The Cabinet of Ministers of Ukraine has approved the draft Law “On Amendments to the Tax Code of Ukraine on Submission of Unified Reporting on the Single Contribution to the Compulsory State Social Insurance and Personal Income Tax”.
The project was developed by the Pension Fund of Ukraine at its own initiative.
As noted in the explanatory note to the bill, the combination of reporting on personal income tax (hereinafter – PIT), military levy and the single social contribution (hereinafter – SSC) with a quarterly reporting period contains a number of risks, and exactly:
- delay of receipt in the register of insured persons of the State Register of Compulsory State Social Insurance (hereinafter - RCCSSI) information on salaries of employees, payment of a single contribution, pension insurance record of insured persons and timely inclusion of these periods for calculating social insurance benefits in case of temporary disability, unemployment, an accident at work, as well as pensions (which affects, in particular, the definition of the right to a pension);
- loss of information about insured persons, taking into account the methods of their submission and the mechanism of influence on the correction of inaccurate (incomplete, erroneous, incorrect) data, including the submission of a report of the type “Adjusting” (such report data on clarifications, ie indicators can change for any period, many times);
- weakening of payment discipline for the payment of SSC due to the postponement of payment deadlines, which will affect the provision of financial resources for current pension benefits;
- delay in the implementation of enforcement measures to recover overdue debt, as the occurrence of such debt will be reflected in the liabilities contained in the quarterly report;
- determination of indicators of the average salary (income) in Ukraine, from which insurance premiums are paid and which is taken into account for pension calculation (will be carried out for a month on the basis of quarterly reports submitted by payers, ie with a shift of their calculations from one to three months);
- impossibility of timely monthly analysis of key indicators that affect the budget of the Pension Fund and monitoring of information on the RCCSSI to identify signs of use of undocumented workers and violations of labor legislation with the provision of information to the State Labor and loss of relevance.
Therefore, the Pension Fund proposes to amend the Tax Code in terms of changes for the consolidated report of the tax period from quarterly to monthly.
The government predicts that this will have both positive and negative effects on businesses. On the one hand, the need to submit interim reference reports is eliminated, on the other hand, the time spent on submitting monthly reports is increased.
If the Verkhovna Rada supports this bill, it will enter into force on January 1, 2022.
The State Tax Service of Ukraine in letter No. 21953/7/99-00-21-02-01-07 dated September 27, 2021 provided an official explanation of the updated form of income tax return and when it should be submitted for the first time.
STSU reminds that on August 17, 2021 Order of the Ministry of Finance “On approval of changes to the form of the Tax return on the corporate income tax” No. 317 of June 4, 2021, (further – Order No. 317) which approved changes to the form of the Tax return on corporate income tax (hereinafter – the Return), approved by Order of the Ministry of Finance No. 897 of October 20, 2015, came into force.
Taking into account the provisions of item 46.6 of the Tax Code, the tax authorities stressed that corporate income taxpayers must file a declaration in an updated form starting from January 1, 2022 for the reporting (tax) period of 2021.
The State Tax Service of Ukraine approved new handbooks of benefits as of October 1, 2021, namely:
- Handbook No. 105/1 of tax benefits that are losses of budget revenues;
- Handbook No. 105/2 of other tax benefits.
These Handbooks provide a list of benefits indicating their codes and terms of validity, in particular, corporate income tax; value added tax; from payment for land; from real estate tax; excise tax, local taxes and fees.
It will be recalled that the accounting of the amounts of tax benefits received by business entities is carried out by the supervisory authorities on the basis of information available in the tax returns submitted by such business entities.
The Ministry of Finance of Ukraine by Order No. 484 of August 27, 2021 updated the form and procedure for drawing up the Notice on Participation in International Group of Companies (hereinafter – Order No. 484).
During the development of these changes, the Ministry took into account the suggestions and comments on the simplification of filling out the Notice for taxpayers. The most important of these are the following.
1. Data on the amount of total consolidated income of an international group of companies (hereinafter – IGC) doesn’t need to be indicated in the updated form.
The requirement to provide information on the exchange rate used by the taxpayer when converting the reporting currency of the IGC, other than the euro, into euros is also excluded.
Instead, another approach has been introduced, which provides for informing the supervisory authorities about one of the three intervals on the amount of the total consolidated income of the IGC in column 11.1 of the form (one of the three codes is required – UNC 901, UNC 902 or UNC 903). These intervals, in fact, determine the scope of taxpayers' responsibilities for reporting on transfer pricing according to the ‘three-tier model’ (according to the requirements of step 13 of the BEPS Action Plan, which are implemented in Art. 39 of the Tax Code).
2. The order regulates the issue of filling in the columns of the Notification on participation in IGC in the case when the taxpayer is a member of the IGC, other than the parent company of the IGC, and is not authorized to submit the Report in accordance with the IGC countries. For this situation, the list of codes available for completion in column 10 is supplemented by a new code CBC709.
