What threatens Ukrainians for failure to submit a tax return or

[http://www.andreydovbenko.com/en/home] Home Biography Blog Video Publications Legal World Photo gallery Contacts English Українська Русский Menu Home Biography Blog Video Publications Legal World Photo gallery Contacts English Українська Русский What threatens Ukrainians for failure to submit a tax return or a mistake in it UBR.UA 03 May 2017 Author: KONSTANIN SIMONENKO Lawyers have told about the peculiarities of the process of declaring citizens incomes For the Ukrainians, the turning point is approaching. Until May 1, they should have submitted their income declarations to the Tax Authority as per the law. This provision applies to the citizens who acquired additional income besides their main place of work (in case if the income tax on individuals was not collected at the time of payment). Everyone who failed to declare on time still can do it today. “This year, due to the fact that 1 st and 2 nd May are holidays, the deadline for submission of declarations will be 3 rd May”, – Alexey Khomyakov, the partner of the law firm “Asters” explained to UBR.ua. In addition, from January 1, 2017, the form of the tax declaration on property status and income was changed itself. This form should be submitted by the payers of personal income tax and military fees in the cases provided for in the Section IV of the Tax Code of Ukraine. In particular, the number of attachments to the declaration has been reduced from four to two. The fact is that in 2016 a single tax rate was changed to be 18% instead of 15% and 20% as it was before, which made it unnecessary to submit attachment together with the declaration, where it was indicated a recalculation of personal income tax when obtaining income from two or more tax agents. Also, the addendum to the declaration was canceled, where the payer indicated a calculation of tax liabilities on income acquired from abroad. So, now the amount of foreign income (recalculated in Hryvnia at the rate of the NBU at the time of acquisition), the amount of tax, information about the country of origin of income and the name of the currency is indicated in the declaration without filling in a separate addendum thereto. Who should be reporting As lawyers explain, there is no such thing as general declaration in Ukraine. At the same time, the obligation to file a declaration arises in two cases. It’s either acquisition of foreign income, or income from individuals who are not tax agents. A tax agent is any legal entity or individual entrepreneur who pays a salary to an employee or other income (for example, under a contract for service). In this case a tax agent should pay a tax on such type of income and report to the fiscal service for that person. Therefore, if the fees were received for services rendered by individual who do not conduct business activity, it should also be included in his declaration. “For example, if in 2016 you received only a salary, then the employer was paying the tax for you, so you do not need to submit a separate declaration. But if you lease your apartment to an individual or obtain income from a foreign citizen or company, you need to declare it and to pay the tax”, – Julia Lavreha, a lawyer of the legal firm “ILF” explained to UBR.ua. Ukrainians started to MASS sue the tax authorities In addition to income on leasing property, you should also declare receipt of gifts and coming into an inheritance from all citizens who are not related to the first degree of kinship (such as parents, husband or wife, children). However, Alexey Khomyakov recommends those who received only salary during last year to submit a declaration too, in order to keep receiving registered form references from the tax authorities that confirm the source of funds’ origin in case if a person plans expensive purchases in future (such as apartment, car, etc.). As the Managing Partner of the law firm “N&D” Andrey Dovbenko points out, if an income on entrepreneurial activity is obtained or independent professional activities are performed (i.e. by notaries, lawyers, etc.) it is also required to submit an income tax return. It is important to keep in mind that the declaration indicates the net taxable income of self-employed persons. Individual entrepreneurs (except for simplified taxpayers) should indicate net taxable income in column 3 of line 10.7 of the declaration, and individuals engaged in independent professional activity should indicate it in column 3 of line 10.8 of the declaration respectively. Finally, the declarations should be submitted by the persons who carried out transactions with investment assets (i.e. securities, derivatives, corporate rights), as well as in other cases directly provided for. “Such incomes are not taxed