Taxes for sole proprietors in 2022. Photo: horoshop.ua
From January 1, 2022, the minimum wage (MW) in Ukraine is 6,500 UAH (from October 1— 6,700 UAH). The minimum subsistence level for the employable persons has also changed. These two parameters determine the size of taxes, fines, and restrictions for sole proprietors.
Annual income caps for sole proprietors
The amount of income of single tax payers in 2022 should not exceed:
- for the I group—167 amounts of minimum wages (MW), or 1,085,500 UAH;
- for the II group—834 MWs, or 5,421,000 UAH;
- for the third group—167 MWs, or 7,585,500 UAH.
In case of exceeding the prescribed amount of the income, taxpayers, upon their application, transfer to another group of the single tax or to the general taxation system from the next quarter. A 15% rate is applied to the excess amount.
Unified social tax (UST) amount
The maximum base for UST charges is 15 times the minimum wage. Therefore, the maximum amount of UST that the sole proprietor pays, from January 1, will be 21,450 UAH (6,000 x 15 x 22%), and from October 1—22,100 UAH (6,700 x 15 x 22%).
Recall that 22% is the UST rate. The base for its charges are:
- for general system sole proprietors—the amount of income (profit) subject to personal income tax (PIT);
- for single tax sole proprietors—the amount determined by them on their own, but not more than the maximum value of the unified social tax charges base. At the same time, the UST amount cannot be less than the minimum insurance contribution per month.
Calculations show that if a sole proprietor has an employee with a minimum wage of 6,500 UAH, they will get 5,232.5 UAH in hand. The taxes will amount to 1,267.5 UAH. And the sole proprietor will transfer to the state 1,430 UAH in UST for this employee. As a result, the sole proprietor needs to pay 7,930 UAH for this employee.
Sole proprietor taxation in 2022
Fines for violations when using payment transactions recorders (PTR)
Form January 1, it has become mandatory to use payment transactions recorders (PTRs) or software payment transactions recorders (SPTRs) by single tax payers of the 2—4 groups who carry out cash transactions (except for those working in villages). The single tax payers of the 1 group are not required to use PTRs.
For each transaction without fiscalization, the taxpayer will have to pay a fine. The amount of the fine depends on the number of violations:
- the first violation—100% of the check amount;
- the second and subsequent violations—150%.
License fees and court fees
A one-time fee is charged for the issuance of a license in the amount of one subsistence minimum for employable persons, unless another fee is established by law. Thus, this fee is:
- from January 1—2,481 UAH;
- from July 1—2,600 UAH;
- from December 1—2,684 UAH.
The amount of the court fee is established at a multiple of the subsistence minimum for employable persons, established on January 1 of the calendar year the application or complaint is filed with the court in. Therefore, in 2022, the court fee is calculated from 2,481 UAH.
State Labor Service fines
The amount of the fines for violations in the field of labor relations depends on the size of the minimum wage established at the time of detecting the violation. Therefore, from January 1, the fines will be multiples of 6,500 UAH, and from October 1—6,700 UAH.
Fines for the single tax non-payment
The failure to pay or incomplete payment of the advance installments of the single tax before the 20th day of the current month shall result in imposing a fine in the amount of 50% of the single tax rate. In the new year, the amounts are the following:
- 1 group—124.05 UAH;
- 2 group—650 UAH.
Real estate tax
The rural, settlement, and city councils or the councils of the amalgamated territorial communities impose the real estate tax amount for their territory. However, the state limits the rate of this tax—no more than 1.5% of the MW established on January 1 of the reporting (tax) year for 1 square meter.
Changes in tax administration
On January 1, the "resource" law No. 1914 (bill No. 5600) came into force. It imposes a number of changes in tax administration. In particular, sole proprietors are allowed to attribute payments to collective management organizations of property rights to expenditures.
Changes regarding the single tax:
- business entities, whose main activity is the breeding of poultry, ostriches, and quails, are excluded from the number of single tax payers of the 4 group;
- restrictions are imposed for including providers in the 2 group of the single tax (they can be payers of the 3 group or switch to the general taxation system);
- for sole proprietors operating exclusively within the farming, the minimum size of the land area has been reduced for obtaining the right to switch to 4 group of the single tax;
- single tax sole proprietors of the 3 group must keep separate records of the income and expenses from the production and sale of their own agricultural products;
- single tax payers of the 1—3 groups are not exempt from paying land tax if they lease land or real estate located on such plots;
- the income of single tax payers of the 1—3 groups will not include income obtained in the form of compensation for interest rates paid within the framework of the budget program Ensuring the Functioning of the Entrepreneurship Development Fund and the state program for introducing financial and credit mechanisms for providing citizens with housing, as well as funds obtained on an irrevocable basis from the Innovation Development Fund.