Finally, after almost three years of waiting, on May 25, 2020, the Law № 592-IX “On Amendments to the Law of Ukraine“ On Collection and Accounting of the Single Contribution for Compulsory State Social Insurance ”on Elimination of Discrimination by Payers” was adopted. .

Thanks to the adopted law, the provisions on writing off the amount of arrears from the single contribution, fines and penalties accrued on these amounts of arrears to certain categories of taxpayers for the period from January 1, 2017 to the date of entry into force of Law № 592 (ie, to 03.06.2020).

Who has the right to write off arrears of Single contribution tax?

There are two categories of single contribution payers:

- individual entrepreneurs (except those who have chosen a simplified system of taxation)

- persons engaged in independent professional activity, namely scientific, literary, artistic, artistic, educational or teaching, as well as medical, legal practice, including advocacy, notarial activity, or persons engaged in religious (missionary) activity, other similar activities and receive income from these activities.

Without which conditions is it impossible to write off arrears, fines and penalties?

Taxpayers may exercise the right to write off debts from Single contribution tax if:

1) the relevant payers for the specified period did not receive income (profit) from their activities, which is subject to personal income tax;

2) within 90 calendar days from the date of entry into force of Law № 592 (ie until August 31, 2020 inclusive) the payers submitted the following documents:

from FOPs (except units):

- to the state registrar at the place of location of the registration file of a natural person - entrepreneur of the application for state registration of termination of business activity;

- to the tax authority - reporting in accordance with the requirements of Part 2 of Art. 6 of the Law on SCT for the period from January 1, 2017 to June 3, 2020.

from persons who carry out independent professional activity and receive income from this activity:

- to the tax authority - applications for deregistration as a payer of the single contribution and reporting in accordance with the requirements of Part 2 of Art. 6 of the Law on SCT for the period from January 1, 2017 to June 3, 2020.

Please note that sole proprietors and persons with independent professional activity may not submit reports on Single contribution tax for 2017-20, if they have already submitted them.

What is the algorithm for writing off the amount of arrears?

After receiving all the necessary documents, the tax authority within 15 working days will conduct an in-house inspection, the results of which will decide to write off the amount of arrears, penalties and fines or a reasoned decision to refuse.

We will add that if the payer agreed to write off the debt from the single contribution, he will not be fined for non-submission, late submission, submission not in the prescribed form of reporting provided by this Law.

Who will be denied with write-off of the debt 

The tax authority may refuse to write off the amounts of arrears, penalties and fines, provided that the results of the inspection show that:

1) the taxpayer received taxable personal income tax for the period from 01.01.2017 to 03.06.2020

2) the payer has already paid in full his debt and the relevant fines and penalties or the relevant amounts have been collected from him in full in the manner prescribed by the Law on SCT.

Thus, they will refuse to write off if there is even a minimum income of a private individual for this period. Unequivocally, those sole proprietors who are on the simplified taxation system will not be able to exercise this right.

Most likely, the tax authorities will also deny those sole proprietors and persons with independent professional activity who have submitted applications, respectively, for termination of business activity or for abolition of the status of SCT payer by June 3, 2020 - as Law № 592 requires such an application after entry into force its rules on write-off.

In addition, recourse payments cannot be made to those who have fully (voluntarily or compulsorily) paid SCT before Law 592 was adopted.

If the amounts of arrears, as well as fines and penalties accrued on the amounts of arrears, were partially paid by the payer and / or collected, the tax authority decides to write off the amount of arrears, penalties and penalties in the remaining unpaid.