Legislative acts for individual entrepreneurs from 13/05/2020. Who should pay ERUs?
There is good news for sole proprietorship who are payers of ERUs?
Last week, namely on May 13, 2020, some important legislative acts were adopted in the Verkhovna Rada of Ukraine. Among them there are those that are important specifically for the sole proprietor. In particular, the exemption from the payment of ERUs “for themselves” was extended to individual entrepreneurs and independent members of farms for the month of May. Also, for entrepreneurs who are on a common taxation system, a corresponding norm was introduced. According to it, they can not pay ERUs for the months in which they did not receive profit. But this rule will be in effect from 2021. That is, if we analyze these regulatory legal acts, then in accordance with the Law of Ukraine No. 3329, individual entrepreneurs in May “for themselves” ERUs may not pay.
At the same time, it is important that it is not taken into account whether the individual entrepreneur had income during this period or not. So, for the second quarter of 2020, entrepreneurs will need to pay ERUs only for one month – June. Payment deadline is June 20, 2020. But the months in which the individual entrepreneur was exempted from the payment of ERUs will be taken into account in the length of service.
When submitting reports, it is important not to show accruals on ERUs in the D5 form for months in which payment is not required by law. Since, if specified, it will be considered that the payer voluntarily decided to pay ERUs for the months in which he was exempted from such payment.
The adopted law provides for many important changes, which include:
✅ extension of the term of the amnesty for tax offenses, a ban on audits (tax, documentary, on the accrual of ERUs);
✅ The calculation of penalties for taxes and ERUs has been stopped in accordance with the statute of limitations provided for in Art. 102 of the Tax Code of Ukraine;
✅ The procedure for receiving unemployment benefits in case of partial unemployment has been slightly improved.
As for the latter, the Law stipulates that such assistance is not taxed. That is, it does not pay personal income tax and military duty. Although this rule is already enshrined in the Tax Code of Ukraine, namely in clause 165.1.1.
In particular, it was noted that state aid, social assistance and other payments from the State budget are not included in the total monthly income, which should be taxed. They also included individual entrepreneurs in the list of persons entitled to receive such assistance. That is, they will be able to receive assistance not only for workers, but also for themselves, in the event of a work stoppage and loss of income due to quarantine. The deadline for applying for help to the employment center was also extended to 90 days, previously it was 30 days from the date of suspension of work.
ERUs for sole proprietorships that are under the general taxation system
Very important changes were made, provided for in the bill №2166, but they come into force only from 2021.
These changes include:
? Individual entrepreneurs who are under the general taxation system may not pay ERUs “for themselves” in the month in which they do not receive income. This is provided for in paragraph 2 of Part 1 of Art. 7 of the Law of Ukraine “On the Unified Social Contribution”. For those entrepreneurs who were simply registered and did not pay ERUs for themselves since 01.01.2017, it is possible to write off the arrears that were accrued to them during this period. To do this, it is necessary to submit to the tax authorities an application and form D5, and an application to the state registrar to terminate the registration of an individual entrepreneur. If such a debt has already been paid, then it cannot be returned. In the case of partial payment, only the part that has not yet been paid can be debited. Those taxpayers who, although they did not receive income, but paid “for themselves” ERUs, will not be refunded.
? Individual entrepreneurs who are under the general taxation system or who are payers of the single tax and work under an employment contract may not pay ERUs for themselves if such payment was made by the employer at the main place of work, but in an amount not lower than the insurance premium. This is provided for in Part 6 of Art. 4 of the Law of Ukraine “On the Unified Social Contribution”.
?The list of persons who may not pay ERUs “for themselves” has increased. These are persons engaged in independent professional activities, if they are included in the list provided for in Part 4 of Art. 4 Law of Ukraine “On the Unified Social Contribution”. Individual entrepreneurs that are engaged in independent professional activities, members of farms that receive pensions for seniority may also not pay ERUs “for themselves” if they have not reached the age stipulated by the Law of Ukraine “On Compulsory State Pension Insurance”.
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