when they are paid, but they are not exempt from taxation in general. For example, income on operations with investment assets are to be taxed”, – explained Andrey Dovbenko. There are also cases when acquisition of income is not connected with payment by the tax agent, for example, the receipt of property in the ownership through the court decision. This is also considered as an income to be declared. When you can do without a declaration In all other cases, the liability of the payer to declare his income is deemed to be fulfilled if he was obtaining income within a year as follows: solely from the tax agents; income on sale of property with notarization of the contract and when the relevant tax was paid; income in the form of an inheritance that is taxed at zero rate or from which the tax has already been paid. It means that the declaration is not required to be submitted. “In addition to that, in paragraph 179.4 of the Article 179 of the Tax Code of Ukraine there are listed the categories of taxpayers who are exempt from the obligation to submit a declaration. These include, in particular, minors and persons who are in military service as of the end of the year 2016”, – Dmitry Savchuk, the senior lawyer of the law firm “Lavrynovych & Partners” said to UBR.ua. As Julia Lavreha notes, citizens are to be exempt from submitting the declaration whose incomes are not taxable (in some cases, these are state payments, targeted assistance, pensions up to 10 subsistence minimums, that is, up to 13 thousand UAH, etc.) or which are taxed at a zero rate (for example, when coming into an inheritance from close relatives). Andrey Dovbenko: “The export duty on scrap will bring more than 500 million UAH to the budget annually” For those who did not have enough time to submit a declaration The deadline is May 3, 2017, when Ukrainians should submit a declaration on property status and income for the year of 2016. If to send the declaration by mail, then it should be done in advance, namely 5 days before the deadline. Lawyers remind that these terms can be extended in certain cases. “Paragraph 102.6. of the Article 102 of the Tax Code of Ukraine provides for the possibility of extending the deadline for submitting a declaration on a written request from the taxpayer. It also lists the reasons for such an extension. For example, if a taxpayer is outside of Ukraine, it’s a reason for such extension of deadline”, – Dmitry Savchuk assured. The procedure for extension of terms is regulated by the order of the State Tax Administration of Ukraine No.1044 of December 24, 2010. Julia Lavreha reminded that to be granted such a delay the relevant documents should be provided which confirm the force majeure (such as natural disaster, military emergency, civil demonstrations, fire, etc.). The confirmation can be obtained at the Chamber of Commerce and Trade in advance and it’s paid. According to Alexey Khomyakov, to extend the deadline for submitting a declaration, it is necessary to apply to the tax authority in writing and have the relevant grounds for that. “Also in some cases, the deadline for submitting a declaration can be postponed. For example, if a resident of Ukraine acquires foreign income, then he can apply with a request to postpone the deadline for submitting a declaration until December 31. However, such an opportunity applies only to a person who has paid a foreign tax and can set it off against paying a Ukrainian tax, but as of May 1 he does not have the relevant documents confirming the payment of a foreign tax”, – noted Alexey Khomyakov. Punishment for mistakes in a declaration The lawyers of the law firm “Lavrynovych & Partners” said that the Tax Code of Ukraine, as well as the instructions on how to fill out the declaration, allow to submit clarifying declaration in case if the taxpayer’s mistakes are revealed in the previously submitted declaration, and such clarifying information should cover both the reporting year and the previous ones as well. The Tax Code of Ukraine allow for three options for clarifying a previously submitted declaration by providing the following: a new reporting declaration (before the deadline for submission); a clarifying declaration (at any time after the deadline for submission); a statement of declaration for the next year with correction of mistakes made in the previous year. “If such clarification leads to an increase in tax liabilities, the citizen is obliged to pay an additional tax (18% of personal income tax and 1.5% of military duty), as well as a fine for late payment of tax (3% or 5% of the amount of underpayment)”, – the lawyers of the law firm “Asters” explained. As Andrey Dovbenko specifies, the fine has to be paid only in case if clarification was submitted after missing the deadline