Legal advice on changes to the TCU made by the Law № 466-IX (Bill № 1210)

Law №466-ХІ “On Amendments to the Tax Code of Ukraine on Improving Tax Administration, Elimination of Technical and Logical Inconsistencies in Tax Legislation” of January 16, 2020, signed by the President of Ukraine on May 22, 2020 and entered into force on May 23, 2020 (hereinafter – the Law), the Tax Code of Ukraine (hereinafter – the TCU).

What has changed for sole proprietors in the general taxation system: ⠀

• The list of expenses for individuals – entrepreneurs in terms of costs for the payment of real estate tax, other than land, for non-residential real estate, the cost of reconstruction, modernization and other improvements to fixed assets (paragraph 177.4 TCU) . With the exception of the tax on residential real estate, such tax is not included in the costs of private individuals.
• Depreciation is subject to the costs of reconstruction, modernization and other types of improvement of fixed assets (except for current repairs), as well as trucks of individuals – entrepreneurs in the general taxation system in accordance with paragraphs. 177.4.6 TCU. ⠀
• For individuals – entrepreneurs who are registered during the year, or switch to a simplified system of taxation, or switched from a simplified system of taxation, must file a tax return for the reporting year (previously – for the reporting quarter), in which such activity or there was a transition to (transition from) a simplified system, or a transition from a simplified system of taxation in accordance with paragraph 177.5.2 of the TCU. ⠀
• Individuals – entrepreneurs who make in favor of a non-resident – a legal entity or a person authorized by him (except for a permanent establishment in Ukraine) any payments from income originating in Ukraine, must accrue and pay corporate income taxes from incomes (profits) of non-residents in the order, size and terms established by item 177.13 of III TCU. The same requirement for the calculation of income tax on non-resident income is provided for persons engaged in independent professional activity in accordance with the new paragraph 178.8 of the TCU.
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• The account of physical persons of businessmen with a sign of carrying out “independent professional activity” is provided. This is the case if the individual is registered as an entrepreneur, and such a person carries out independent professional activity in accordance with paragraph 65.9 of the TCU.