Unified report on personal income tax and ERUs

In September, the Verkhovna Rada adopted two laws, which from January 1, 2021 introduced a new combined reporting on ERUs and personal income tax. From this date, the FLP will submit to the tax general report, which reflects the amount of income, as well as the amount of accrued ERUs and withheld personal income tax.

We are talking about combining a quarterly report in the form of No. 1DF, tax returns of the general system specialist and the unified agent and reports on ERUs: Appendix 4 for employers and Appendix 5 for FLP.

They promised to combine the two reports a long time ago, but only now, as part of the tax reform, the above laws have been adopted. This will allow entrepreneurs to submit fewer reports, which in turn will reduce the number of fines for errors in filling out and / or late submission. In addition, combining these reports is not difficult, since most often the base for ERUs in the form of wages and remuneration for the performance of work (provision of services) under civil law contracts coincides with the base for calculating and withholding personal income tax.

The adoption of these laws is useful for both the FLP and the supervisors, since for the former, the number of reports is reduced, and for the latter, administration is reduced.

It should be noted that the Ministry of Finance has a whole 2020 to develop and approve new reporting forms. Namely, a new form of declaration for single tax payers, a general system declaration and a report for the employer. What it will be called is still unknown. But now they promise that they will remove all unnecessary items from the forms, thereby simplifying their filling.

In conclusion, we note that for FLP the reporting period does not change, they will continue to report once a year, according to the results of the year. But the information on the accrued and paid ERUs will be reflected in the corresponding declaration of the system-wide or single manager.

But entrepreneurs-employers will report quarterly by month. There will be no monthly reporting on ERUs. Soon, laws should also appear that will introduce the payment of tax in one amount to one account.