In September 2019, the Verkhovna Rada of Ukraine passed two resonant laws that established a new procedure for the use of cash registrars in the field of small business, for instance:

On amendments to the Law of Ukraine «On the use of cash registrars in trade, catering and services» and other laws of Ukraine on de-shading settlements in the sphere of trade and services» (№ 128-ІХ);

On amendments to the Tax Code of Ukraine on de-shading settlements in the sphere of trade and services (№ 129-ІХ).

Both Laws provided for a number of important changes in the scope of cash registrars, including:

  • introduction of software cash registrars in the form of free software that can be installed on a smartphone, tablet or computer;
  • introduction of a cash-back system, designed for consumer who made a purchase in excess of 850 UAH and received a check could verify the availability of a settlement document in the electronic system of the State Tax Service through the Electronic Cabinet. In his absence, the buyer can write a complaint to the seller to the regulatory authorities, which will be the basis for the inspection;
  • the increase in the amount of fines for violation of the rules of settlement operations;
  • introduction of phased mandatory use of cash registrars by entrepreneurs who are on the simplified taxation system.

The new provisions were expected to enter into force from 19.04.2020, and the rule on the mandatory use of cash registrars by all entrepreneurs who are on the simplified taxation system, regardless of income and type of activity - from 01.01.2021.

However, the introduction of quarantine made adjustments to the legislator's plans, so all deadlines related to the new rules of application of cash registrars were extended.

Thus, the norm on cash-back were expected to enter into force from 01.01.2021. From the same date, the mandatory use of cash registrars was introduced not for all simplifiers, as originally envisaged, but only for those who, regardless of the amount of income carries out:

  • sale of goods (provision of services) online;
  • sale of technically complex household goods subject to warranty repair;
  • sales of medicines, medical devices and the provision of paid services in the field of health care;
  • sale of jewelry and household products made of precious metals, precious stones, precious stones of organogenic formation and semi-precious stones;
  • retail sale of second-hand goods in stores;
  • activities of restaurants, cafes, fast food restaurants;
  • activities of travel agencies, tour operators;
  • activities of hotels and similar temporary accommodation services (group 55.10 Code of economic activity);
  • sale of textiles (except for cash sales on the markets), parts and accessories for motor vehicles in accordance with the list approved by the Cabinet of Ministers of Ukraine.

For other single tax payers of groups II-IV, the application of cash registrars would be mandatory from April 1, 2021.

However, the long quarantine and its extension until the end of 2020 changed the situation with the use of cash registrars. On December 1, 2020, the Verkhovna Rada of Ukraine adopted the Law "On amendments to the Tax Code of Ukraine and other laws of Ukraine on liberalization of the use of cash registrars by single taxpayers and abolition of compensation to buyers (consumers) of a part of the sum of the applied penalties for complaints about violation of the established procedure for settlement operations.

What does this mean for business?

First, the law changed the income limits for entrepreneurs on the simplified taxation system. They will be determined depending on the size of the minimum wage (MW), which potentially will be 6,000 UAH from 01.01.2021.

Therefore, the annual amount of income for entrepreneurs that are on the simplified taxation system, starting from January 1 may not exceed:

  • for the first group - 167 MW (1 002 000 UAN);
  • for the second group - 834 MW (5 004 000 UAN);
  • for the third group - 1167 MW (7 002 000 UAN).

Second, the mandatory use of cash registrars for NPE of groups II-IV had been postponed until January 1, 2022. At the same time, the annual income of entrepreneurs who do not use cash registrars may not exceed 220 minimum wage (1,320,000 UAH).

At the same time, cash registrars should NPE operating in areas with significant risks of tax evasion, the list of which has been significantly reduced:

  • sale of technically complex household goods subject to warranty repair;
  • sales of medicines, medical devices and the provision of paid services in the field of health care;
  • sale of jewelry and household products made of precious metals, precious stones, precious stones of organogenic formation and semi-precious stones;

Third,
the law abolishes a cash-back system for consumer complaints about violations of the procedure for applying cash registrars. Liability for non-compliance of cash at the place of settlement of the amount of funds specified in the daily report of cash registrars and for lack of prior programming of goods in cash registrars will be also abolished.

Fourth, the law provides that until January 1, 2022, a reduced amount of sanctions will be applied for violating the requirements of the law on the use of cash registrars. Thus, for a violation committed for the first time, you must pay a fine of 10% of the value of goods (works, services) sold with violations, and for each subsequent violation - 50% of the value of such goods (works, services).

In addition, the law has expanded the list of cases in which the use of cash registrars is not required, in particular in the case of settlements for remote services, if they are carried out exclusively through remote banking systems and / or money transfer services.

Postponing the obligation to use cash registrars for another year allows small business to catch their breath and prepare for all possible challenges next year, including the fact that the pandemic situation remains unstable and unpredictable.

08 DECEMBER 2020

By: Anastasiia Popilevych
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