to the submitted yearly declaration on the unified tax of the group 4 and to adjust the data therein in such a way that during the periods (quarters) of staying on the unified tax, a tax in the amount of 25% of the annual tax amount appeared, and for the periods that he/she no longer a payer of the unified tax of the group 4, it was zero value.
Having transited to the group 3 of the unified tax, individual entrepreneur agrarian starts everything fresh and has to comply with the requirements established for such a system of taxation. In the case of transition to the general system, he/she loses the exemption from cash registers, and in case of exceeding the income for the last year more than UAH 1 million – the obligation to register as the VAT payer.
