Tax benefits for individual entrepreneurs and legal entities during the war

On March 17, the Law of Ukraine "On Amendments to the Tax Code and Other Legislative Acts Regarding the Validity of Provisions for the Period of Martial Law" came into force. The Law provides for tax benefits for the period of martial law and the state of emergency for individual entrepreneurs and legal entities:

• Transactions on transfer, release, shipment of fuel by way of compulsory alienation or confiscation of such fuel in favor of the state, the Armed Forces, territorial defense, the National Guard, the Security Service of Ukraine and others, provision of fuel as humanitarian aid, provided that the owner of such fuel does not take measures to compensate for the cost of such fuel in the future, are not considered to be fuel sales and are not subject to taxation. The cost of such fuel is exempt from excise tax.
• Regulatory authorities have the right to conduct actual checks to ensure that customers can pay with a bank card. In other words, sellers are obliged to accept payments not only in cash but also by electronic means. Violation of this rule is punishable by a fine of UAH 8,500.
• No fine is imposed for violations that occurred during martial law.
• Income tax is not levied on charitable aid and untargeted charitable aid paid to combatants, persons residing in the territory of hostilities, temporarily displaced persons and persons affected by military operations and armed aggression of the Russian Federation.
• No penalty will be charged to the budget for late VAT refunds if such arrears arose as a result of force majeure due to the introduction of martial law.
• No tax liability arises if excusable goods are provided for the needs of the state, the Armed Forces of Ukraine, territorial defense, the National Guard, the Security Service of Ukraine and others, or are provided as humanitarian aid, provided that the owner of such goods will not take measures to compensate for the value of such excisable goods in the future.
• When receiving a tax rebate for 2022, the tax rebate will include the amount of funds or the value of property transferred or donated to non-profit and charitable organizations. The tax rebate will be 16% (currently 4%).
• Persons engaged in independent professional activities may include in their expenses the cost of property or funds voluntarily transferred by them in favor of the state, the Armed Forces, territorial defense, the National Guard, the Security Service of Ukraine and others, subject to documentary evidence.
• Goods that were destroyed during the war or transferred to the state or other persons for the needs of Ukraine's defense are exempt from VAT.
• The tax credit can include VAT amounts for which the supplier has not yet registered a tax invoice based on primary documents. After the end of martial law, such invoices must be registered within 6 months.
• For the period of martial law, a 0% excise tax rate and a 7% VAT rate on fuel are introduced. The amounts of negative tax credit are not subject to budgetary reimbursement, but may be included in the tax credit of the next period.
• Starting from April 1, 2022 and until the end of martial law, individual entrepreneurs of the 1st and 2nd groups of the single tax are exempt from paying the single tax, i.e. payment for this period is voluntary. When filling out the single tax return for the period for which the single tax was not paid 一 the columns are left blank.
• Individual entrepreneurs and legal entities of any form of ownership with an annual income of up to UAH 10 billion can pay the group 3 single tax. There are no restrictions on the number of persons who may be in an employment relationship.
• Business entities engaged in the organization of gambling, lotteries, bookmaking, currency exchange, production, sale of excisable goods, insurance companies, banks, pawnshops, etc. cannot be single tax payers of the 3rd group.
• For single tax payers of the 3rd group, the rate is set at 2% of income. The reporting period remains a quarter.
• After the end of martial law, taxpayers who have switched to the simplified taxation system will be automatically returned to the taxation system they were under before the war.
• During martial law, tax audits that have been initiated are suspended and new audits are not initiated, except for desk audits of declarations or clarifying calculations to which an application for budgetary reimbursement is attached, and actual audits of the above declarations or clarifying calculations.
• From March 1 to December 31, 2022, no land payment is charged or paid for land plots located in the territory of hostilities and temporarily occupied territories. The list of such territories is determined by the CMU.
• In 2022 and 2023, the minimum tax liability for land plots located in the territory of hostilities and temporarily occupied territory will not be accrued and paid.
• In 2022, the environmental tax will not be charged or paid for facilities located in the territory of hostilities and temporarily occupied territories.
• For banks, financial institutions and regulatory authorities, the deadlines for sending notifications on opening and closing accounts are suspended for the period of martial law.
• During the period of martial law, the schedule for the provision of electronic services and acceptance of electronic documents from taxpayers is from 8:00 a.m. to 6:00 p.m. on business days.
• If it is not possible to purchase excise tax stamps of the standard form, the import and sale of tobacco products without the standard form of labeling, but with labeling in accordance with EU requirements, is temporarily allowed for the period of martial law.
• For the period from February 24, 2022, until the end of martial law plus thirty days after it ends, borrowers who have taken out consumer loans are exempt from paying penalties and fines for late payments.
• For the duration of martial law and for 30 days after its termination, it is prohibited to foreclose on collateral and evict tenants.
• Licenses for the right to trade and produce alcohol, ethyl alcohol, tobacco products and licenses for the right to trade, produce and store fuel for which the next payment has not been made or which have expired are considered valid until the end of martial law. Such licenses must be renewed within 30 days after the end of martial law.
• During the period of martial law, you can make offline sales through cash registers beyond the established deadlines.
• From March 1, 2022, until the end of martial law and for another 12 months thereafter, sole proprietors have the right not to pay a single social contribution for themselves.
• Starting from February 24, 2022, employers may not pay a single social contribution for mobilized employees. Such amounts will be paid from the budget.
• Fines and penalties for non-payment of the unified social contribution are not charged during the period of martial law and for 3 months after its termination. No audits are conducted.

No fine is imposed for violations that occurred during martial law.