State Tax Administration of Ukraine

1
State Tax Administration of Ukraine
Taxation of Small Businesses in Ukraine and
Underlying Tax Risks (Current taxation regimes
for small enterprises as source of wide-spread
practice for tax evasion Legislative regulation
of taxation related issues as element of program
for promotion of development of MSE)
Conference on Taxation of Micro and small
Businesses May 4 6 of 2011, Tbilisi, Georgia

2
Criteria for assigning of taxpayers to large,
medium and small taxpayers groups
?) small
Legal persons
Gross income
lt 70 million Grivna (6 million )
Number of employees
lt 50 persons
Natural persons and subjects involved in economic activities
b) large
Legal persons
Gross income
gt 100 million Grivna (8,6 million )
Number of employees
gt 250 persons
?) medium
All taxpayers, not included in groups a) and b)
3
Small business taxation systems
General
Simplified
Unified tax for legal and natural persons
subjects involved in economic activities
Flat tax for subjects involved in economic
activities natural persons
4
Unified tax
Legal persons Gross income lt 1million Grivna (86,5 thousand ) Number of employees 50 Natural persons entrepreneurs Proceeds from sales lt 500 thousand Grivna (43,3 thousand ) Number of hired staff 10
The system of unified tax regime shall not extend to following entities subjects involved in economic activities, which are subject to special patenting Trusts , insurance companies, banks, other financial -crediting institutions and non-banking financial institutions Natural persons entrepreneurs, who are involved in trade with tobacco and alcoholic beverages and combustive-lubricating materials Gambling business and related activities, conducting of lotteries Currency exchanges Producers of excise goods, export-import of such goods, wholesale and retail trade with combustive-lubricating materials Extraction and production of precious metals and stones, wholesale and retail sales of such make.
5
Unified tax
Tax rates
Legal persons 6 of proceeds from sales VAT 10 of proceeds from sales in case of inclusion of VAT in unified tax unified social contribution (from 36,7 to 49,7) Natural persons From 20 to 200 Grivna per month (1,7-17,3) unified social contribution (no less than 34,7 of minimum wages - minimal amount of unified payment for April shall amount to 960 Grivna ? 34,7 333,12 Grivna.
Exemptions Profit tax VAT Tax on income of natural persons Land tax 12 other taxes and duties .
Exempted from requirement of maintaining of cash registers And benefit from simplified accounting
6
Flat tax
Natural persons entrepreneurs, who sell goods and offer related services on markets Gross income thousand Grivna (10,3 thousand ) Number of wage laborers 5
Restrictions Are not authorized to trade with alcoholic beverages
Tax rates From 20 to 100 Grivna
Exempted from Maintaining of accounting From requirement of maintaining of cash registers
7
Share of proceeds from subjects of economic
activities taxed on the basis of simplified tax
regime as of 2010
Total Simplified taxation Share in
Number of subjects (legal and natural persons) (thousand) 3570 1400 39
Proceeds into budget (million Grivna) 210 1,9 0,9
8
Schemes of tax evasion and minimization of tax
payments

• Splitting of a business
• Non-disclosure of proceeds due to failure of
  accounting or exemption from use of cash
  registers
• Provision of fictitious services
• - Cashing and etc.

9
Scheme of provision of fictitious services or
cashing
Budget 200 Grivna
money
Entrepreneur, taxed by simplified regime gtgt 3
money
Ordinary company gtgt 1
Buffer company gtgt 2
Fictitious services (works)
Fictitious services (works)
Minimization of payments
Withdrawal of 500 Grivna
10
Scheme of tax evasion through splitting of
business
Minimization of tax on income of natural persons
and contributions into social funds
Company a
Hiring of employees by entrepreneurs, who benefit
from simplified tax regime (b)
Money
(b)
Services (works)
Budget loses in tax proceeds around 1 billion
Grivna from income tax of natural persons and 2
billion Grivnas in social contributions
Budget 200 Grivnas (2400 Grivnas per year)
11
Legislative regulation of taxation issues as
element of program on promotion of development of
small businesses

• Starting from 01.04.11 the Tax Code prohibits
  payers of income tax to charge to expenses
  amounts spent on procurement of goods (works,
  services) from natural persons, who are taxed by
  unified tax. (not considered as a deductible
  expense)
• Tax holidays for small taxpayers, who pay
  income tax.
• Simplified system of registration (single window
  principle, principle of self-declaration)
• Reduction of licenses and permits for
  implementation of different types of economic
  activities
• Further reformation of simplified taxation
  system

12
State Tax authorities of Ukraine
Thank you for your attention
??????????? ?? ???? ??????????????? ?????- ?
?????? ??????? 4 6 ??? 2011 ????, ???????,
??????