What indicators of activity (for a period of stay on the general taxation system or for the six months of 2022 cumulatively) are taken into account in financial reporting, which are submitted with the corporate income tax declaration for the six months...Chapter: Question of the day

What indicators of activity (for a period of stay on the general taxation system or for the six months of 2022 cumulatively) are taken into account in financial reporting, which are submitted with the corporate income tax declaration for the six months of 2022 by the income tax payer who, from 01.05.2022, switched to paying single tax at 2% rate and renewed payment of the corporate income tax from June 1, 2022?

Paragraph 137.4 Article 137 of the Tax Code of Ukraine as № 2755-VI of 02.122010 (hereinafter – TCU) stipulates that tax (reporting) periods for the corporate income tax, except for cases provided for in Article 137.5. 137 of the TCU, there are calendar ones: quarter, half year, three quarters, year. Herewith, tax declaration is calculated using the cumulative total.

Taxpayer, who during a calendar year switched to paying single tax at 2% rate, in case that such payer renews paying corporate income tax in the same year, prepares and submits the corporate income tax declaration with the cumulative amount from the beginning of such calendar year. At the same time, results of activities for periods of stay are subject to the single tax payment at 2% rate are not taken into account determining the corporate income taxation object, specified in Sub-paragraph 134.1.1 Paragraph 134.1 Article 134 of the TCU, taking into account provisions of Sub-section 4 Section XX "Transitional Provisions" of the TCU for income tax payers who switched from the simplified taxation system to the general taxation system (Clause 6 of Sub-paragraph 9.12 Paragraph 9 Sub-section 8 Section XX "Transitional Provisions" of the TCU).

Taking into account provisions of Paragraph 46.2 Article 46 of the TCU, the income tax payer submits quarterly or annual financial reporting with the corresponding corporate income tax declaration (hereinafter – Declaration) in manner prescribed for submitting tax declaration, taking into account requirements of Article 137 of the TCU.

Financial reporting or report of financial results (balance sheet) and statement of profit and loss and other comprehensive income (report of financial results) are annex to Declaration and integral part thereof.

Law of Ukraine № 996-XIV as of 16.07.1999 "On accounting and financial reporting in Ukraine" as amended (hereinafter – Law № 996) defines legal principles of regulation, organization, accounting and financial reporting in Ukraine.

Part 1 of Article 13 of the Law № 996 establishes that reporting period for compiling financial reporting is a calendar year. Interim financial reporting is based on results of the first quarter, first half of the year, nine months.

Along with this, Paragraph 2 of Procedure for submitting financial reporting, approved by Resolution of the Cabinet of Ministers of Ukraine № 419 as of 28.02.20000 (with changes and amendments) determinec that income tax payers, in cases defined by the law, submit interim (I quarter, first half year, nine months) and annual financial reporting to tax authorities according to procedure provided by the TCU for submitting tax declaration.

Taking into account above specified, the taxpayer who switched to paying single tax at 2% rate from 01.05.2022 and renewed payment of the corporate income tax from June 1, 2022 with Declaration for the half-year reporting period of 2022 submits financial reporting, which consist of a cumulative total for the half-year reporting period of 2022, starting from 01.01.2022 to 06.30.2022.

At the same time, results of activities for a period of the stay are subject to the single tax payment at 2% rate (from 01.05.2022 to 01.06.2022) are not taken into account in Declaration determining taxation object with the specified corporate income tax, specified in Sub-paragraph 134.1.1 Paragraph 134.1 Article 134 of the TCU, taking into account provisions of Sub-section 4 Section ХХ "Transitional Provisions" of the TCU for corporate income tax payers who switched from the simplified taxation system to the general taxation system.

It is worth noting that the taxpayer can submit addition to such Declaration, provided for in Article 46.4. 46 of the TCU, with presentation of explanations regarding the calculated indicators of tax and financial reporting for relevant periods in an arbitrary form with indication of this fact in a specially designated place in Declaration. Such addition has to be considered as integral part of Declaration. Taxpayer who submits reporting in electronic form must submit such addition in the electronic form.

 

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