Taxes

How individual entrepreneur can become a payer of the unified tax

The simplified tax system can be selected by any individual entrepreneur. But only if a number of requirements to be fulfilled. What is important for individual entrepreneurs to become the unified tax payer?

Groups 13

In order to become the unified tax payer for groups 1-3, individual entrepreneurs that meet the requirements for a particular group should submit the following to the tax authorities at the place of their registration no later than 15 calendar days before the start of the next calendar quarter (para. 298.1.1-298.1.4 of the Tax Code of Ukraine, hereinafter – TCU):

  • a statement on the application of the simplified taxation system;
  • calculation of income for the previous calendar year preceding the year of transition to the simplified taxation system.

That is, an individual entrepreneur can become a payer of the unified tax of groups 1–3 since the beginning of any quarter.

If an individual entrepreneur becomes a payer of the unified tax of the 3rd group and chooses the rate with the payment of the value added tax (hereinafter – VAT) (i.e. the rate is 3% of the income, and the rate without VAT – 5% of income), he/she must also register as a VAT payer. To do this, it is necessary to apply for registration as a VAT payer together with submission of documents for registration by the payer of the unified tax.

Individual entrepreneur that become payers of the unified tax of the 1st and 2nd groups should report once a year, that is, within 60 calendar days following the last calendar day of the reporting (tax) year (para. 296.2 of TCU). And the tax is paid by advance payment no later than the 20 day (inclusive) of the current month. It can be paid immediately before the end of the current accounting year. Payment should be made at the tax address.

The size of the tax for individual entrepreneur of group 1 cannot be more than 10% of the subsistence minimum for able-bodied persons, established by law on January 1 of the reporting year (in 2019 – not more than UAH 192.10 per month), and for individual entrepreneur of group 2 – 20% of the size of the minimum wage, established by law on January 1 of the reporting year (in 2019 – UAH 834 60 per month). The exact amount of the tax of individual entrepreneurs of groups 1 and 2 must be determined by their local government, which sets the tax rate for the relevant year, depending on the type of activity carried out by the payer.

Individual entrepreneurs – the unified tax payers of the 3rd group should report quarterly within 40 calendar days after the end of the reporting quarter (para. 294.1, 296.3 of TCU). The Unified tax should be paid (both at a VAT rate of 3% and at a rate excluding VAT – 5%) within 10 calendar days after the last day of submission of the declaration for the reporting quarter (para. 295.3 of TCU).

Group 4

Individual entrepreneurs, who are agrarians, comply with the above conditions and want to become a payer of the unified tax of the 4th group or to confirm their status of the payer for the relevant year must submit not later than February 20 of the current year to the relevant supervisory authority at the location of the taxpayer (para. 298.8.1 of TCU).

  • the general tax return for the current year tax on the total area of the land plots from which the tax is levied (agricultural land (arable land, grassland, pastures, perennial plantations) and/or lands of the water fund of internal reservoirs (lakes, ponds and reservoirs). Individual entrepreneur should calculate the tax on the basis of the normative monetary valuation of land owned or used by him/her in its activities, and the tax rates established for a specific category of land specified in para. 293.9 of TCU;
  • annex to such a declaration “Information (certificate) on the availability of land”. It should be listed in it all the lands that the payer uses in his/her activity. Their area cannot be less than 2 hectares and more than 20 hectares.

Individual entrepreneurs should pay the tax every quarter during the 30 calendar days following the last calendar day of the tax (reporting) quarter to the appropriate local budget account at the location of the land plot in the following proportion (paras. 295.9.2 and 295.9.8 of TCU): in I and II quarters – by 10% of the annual amount, in III quarter – 50%, and in IV quarter – 30%.

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