Law of Ukraine “On Amendments to the Law of Ukraine “On Collection and Accounting of the Single Contribution for Compulsory State Social Insurance” on Elimination of Discrimination of Payers” No. 592-IX of May 13, 2020 (hereinafter – Law No. 592-IX) provides for the write-off of the amount of arrears for the unified social tax, as well as fines and penalties accrued on these amounts of arrears (hereinafter – the amount of arrears for the unified social tax) by sole proprietors based on the general taxation system and individuals engaged in independent professional activities if they do not receive income (profit) from their activities, which is subject to personal income tax. The procedure for writing off such debt is presented below.
Step 1
To write-off the arrears for unified social tax it is necessary to do the following within 90 calendar days from the entry into force of law No. 592-ІХ (from June 3, 2020 till August 31, 2020):
- for sole proprietors – to submit an application for state registration of termination of business activity to the state registrar at the location of registration file of sole proprietor and to tax authority – statements (for the period from January 1 2017 till the entry into force of Law No. 592-ІХ) in case it has not been submitted;
- for individuals who conduct independent professional activity – submit to the tax authority at the main place of registration, the application for deregistration of single tax payer and statements (for the period from January 1, 2017 till the entry into force of Law No. 592-ІХ) in case it has not been submitted.
Also for individuals who conduct independent professional activity it is necessary to register the termination of independent professional activity (or suspension or change of organizational form of the relevant activity from independent (individual) to another) and submit to the controlling authority an application for liquidation of the taxpayer (form 8-ОПП). The termination of independent professional activity is confirmed by the information (extract) from the relevant register, which includes information on the state registration of such activity.
Step 2
The following have the right to submit liquidation statements:
- within 30 calendar days from the date of state registration of termination of business activity (by sole proprietors);
- within 30 calendar days from the date of submission of the application to the body of the State Tax Service of Ukraine on deregistration of the payer of the unified social tax (by individuals who conduct independent professional activity).
Penalties provided by item 7, part 11 of Art. 25 of the Law of Ukraine “On the Collection and Accounting of the Unified Social Tax to the obligatory state social insurance”, under the above conditions do not apply to the payer of the unified social tax.
Step 3
After the taxpayer has performed these actions, the tax authority within 15 working days conducts desk audit, based on the results of which it decides to write off the amount of arrears, penalties and fines or makes a reasoned decision to refuse.
The tax authority may refuse to write off the amount of arrears, fines and penalties, provided that the results of the audit establishes that:
- the taxpayer received income (profit) during the period from January 1, 2017 till the entry into force of Law No. 592-IX;
- the amounts of arrears, as well as fines and penalties accrued on the amounts of arrears, were fully paid by the payer or collected.
If the amounts of arrears, fines and penalties accrued on the amount of arrears were paid by the payer and/or collected, the tax authority decides to write off the amount of arrears, fines and penalties in the part that remained unpaid.
The requirement to pay the amount of arrears, penalties and fines will be considered withdrawn on the day of the decision of the State Tax Service of Ukraine to write off.
Please note that the debt that arose from January 1, 2017 to June 3, 2020 is subject to write-off.
Note that the amounts of arrears, penalties and fines accrued and paid or collected for the specified period are not refundable.
