ACTION ON COMPLETED WORKS OR PROVIDED FOP SERVICES

 Very often large businesses need to get a particular service or perform some type of work. Collaborating with another company often requires a lot of time and material costs. And working with a private entrepreneur will help reduce the costs of certain types of work or services. In this way, the company can optimize costs and get more profit in the end.

 The cost of services received from the entrepreneur, according to accounting rules, are taken into account when determining the object of taxation.

 Receiving services or works does not generate tax records that may further affect your financial performance.

 In order not to report further on the income from cooperation with the entrepreneur, it is necessary to correctly define the category of works and services.

 It is better to cooperate on those works and services, the cost of which can be shown immediately in the reporting documentation, precisely during the period of receipt.

 According to Art. 4 of the Law of Ukraine "On Accounting" is the basic principle of accrual of income and expenses.

 According to this principle, income and expenses are shown in accounting and financial statements at the time they arise, regardless of the date of receipt or payment of funds.

 Therefore, if the execution of certain works or the provision of services is necessary to obtain regular income (for example, once a quarter), then the costs must also be fixed at the same time.

 But if expenditures are not directly related to the income received, they can be recognized as expenditures during the period in which they are incurred.

 An entity recognizes expenses in the period to which they relate. Either in conjunction with the revenue received, or in the period of its actual realization.

 An act of work performed or services provided is an official document that shows the actual performance of the work. But not always by the act of work can be traced the cost of the enterprise.

 In order for an act to be recognized as a proper document, it is necessary that it has all the necessary details.

 If an entrepreneur performs certain work or provides services and has drawn up an act between the enterprise and the entrepreneur, then he does not show income. After all, entrepreneurs who are on the simplified or general tax system show the income by cash method.

 For entrepreneurs of the general system of taxation according to item 177.2 of the Tax Code of Ukraine the object of taxation is net, actually received income.

 And for sole proprietors of income tax payers in accordance with paragraph 292.1. Tax Code of Ukraine is the income received in the reporting period in cash.

 For entrepreneurs of any form of taxation, the income arises from the moment when the money is received by the entrepreneur or transferred to the current account.

 Therefore, contrary to the fact that the services are rendered and this is confirmed by the act of rendering services or performing works of income the entrepreneur does not arise until the funds are credited to the account.

 But the audit authorities, in particular the tax authorities, indicate that they lacked one primary document for reporting. According to the tax-guided methodological guidelines, they check the authority of persons to sign the documents, the movement of funds during the economic activity, as well as the possibility of the entrepreneur to perform a particular service or perform a job. That is, the entrepreneur must have either qualified personnel to perform the work, or some technical support to provide services.

 It is better to have a written agreement in the case of a relationship between an entrepreneur and an enterprise. Which will meet the requirements of Art. 208 of the Civil Code of Ukraine.

 The contract should clearly state that one of the parties is an individual - an entrepreneur.

 It will not be superfluous, besides the act of completed works, to place an order for the performance of work or provision of services, and for the entrepreneur to have a report on the cost of providing services or performance of works with a detailed calculation of their cost.