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Fiscalization of sole proprietors: Expectations of 2022

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Sole proprietors will be required to use PTRs. Photo: State Tax Service

Sole proprietors will be required to use PTRs. Photo: State Tax Service

From January 1, 2022, in Ukraine, all natural persons-entrepreneurs (sole proprietors) of categories 2-4 are required to use cash registers (payment transactions recorders, PTR) in their work. The exceptions are the sole proprietors of the first category and those working with businesses (without carrying out settlement transactions).

At the same time, the responsibility for violations in the use of cash registers is strengthened.

The Page reports what is happening with the fiscalization of entrepreneurs in Ukraine now, why the state is striving for 100 percent fiscalization, and what consequences for the sole proprietorship the mandatory use of cash registers will lead to.

Responsibility for violations in the PTR field

Sole proprietors can use "physical" PTRs or software ones (SPTR).

PTR (payment transactions recorders) is a traditional cash register or fiscal printer.

SPTR (software payment transactions recorders) is a program or application installed on a smartphone or tablet. To fiscalize the check, such a PTR must connect to the tax service server where the checks are stored.

Until January 1, 2022, reduced fines for violations when using PTR are applied:

  • 10% of the cost of goods (works, or services) in the case of the first violation;
  • 50%—for each subsequent violation.

From January 1, liability will be applied to entrepreneurs, during the inspections of whom it will be established that operations are carried out without using a cash PTR, in the following amounts:

  • 100% of the cost of goods (works, or services) in the case of the first violation;
  • 150%—for each repeated violation.

What is the current process of fiscalization

According to Danylo Getmantsev, the Head of the Committee on Finance of the Verkhovna Rada, since the beginning of the year, the number of registered PTR and SPTR has increased in Ukraine by 95,000 (by 27%).

During this period, the number of PTR/SPTR registered by the sole proprietors who are payers of the single tax increased by 66%. The high dynamics of the PTR/SPTR registration (by 150%) was shown by risk groups of sole proprietors, single tax payers.

The total number of the PTR/SPTR in Ukraine as of November 1 was 446,000.

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What will 100 percent fiscalization bring to the state

According to Tetiana Sheremet, a tax expert at Accountor Ukraine, the experience of developed countries that have implemented the relevant reforms shows a positive trend in the economy unshadowing. This is primarily due to the fact that it will be almost impossible to hide or fictitiously reduce revenue, since all data is automatically and fully transferred to the fiscal service.

The mandatory use of cash registers will lead to increased control by the state and will stimulate entrepreneurs to stricter tax discipline. The consequence of this may be an increase in budget revenues.

"Among the European states, one can find examples of successful implementation of PTR (SPTR) in Sweden and Georgia, that is closer to us. There, the introduction of cash registers has led to a decrease in the number of entrepreneurs working in the "shadow", an increase in jobs and average salaries. The combination of efforts of entrepreneurs and the state can give the same results in Ukraine," Denys Shevchuk, a lawyer at the company VOLKhV, believes.

What will 100% fiscalization bring to business:

  • reduced opportunities for tax optimization;
  • additional costs for the purchase and maintenance of the PTRs, the cost of purchasing a smartphone or tablet necessary for the installation and use of SPTRs, as well as a monthly subscription fee (in the case of installing paid programs for SPTRs);
  • tightening tax control;
  • penalties for violations in the PTR field.

Oleksandr Khmelevskyi, Ph.D. in Economics, believes that forcing sole proprietors to use PTRs will affect buyers and lead to an increase in prices for goods. Sole proprietors can include all expenses for cash registers and their maintenance, as well as the amount of taxes paid, in the price of their goods and services.

"Authorities seek to fill the budget at any cost, not understanding what economic consequences this will lead to. It is possible that by introducing cash registers, the state will receive less income than before their introduction. Many entrepreneurs can completely curtail their activities, or go into the "shadows". Therefore, it is unlikely that the use of cash registers in the current conditions will lead to the economy unshadowing, but rather vice versa," Khmelevskyi notes.

Recall that some categories of sole proprietors are obliged to use cash registers from the beginning of 2021. These are the entrepreneurs that:

  • provide intermediary services in the field of real estate;
  • sell jewelry, medicines, and medical products;
  • sell technically sophisticated household appliances subject to warranty repair

and others

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