We remind that the Law No. 540, which came into force on 2 April 2020, amended paragraph 291.4 of Sec. 1 “Simplified System of Taxation, Accounting and Reporting” section. XIV "Special tax regimes" of the Tax Code of Ukraine.

According to them, there is an increase in the marginal amounts of income that entitle business entities to apply a simplified system of taxation, accounting and reporting:

• for the 1 group of single tax payers (individual enterpreuners that do not use the work of hired persons, exclusively sell goods from retail outlets in the markets and / or carry out economic activities for providing household services to the population) the amount of income during the calendar year should not exceed UAH 1 million ( by April 2, 2020, UAH 300 thousand);
• for the 2 group of single tax payers (individual enterpreuners that carry out business activities for providing services, including household, single tax payers and / or the population, production and / or sale of goods, activity in the field of restaurant business, provided that during the calendar year they do not use the work of hired persons or the number of persons who are with them in employment, at the same time does not exceed ten) the amount of income during the calendar year should not exceed 5 million UAH (until 02.04.2020 - 1.5 million UAH); 
• for the 3 group of single tax payers (individual enterpreuners who do not use the employment of employees or the number of persons with them in employment, is not limited and legal entities - entities of any legal form) the amount of income during the calendar year should not  exceed UAH 7 million (till April 2, 2020 - UAH 5 million).

PLEASE NOTE: Changes in the Single Tax Payer Group since quater 3, 2020

According to paragraphs. 298.1.5 TCUs, single tax payers have the right to change the group of single tax payers (in connection with the increase of marginal income levels), but only from the third quarter of 2020, subject to other requirements of Sec. 1 section XIV TCU. The relevant application must be submitted in one of the ways specified in paragraphs. 298.1.1 TCU, not later than June 15, 2020. At that, the sole taxpayer of the 3 groups, who is a VAT payer, shall cancel the registration of the VAT payer in the order established by the TCU, if he or she is selected by the 1st or 2nd group.

PLEASE NOTE: The impact of exceeding revenue margins during 2020

The consequences of exceeding the margins of income for the sole taxpayer of the respective group, if such excess occurs during the calendar year, are determined by clause 293.8 of the Tax Code (obligation to switch to other taxes, elect another group of the simplified tax system, etc.). In this case, the provisions of the TCU on changing the limits to the increase can only be applied to cases of excess, which have occurred since 02.04.2020. For example, if the income of the payer of the EP Group 2 as of 30.03.2020 amounted to 1.6 million UAH (which is more than the limit of UAH 1.5 million, effective for 2020 as of that date), this taxpayer must meet the requirements of item 293.8 of the Tax Code. Instead, if such an excess occurred in April 2020, there would be no reason to apply these rules to theTCU.

For payers who, as of 1 January 2020, were registered payers of the single tax of the respective group and do not change that group during the calendar year, there should be the marginal amounts of income entitling economic entities to apply the simplified system of taxation, accounting and reporting in 2020 (per calendar year).

We provide a table of calculations of the marginal volumes of income, based on the period of validity of the relevant revision of item 291.4 of the TCU and calendar days of 2020:

* In 2020, these provisions were effective for 92 of the 366 calendar days: January 1 through April 1, 2020 (inclusive).

** In 2020, these provisions will be effective for 274 calendar days: from 2 April to 31 December 2020 (inclusive).