2% Single Tax Canceled from 1 Aug 2023, A New Sanctions

The Verkhovna Rada Canceled the 2% Single Tax from 1 August 2023: the Law was Adopted as a Whole

On 30.06.2023, the Verkhovna Rada adopted as a whole the law (draft law No. 8401) aimed at returning tax legislation to the pre-war state.
Among other things, the law abolishes the single tax at 2% income rate, starting from 01.08.2023.

The payer of 2% single tax will have the right to submit an application for refusal to apply the 2% single tax and indicate in such an application, which taxation system he wishes to switch to. Without submitting such an application, as well as without specifying the desired taxation system in it, the payer will automatically be transferred to the system on which he was before the election of the 2% single tax.

Newly created legal entities, which have chosen 2% single tax from the day of state registration, will automatically be considered as single tax payers of group III with a rate of 5%.

In addition, the law also provides for:

• automatic restoration of the rights and obligations of the VAT payer for those legal entities, whose registration as a VAT payer has been suspended;
• partial cancellation of the moratorium on inspections for excise goods, gambling business and financial services from 01.08.2023;
  restoration of the application of fines for violation of tax legislation, correctness of accrual, calculation and payment of single social contribution;
• cancellation of the provision, which provides for exemption from liability for violations in the field of application of registrars of settlement operations from 01.10.2023. At the same time, this provision continues to apply in relation to violations committed in the front-line territories, including territories of possible hostilities (except during trade in excise goods);
• preservation of the right of voluntarily payment of single tax and single social contribution in the front-line territories, including territories of possible hostilities;
• the possibility for individual entrepreneurs, who are single tax payers without VAT, to indicate the names of goods (services) in a simplified form in settlement documents.

As noted by the Ministry of Finance, the approval of such a law will ensure that Ukraine fulfills its obligations under the Memorandum on Economic and Financial Policy dated 08.12.2022.

Currently, the Law is pending on to be sent to the President of Ukraine for signature. If the law is signed by the President, it will enter into force on 01.08.2023.

The President Signed Another Decree on the Imposing of Sanctions

On 01.07.2023, the Decree of the President of Ukraine No. 364/2023 put into force the decision of the NSDC dated 01.07.2023 “On the application and introduction of changes to personal special economic and other restrictive measures (sanctions)”.