The Law of Ukraine “On Amendments to section VIІI “Final and Transitional Provisions” of the Law of Ukraine “On the collection and accounting of the Unified Social Contribution for obligatory state social insurance” of 02.03.2015, № 219-VIII came into force on March 13. The section VIІI “Final and Transitional Provisions” of the Law of Ukraine “On the collection and accounting of the Unified Single Contribution for obligatory state social insurance” of 08.07.2010, № 2464-VI (hereinafter - the Law on USC) was amended by a new para 95of this Law.Conditions for application of the decreasing coefficienton the USC ratehave been cardinally changed since the specified date.
It should be recalled that from 1 January to 12 March 2015 the conditions for application of the decreasing coefficient were determined by para.3 of Sec. II of the Law of Ukraine dated 28.12.2014, № 77-VIII, which lost its effect 13.03.2015.
Key aspects
The decreasing coefficient is used when the accounting of wages, maternity leave, sick leave and rewards under contracts of civil legal nature.
Companies created in 2014 (self-employed and individuals) are also able to use the decreasing coefficient.
The decreasing coefficient would be applied to part-time employee wages.
It is impossible to use the decreasing coefficient when determining the amount of accrued USC while the advanced payment due to the impossibility to determine now whether all necessary conditions have been observed for its application.
Data to define indicators in 2014 are taken from statements on USC for corresponding months in 2014.
The decreasing coefficient is not applicable when calculating of:
- cash security by military units;
- wages, sick leave, maternity leave to disabled employees (8.41%);
- wages, sick leave, maternity leave of employees of enterprises and public organizations of disabled people, for which the USC accruing rates are established (5.5%, 5.3%).
The single contribution payer, who applied the decreasing coefficient and didn’t pay the accrued USC within the time allowed by the law on USC, loses the right to apply the coefficient in the future until full payment of such arrears (debts). The right to apply the decreasing coefficient is renewed from the month when such arrear (debt) to be paid.
Compulsory conditions for the decreasing coefficient application
From 13 March to 31 December 2015 the decreasing coefficient is applicable when wages (income) calculating to individuals and / or accruing of reward under civil contracts, payment of temporary disability benefits and benefits on maternity, if the payer meets together the following conditions:
1) the accruing base of the single contribution per insured person in the reporting month increased by 20% or more compared to the average monthly base of USC accruing of a payer for 2014 per insured person;
2) after application of the coefficient the average payment per insured person in the reporting month would be not less than the average monthly payment per insured person of a payer for 2014;
3) the number of insured persons in the reporting month, for whom the payment is accrued, does not exceed 200% of the average number of insured persons of a payer for 2014 (not applies to individuals - entrepreneurs, self-employed individuals, and individuals that use the labor of hired people under the terms of labor contract).
At first, the average number of insured persons of a payer for 2014 should be found. Then, the accruing base of the USC per insured person (hereinafter - IP) is to be determined and also the average payment per IP for 2014. Also, it is to be determined the required indicators concerning the payments for the period when the decreasing coefficient should be applied.
The coefficient is calculated independently on a monthly basis by taxpayers according to the formula provided for in para.95 of Section VIІI “Final Provisions” of the Law on USC.
If in the result of coefficient calculation its value to be less than 0.4, the payer should apply the coefficient of 0.4.
From 1 January 2016 the single contribution rates established by the fifth chapter and the second paragraph of the sixth chapter of Article 8 of the Law on USC for the unified contribution payers, determined in paragraphs 2, 3, 4 and 7 of sec.1 of ch.1of the Art.4 of the Law on USC, should be applied with coefficient 0.6 when wages (income) calculating to individuals and / or accruing of reward under civil contracts.
