SMART taxation: easy reporting for sole proprietorships
19.12.2022 14:04
Individual entrepreneurs of the 3rd group will be able to submit reports and pay mandatory taxes through tax agent banks. This is stated in the draft law No. 8226 of November 24, 2022, registered by MP Yaroslav Zheleznyak. How will the taxation system for private entrepreneurs change?
SMART rules for private entrepreneurs
If the draft law is approved by the Verkhovna Rada, for individual entrepreneurs of the 3rd group who are on the simplified taxation system, both reporting and tax payment will be automatic, without their intervention. To do this, entrepreneurs need to register a relationship with an agent bank and open a special bank account.
Who can use the smart service?
The draft law No. 8226 applies to entrepreneurs - "simplified" of the 3rd group, who:
- are not VAT payers,
- do not have employees,
- receive only non-cash income,
- comply with annual income limits, which are set at UAH 7,818,900.
The new SMART-FOP system provides for the following changes:
- Entrepreneurs do not have to submit quarterly income tax returns to the tax office - the bank will do it instead.
- Taxes - a single tax of 5% for non-VAT payers, as well as the minimum unified social contribution - will be deducted and debited from the account of the sole proprietor automatically by the bank.
- Contacts of individual entrepreneurs with the tax authorities will be minimized, and there will be no need for accounting expenses,
- There will be no need to control the scheduled payments according to the tax calendar - payments of individual entrepreneurs will become almost invisible.
Thus, entrepreneurs will avoid interaction with the state and mistakes made in the preparation of tax reports, which happens quite often.
How to choose the simplified taxation system?
To switch to the SMART taxation system, sole proprietors need to:
1. Apply for registration as an individual entrepreneur of the 3rd group with a tax agent bank,
2. Open a special bank account.
The draft law has already been supported by the Ministry of Digital Transformation and its head Mykhailo Fedorov. According to him, it will be possible to apply for registration of a sole proprietorship under the new system in the Diia application.
It should be reminded that currently, sole proprietors registered as simplified taxpayers of the 3rd group pay 5% income tax, unified social tax and report to the tax authorities on their own: they submit income tax returns four times a year and once on the unified social tax paid.
With the entry into force of the new draft law, it is expected to significantly simplify the procedure for maintaining and submitting reports by entrepreneurs, as well as automate the payment of taxes to the tax authorities, without the human factor.
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