Publication date: 30.04.2024
active and purposeful military lawyer with more than 4 years of experience
QUESTION
Is participation in a seminar (conference, training) of an employee subject to personal income tax, if the seminar (conference, training) is held according to the activity profile of a legal entity, including abroad?
ANSWER
Funds paid by the employer for the benefit of domestic higher and vocational educational institutions for the training of an individual, which in 2023 do not exceed UAH 20,100.00 for each month of training and the employer's expenses in connection with improving the qualifications (retraining) of the employee, are not included to the taxable income of such an individual (employee).
The total monthly (annual) taxable income does not include the amount of the employer's expenses in connection with improving the qualifications (retraining) of the taxpayer in accordance with the law.
In case of violation of the specified conditions and in the part exceeding the amount of UAH 20,100.00, the funds paid by the employer for the training of an individual are equated to an additional benefit and are taxed at the rate of 18%.
Regarding the employee's participation in seminars and conferences, if the invited party to the seminar (conference) and under the terms of the contract the recipient of information and consulting services is a legal entity (employer), whose interests are represented by the employee, then the amount paid by the legal entity (employer) for participation in a seminar (conference) is not the income of such an employee and subject to personal income tax.In accordance with Article 6 of the Law of Ukraine dated January 12, 2012 No. 4312-VI "On Professional Development of Employees", the organization of professional training of employees is carried out by employers taking into account the needs of their own economic or other activities in accordance with the requirements of the law.
Professional training of employees is carried out: directly at the employer, on a contractual basis in vocational and technical and higher educational institutions, at enterprises, in institutions or organizations. At the same time, employers can carry out formal and informal professional training of employees.
Formal professional training of workers in labor professions includes initial professional training, retraining and advanced training of workers, and retraining, internship, specialization and advanced training of employees who, according to the classification of professions, belong to the categories of managers, professionals and specialists. According to the results of such training, a document on education of the established model is issued.
Informal professional training of employees is the acquisition by employees of professional knowledge, abilities and skills, not regulated by the place of acquisition, term and form of training and is carried out with their consent directly at the employer at his expense, taking into account the needs of their own economic or other activities.
The procedure for taxation of the income of natural persons is regulated by Chapter IV of the Tax Code of Ukraine (hereinafter referred to as the Tax Code of Ukraine), subsection 165.1.21 of Clause 165.1 of Article 165 of which provides that the amount paid by any legal entity or natural person for the benefit of domestic higher and vocational educational institutions for obtaining an education, for training or retraining of the taxpayer, but not higher than three times the minimum wage established by law on January 1 of the reporting (tax) year (in 2023 - UAH 6,700.00 x 3) for each full or part-time month of training, training or retraining of such an individual.
The income received by the taxpayer as an additional benefit (except for the cases provided for in Article 165 of the Civil Code) is included in the total monthly (annual) taxable income of the taxpayer - sub-clause 164.2.17 of clause 164.2 of the article. 164 of the PKU.
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According to sub-clause 165.1.37 of clause 165.1 of article 165 of the Code of Civil\ Procedure, the total monthly (annual) taxable income does not include the sum of the employer's expenses in connection with upgrading the qualifications (retraining) of the taxpayer in accordance with the law.Therefore, the amount of funds paid by the employer to domestic higher and vocational educational institutions for the education of an individual, which in 2023 does not exceed UAH 20,100.00 for each month of education and the employer's expenses in connection with upgrading qualifications (retraining) employee, are not included in the taxable income of such an individual (employee).
In case of violation of the specified conditions and in the part of exceeding the amount determined by subparagraph 165.1.21 of clause 165.1 of article 165 of the Code of Civil Procedure, the funds paid by the employer for the training of an individual are equated to an additional benefit and are subject to tax on the income of individuals at the rate of 18%.
Regarding the employee's participation in seminars and conferences
According to the definition of the Ukrainian legal terminological dictionary, a seminar is a form of group work with the participation of invited guests, the purpose of which is the exchange of information on a certain topic. A conference is a large meeting lasting one or more days, devoted to one key issue or topic, divided into narrower issues. Participation in seminars (conferences) involves receiving information and consulting services on the basis of a contract concluded with the organizer of the seminar (conference).
At the same time, if under the terms of the contract the invited party and recipient of information and consulting services is an employee, then the amount paid by the legal entity (employer) for participation in the seminar (conferences) for such an employee should be considered as income received by such an employee in the form of an additional benefit, which is included in the total monthly (annual) taxable income and is taxed at the rate of 18%.
