Voluntary income declaration for ordinary citizens starts on September 1 in Ukraine. How to show the government your savings and why you need to do it
Tax amnesty laws come into force in Ukraine. From September 1, every Ukrainian can show the state all his savings, earned in an honest or "roundabout" way, and he will get nothing for it. The action is voluntary, so the "stash" can, in principle, not be shown. However, in the case of a large purchase from the tax office, questions may arise about the origin of the money. You will have to pay for the legalization of savings or property: 5% for what is located in Ukraine, and 9% for assets that are stored abroad. However, there is a whole list of exceptions that can be “disclosed” to the state absolutely free of charge.
Why declare savings and property
Voluntary declaration will remove questions about sources of savings / istockphoto.com
For 30 years now, our country has been trying to fight corruption, bribery and payment of wages in envelopes. The struggle is proceeding with varying success: according to statistics of the last year, one fifth of Ukrainians now receive "gray" or "black" salaries. Several years ago, there were many more such workers. As a result, many have succeeded
accumulate under the mattress considerable amounts of money.Objectively, these savings are illegal, because taxes on them have not been paid to the state. So spending them on any large purchase is quite risky: questions may arise from the tax service. For example, you decide to buy an apartment for 700-800 thousand. UAH, and transferred this money to the developer's account. If at the same time you have worked all your life for the "minimum wage", the tax authorities may have reasonable suspicions about the illegal origin of funds.
To legitimize their "illegal" savings, they will need to pay tax on personal income. And this is, for a minute, 18% of the amount. Therefore, the state offers another, more profitable legalization scheme - this is voluntary declaration.
As planned by the authorities, those citizens who, during the year (from September 1, 2021 to September 1, 2022) submit declarations of income and property status, "write off" tax-free "stash" in an amount less 400 thous. hrn. They don't even need to be shown in the declaration. But for more large savings you will need to pay: 5%, if they are kept within the country, and 9%, if they are in the accounts of foreign banks.
What is needed and what not to be indicated in the declaration
You can submit a voluntary return from the comfort of your home / istockphoto.com
You can submit a voluntary tax return in person, at the district Taxpayer Service Center at your place of residence. You can register in the Taxpayer E-Cabinet and submit a document through this service. In addition, the government promises that from September 1, the system of filing declarations will work directly on the website of the State Tax Service (now this page is “temporarily unavailable”).
It is not necessary to indicate in the declaration:
- one or more apartments with a total area of less than 120 sq. m (if you own three apartments of 36 "squares" each, you do not write this in your declaration)
- one or more residential buildings with a total area of no more than 240 sq. m (by analogy with apartments)
- non-residential buildings for non-commercial use with an area of less than 60 sq. m
- land plots (up to 2 hectares for personal farming, up to 0.12 hectares for gardening and from 0.25 to 0.10 hectares as a personal plot)
- one car (or other vehicle) for personal use
- money or any other assets (other than those indicated above), if their total value does not exceed 400 thousand. hryvnias
It is necessary to indicate in the declaration:
- real estate: houses, summer cottages, apartments, non-residential buildings and land plots with an area higher than that which is exempt from declaration
- movable property: cars and other vehicles (if there is more than one), antiques and art objects, gold, jewelry (in excess of 400 thousand. hryvnias)
- cash: precious metals, hryvnia and foreign currency savings, money that you lent to third parties (in excess of 400 thousand. hryvnias)
- other assets or sources of funds: securities, interest and dividends, copyright and corporate rights, any equity participation with the right to a part of the property
How much to pay for legalization of savings
The person calculates the amount of tax on the declaration himself / istockphoto.com
The declarant determines the amount of tax independently, based on the value of his assets and the base rate approved by law. As mentioned above, it is 5% for what is located in Ukraine, and 9% for assets (money, houses, apartments, plots and summer cottages) that are abroad. A separate rate - on government securities (domestic government bonds or government bonds). If a person has such papers, he will need to pay 2.5% of their face value.
An important caveat: the tax is paid one-time. That is, by paying once, you "whiten" your savings and property forever. In the future, the tax service will be able to present all claims to you only about assets that were acquired after a voluntary declaration. Please also note that it is not necessary to indicate the source of origin of your assets in the voluntary declaration. And the information that you considered necessary to indicate in such a declaration is prohibited from using for tax audits and investigations.
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