White business club law: main benefits for entrepreneurs

The Verkhovna Rada has adopted the «White Business Club Law» №11084, which provides certain benefits to entrepreneurs who diligently pay taxes.

What new measures does this law introduce and how will it affect sole proprietorships?

The Essence of the White Business Club Law

The document stipulates the abolition of tax control in the form of inspections for those sole proprietorships that conduct their business transparently, pay taxes on time and in full, and have no deficiencies in their accounting documentation.

However, there are exceptions to which certain provisions of the law do not apply. These include manufacturers and sellers of excisable goods, casino organizers and gambling business owners, as well as entrepreneurs providing payment and financial services.

All participants of the White Business Club will be included in a list. The document will be published on the official website of the State Tax Service. Data on participating entrepreneurs will be updated regularly, every three months. An entrepreneur included in the list will be informed of their status through their personal electronic cabinet on the tax service website.

What Criteria Must an Entrepreneur Meet to Be Included in the List?

To be included in the «white» tax list, an entrepreneur must meet the following requirements:

• No outstanding social security contributions;

• The amount of tax debt should not exceed 3000 non-taxable minimum incomes, which is 51,000 UAH;

• No violations regarding the submission of reports to the State Tax Service;

• No notifications from the tax service regarding overdue payments to clients in the past year;

• No ongoing procedures for terminating business activities as a sole proprietorship or legal entity;

• No bankruptcy proceedings;

• No ties with the aggressor country (RF);

• Stability of business activities, no changes in types of economic activities in the past year;

• No economic sanctions, etc.

Additionally, the State Tax Service sets further criteria depending on the entrepreneur's form of taxation.

Advantages for Sole Proprietorships - Members of the Club

Sole proprietorships included in the White Business Club members list will enjoy several advantages:

1. Receiving individual tax consultations: club members can receive IPCs from tax authorities in a short period.

2. Reduction of document inspections.

3. Shortening the duration of inspections: documentary and desk audits will be conducted as quickly as possible.

4. Ability to reserve conscripts in the amount of no more than 25%.

Creation of the Position of «Compliance Manager»

The law provides for the creation of a new position – compliance manager. This is an official authorized to work directly with entrepreneurs. They will be assigned to each of them and will be able to interact with them remotely.

The responsibilities of such a person include:

1. Analysis of tax risks: studying the financial activities and reporting documentation of enterprises to identify potential tax risks.

2. Risk reduction: analysis and application of measures to reduce tax risks.

3. Prevention of violations: development of plans, consultations, and recommendations to comply with tax laws.

4. Support for entrepreneurs and providing consultations on tax-related issues.

Thus, the new law encourages fair and transparent business practices, motivating entrepreneurs to comply with tax legislation. Most importantly, sole proprietorships and legal entities receive strong support from the State Tax Service in the form of benefits.