Publication date: 07.06.2024
Consultations on the single tax: What you need to know
Introduction
The single tax is an important simplified tax regime for small businesses in Ukraine. It provides significant advantages for entrepreneurs, in particular, a simplified system of reporting and taxation. However, for effective use of this system, it is important to understand all its nuances and features. In this article, we will provide comprehensive advice on the single tax, which will help you to apply this regime effectively in your business.
Who can apply the single tax?
Individual entrepreneurs and legal entities who meet the following criteria have the right to apply the single tax:
- Annual income does not exceed 7 million hryvnias.
-The average number of employees during the reporting period does not exceed 250 people.
-Certain types of activities defined by the Tax Code of Ukraine.
In addition, there are certain restrictions on the types of activities that can be included in the single tax. For example, business entities that produce or sell excise goods, extract and sell minerals, etc. cannot apply a single tax.
Single tax rates and groups
The single tax provides for 4 groups of payers, each of which has its own tax rate:
The first group is natural persons-entrepreneurs whose annual income does not exceed 1 million hryvnias. The rate is from 2% to 10% of the subsistence minimum.
The second group is natural persons-entrepreneurs whose annual income does not exceed 5 million hryvnias. The rate is 5% of income.The third group - natural persons-entrepreneurs and legal entities, whose annual income does not exceed 7 million hryvnias. The rate is 3% of income (with VAT) or 5% of income (without VAT).
The fourth group is agricultural producers. The rate is from 0.95% to 6.33% of the normative monetary value of the land.
The choice of a single tax group is an important strategic decision for a business, as it determines not only the tax rate, but also other duties and features of record keeping.
Advantages and disadvantages of a single tax
The application of a single tax has a number of key advantages for small businesses:
Advantages:
-Simplified reporting and accounting system
- Fixed tax rate
- Option not to pay VAT (for 3 groups)
-No need to pay income tax
- The possibility of reducing the tax burden
Disadvantages:
-Restrictions on the amount of income and the number of employees
-Restrictions on types of activities
-Higher tax rates compared to the general system for highly profitable businesses
- The need to pay a single social contribution
Thus, the flat tax is an effective tool for small businesses, but requires a careful analysis of compliance with the criteria and consideration of both the advantages and limitations of this system.Accounting and reporting
Simplified requirements for record keeping and reporting are established for single tax payers:
-Maintenance of the income accounting book
- Submission of a quarterly declaration on the single tax
-Payment of the single tax in monthly advance payments
- Option not to use settlement transaction recorders (SRS) for groups 1 and 2
It is important to comply with the established deadlines for submitting reports and paying tax obligations to avoid fines and penalties.
Special cases
There are also special cases when it is necessary to take into account additional requirements for a single tax:
-Changing the single tax payer group
- Termination of business activity
- Conducting several types of activities
-Starting or ending the application of VAT
In such cases, it is important to notify the regulatory authorities of changes in a timely manner and follow the established procedure.
Conclusion
The single tax is an important taxation tool for small businesses in Ukraine. For its effective application, it is necessary to study in detail the compliance criteria, the features of different groups of payers, the requirements for record keeping and reporting, and also to be ready for possible changes in the activity. Adherence to these consultations will help you optimize your tax burden and contribute to the development of your business.
