Publication date: 13.05.2024
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The company transferred funds from the employee's income to the child's education: is he entitled to a tax discount
QUESTION
Does an employee have the right to a tax discount if, on his behalf, the company transferred funds from his income for the child's education, but the receipt shows the company as the "Payer" and the name of the employee in the "Purpose of payment"?
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ANSWER
According to subsection 166.3.3 of clause 166.3 of article 166 of the Tax Code of Ukraine (hereinafter referred to as the Tax Code of Ukraine), the payer of personal income tax has the right to include in the tax deduction in the reduction of the taxable income of the tax payer as a result of the reporting tax year, calculated in the form of wages, reduced taking into account the provisions of Clause 164.6 of Article 164 of the Code of Civil Procedure, the sum of funds paid by the taxpayer for the benefit of domestic institutions of pre-school, extra-school, general secondary, professional (vocational-technical) and higher education to compensate the cost of obtaining the relevant education by such a taxpayer and/or a member of his family of the first degree of kinship and/or a person who has been placed under guardianship or guardianship or who has been placed in a foster family, a family-type orphanage, if such a tax payer has been appointed as a guardian, custodian, foster parent, foster mother, father- educator, mother-educator.The tax discount includes the expenses actually incurred by the taxpayer during the reporting tax year, confirmed by relevant payment and settlement documents, in particular, receipts, fiscal or merchandise checks, profitable cash orders identifying the seller of goods (works, services) and the person applying for a tax discount (of their buyer (recipient)), as well as copies of contracts, if available, in which the cost of such goods (works, services) and the payment term for such goods (works, services) must be reflected - sub-clause 166.2.1 of clause 166.2 Article 166 of the Code of Criminal Procedure.
Decision
In our case, to confirm the expenses incurred for education, the payer must receive:
• a certificate from the employer who, on his behalf, transferred the sums of funds from the income received by him;
• copies of the payment documents used for the transfer.
In accordance with the requirements of Clause 41 of Chapter II of the Instruction on non-cash payments in the national currency of payment service users, approved by the Resolution of the Board of the National Bank of Ukraine dated July 29, 2022 No. 163, the details "Payment purpose" of the payment instruction are filled out by the payer in such a way as to provide the recipient of the funds with complete information about payment and documents on the basis of which the payment transaction is carried out. The completeness of the information is determined by the payer, taking into account the requirements of the legislation of Ukraine.Taking into account the above, a certificate from an employer who, on behalf of a taxpayer, transferred sums of money from his income to educational institutions to pay for his education or the education of other members of his family of the first degree of consanguinity, is the basis for the taxpayer to receive a tax discount for ed
