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Publication date: 13.05.2024
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The procedure for the employer to calculate the amounts of accrued income and withheld personal income tax
According to sub-clause 169.4.2 of clause 169.4 of article 169 of the Tax Code of Ukraine (hereinafter referred to as the Tax Code of Ukraine), the employer of an individual income tax payer is obliged to carry out, including at the place of application of the tax social benefit, a recalculation of the amount of income accrued to such a tax payer in in the form of wages, as well as the amount of the provided tax social benefit:
• based on the results of each reporting tax year during the calculation of wages for the last month of the reporting year;
• during the calculation for the last month of the application of the tax social benefit in the event of a change in the place of its application by the taxpayer's independent decision or in the cases defined by subparagraph 169.2.3 of paragraph 169.2 of Article 169 of the Code of Civil Procedure (restrictions on the application of the tax social benefit);
• during the final settlement with a taxpayer who terminates employment with such an employer.
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About the recalculation of accrued income amounts
Subclause 169.4.3 of Clause 169.4 of Article 169 of the Code of Civil Procedure provides that the employer and/or tax agent has the right to recalculate the amounts of accrued income, withheld personal income tax for any period and in any case to determine the correctness of taxation, regardless of whether the taxpayer has the right to apply the tax social benefit.If, as a result of the recalculation, there is an underpayment of withheld tax, the amount of such underpayment is charged by the employer at the expense of the amount of any taxable income (after its taxation) for the relevant month, and in case of insufficient amount of such income - at the expense of the taxable income of the following months, until the full repayment of the amount of such underpayment (clause 169.4.4 clause 169.4 of article 169 of the Code of Civil Procedure).
At the same time, if an overpayment of tax occurs as a result of the recalculation, the amount of the accrued tax liability of the taxpayer for the relevant month is reduced by its amount, and if such amount is insufficient, the amount of tax liabilities of the following tax periods is reduced, until the amount of such overpayment
Income in the form of wages
The results of the annual recalculation of the amounts of income accrued to the taxpayer in the form of wages, as well as the amounts of tax social benefits provided, are displayed by the employer in Appendix 4 "Information on the amounts of accrued income, withheld and paid personal income tax and military duty" to the Tax Calculation of Income Amounts , accrued (paid) for the benefit of taxpayers - natural persons, and the amounts of tax withheld from them, as well as the amounts of the accrued single contribution, approved by order of the Ministry of Finance of Ukraine dated January 13, 2015 No. 4 (hereinafter - Calculation).The same order also approved the Procedure for completing and submitting by tax agents the Tax Calculation of the amounts of income accrued (paid) for the benefit of taxpayers - natural persons, and the amounts of tax withheld from them, as well as the amounts of the accrued single contribution (hereinafter - the Procedure).
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According to Clause 4 of Section IV of the Procedure, the columns in line 06 of Section I "Personalized data on the amounts of income accrued (paid) for the benefit of individuals and accrued (transferred) to the budget of personal income tax and military levy" of Appendix 4DF to the Calculation are filled out, in particular, as follows:
• in columns 3a "Amount of accrued income" and 3 "Amount of paid income" enter the amount of accrued and paid income for the relevant reporting period, taking into account the additional amount;
• in columns 4a "Amount of accrued tax" and 4 "Amount of remitted tax" enter the amount of tax on the income of individuals, taking into account the amount of underpayment/overpayment.
Adjustments of indicators of Annex 4DF to the Calculation are carried out in accordance with clause 10 of Chapter V of the Procedure.
The results of the annual recalculation of the amounts of income accrued to the taxpayer in the form of wages, as well as the amounts of tax social benefits provided, must be reflected in Appendix 4DF to the Calculation for the IV quarter of the reporting year.
