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 Quite often in the activities of a natural person-entrepreneur there is a situation when there is no money in the current bank account, and it is urgent to transfer payment to the supplier, pay taxes, pay wages and so on. In addition, this applies to cases where you have just started a business, opened an account, but there are no funds.

 In the above issues, the entrepreneur decides to replenish the of individuals of entrepreneurs account in cash. And, as practice shows, quite often such funds are equated to the income of employees of the State Tax Service of Ukraine in the future during the inspection. This is important for of individuals of entrepreneurs of group 3 and those that are close to the income limit on the simplified taxation system.

So how do you properly deposit your funds and avoid double taxation?

1. Making revenue

 This method is suitable for those who receive payment for their goods or services in cash. If on the day of receipt of cash income reflected such an amount in the Income Book, and then deposit this money into your business account – then re-reflect this amount in the Book and do not need to tax. In the purpose of payment should be written: “Revenue for (period)…”

2. Contribution of own funds

 It would seem that there can be no features here. Funds that have already been taxed cannot be income. By the way, this opinion is supported by judicial practice. However, the inspectors of the State Tax Service of Ukraine, as always, have their own opinion. Taxpayers often equate the amount of funds that a private individual contributes to a business account “as own funds” to the income of a private individual in the simplified taxation system.

 Therefore, if you are ready, if necessary, to defend your opinion up to the court appeal procedure, you can replenish the of individuals of entrepreneurs account with your own funds. It is necessary to indicate the purpose of payment: “replenishment of working capital with own funds after tax.”

3. Repayable financial assistance

 Another way to replenish the account of a self-employed person without personal funds is to draw up a contract for the provision of repayable financial assistance. But here it is necessary to consider one nuance: the physical person-entrepreneur cannot conclude such contract with itself. The borrower can be your trustee, friend, comrade or counterparty (partner). The purpose of the payment should be as follows: “repayable financial assistance under the contract № ….”.

 In addition, it should be remembered that such repayable financial assistance must be repaid within twelve calendar months from the date of receipt. Otherwise, this amount will have to be included in income.

 To avoid mistakes in filling out and submitting reports, we recommend using the professional help of a lawyer and an accountant. Prikhodko & Partners has many years of business support experience, so our professionals will provide you with professional and qualified assistance in full and properly. Contact us, we will be happy to help you.

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