Key Documents for Entrepreneurs on the Simplified Tax System
Attorney Bohdan Yankiv has outlined six critical documents that entrepreneurs operating under Ukraine's simplified tax system must file with the State Tax Service (STS) to avoid audits, financial penalties, and potential losses. He presented this guidance on his YouTube channel, 'YANKIV – FOP, Taxes, and Courts.' For context, the simplified tax system in Ukraine is a popular regime for small businesses and sole proprietors, known as FOPs.
The list of essential filings includes:
- An extract for the single tax payer,
- An application to exchange electronic documents,
- A reference report,
- Form 20-OPP,
- A request for income (an income certificate),
- An application for leave.
Yankiv emphasized that most of these documents can be submitted online via the taxpayer's electronic cabinet, significantly streamlining the process.
He warned that neglecting to file Form 20-OPP could result in a fine of 340 hryvnias. The attorney also reminded entrepreneurs that those in the 1st and 2nd groups who operate without hired employees are entitled to an annual leave lasting one month.
“Two clicks each quarter are the guarantee of safety for all FOPs on the simplified system,” stated Bohdan Yankiv.
However, he advised against filing the application for electronic document exchange if an entrepreneur is engaged in a dispute with the tax authorities and their defense strategy relies on physical, rather than digital, correspondence, cautioning, “you'd be better off not submitting this application.” Following these recommendations can help business owners avoid negative consequences in their operations.
This guidance is crucial for entrepreneurs as it helps mitigate risks related to tax audits and fines. With the increasing digitization of administrative processes, the ability to file documents online greatly simplifies interaction with tax authorities, which can positively impact business management and overall economic activity.