for filing the declaration. Besides, it is possible to correct the mistakes made in previous declarations within the deadline that is set for 1095 days (3 years) from the day of submission of the relevant declaration. Those who decided not to submit a declaration at all, should keep in mind that for the first failure to do so there is a fine of UAH 170 and for a repeated one in the same year a fine of UAH 1,020 may be applied (in cases where it is applicable). Andrey Dovbenko: “The control over foreign exchange incomes in the sphere of the works and services export can be cancelled in Ukraine” “The fine will be imposed in case of delay for one day only, as well as in case of failure to submit a declaration within several years. The Ukrainian citizen will find out about that when he receives the tax notice / decision by mail. This can happen at any time within 3 years from the time of such violation”, – said Julia Lavrecha. According to her, in any case, the tax authorities welcome payment of a fine on the initiative of the payer, emphasizing the inevitability of punishment by that. “Submitting a tax return late or declaring twisted data in it entails imposition of a fine in the amount of 51 UAH to 136 UAH in accordance with the Article 164-1 of the Code of Ukraine on Administrative Offenses”, – said Dmitry Savchuk. Yulia Lavreha reminded that the declaration, even untimely submitted, may affect the amount of fines to be paid for such failure to pay taxes and penalties in due time. Thus, the penalty for failure to pay the tax amount indicated in the declaration constitutes 10% of the outstanding amount (20% if the delay in payment is more than 30 calendar days), and the fine is applied only after 90 days from the deadline (August 1). “The penalty is calculated at the rate of 120% of the bank rate of the NBU effective on the first day of delay or on the day of payment of the tax obligation, depending on which of the rates will be bigger”, – said Andrey Dovbenko. If the taxpayer ignores its obligation to submit a declaration, then the tax authority may conduct an unscheduled audit and determine the amount of underreporting tax liabilities. Based on the results of such audit, a tax notice / decision will be taken, which will determine the amount of the tax payable, as well as the penalties will be imposed that constitute 25% of the understatement amount. “If in the past 3 years the taxpayer has already been brought to responsibility for understating tax liabilities, the penalty will be 50% of the unpaid tax liability in this case. The tax itself will also have to be paid anyway”, – says Alexey Khomyakov. Besides, if understatement of tax liabilities, for example, for the year of 2016 (for which declarations are now being submitted) amounts to UAH 689,000 or more, this will be the basis for initiating a criminal case under the Article 212 of the Criminal Code of Ukraine (evasion of the payment of taxes). Original article: http://ubr.ua/finances/taxes/chto-hrozit-ukraintsam-za-nepodachu-nalohovoj-deklaratsii-ili-oshibki-v-nej-3841400 Facebook Twitter Google+ Pinterest LinkedIn Previous Playing a Monopoly game. What will the banking market be turned into if the state dominates Next Andrey Dovbenko: My legal specialization is judicial and arbitration practice Previous Playing a Monopoly game. What will the banking market be turned into if the state dominates Next Andrey Dovbenko: My legal specialization is judicial and arbitration practice Related Posts Ukrainian banks were banned from infringing on the housing of the defaulting borrowers April 11, 2017 The “hostages” of the electorate: the politicians will hamper implementation of the IMF requirements January 24, 2017 Andrey Dovbenko: “The control over foreign exchange incomes in the sphere of the works and services export can be cancelled in Ukraine” September 5, 2016 ANDREY DOVBENKO: “DEREGULATION OF THE TOURISM INDUSTRY WILL REDUCE THE COST OF THE INTERNATIONAL TOURS BY 10-15% IN UKRAINE” August 29, 2016 Clients of the bankrupt banks in Ukraine face problems with debts repayment March 15, 2017 The Bank “Veles” dished it out from being terminated November 25, 2016 Ukraine is being prepared for liquidation of 40 banks in July Top managers of “PrivatBank” could face criminal cases to be initiated against them Why Poroshenko does not sign state guarantees for “PrivatBank” Ukrainian banks were banned from infringing on the housing of the defaulting borrowers How to increase export and foreign currency influx into Ukraine? Where to invest your money so that they bring you the maximum dividends Property Rights clones turn to beсome the investment “rakes” in the end On October 19, the businesses received a protection against bankruptcy Copyright 2016, Vanda - All Rights Reserved.