Transfer or new employment: in which cases it is necessary to notify the State Tax Service

Employers often face the question of whether it is necessary to submit a notification to the State Tax Service in case of transferring an employee to another position. In practice, confusion often arises between transfer and hiring, which can lead to unnecessary actions as well as errors in personnel document processing.

Experts emphasize: the obligation to notify the tax authority arises only in cases where new labor relations arise between the employee and the employer. If the employee continues to work for the same employer and only their position or working conditions change, there is no need to submit a notification to the State Tax Service.

When a notification of hiring is submitted

According to part three of article 24 of the Labor Code of Ukraine, an employee cannot be admitted to work without concluding an employment contract, issuing the appropriate order or directive of the employer, and notifying the tax authority about the hiring.

The procedure for submitting such notification is approved by the Cabinet of Ministers of Ukraine resolution dated June 17, 2015, No. 413.

The main purpose of the notification is to inform the state about the emergence of new labor relations between the employee and the employer.

What is considered a transfer

A transfer is a change in the employee's labor function or other significant working conditions within the already existing labor relations.

In particular, this refers to cases when:

• an accountant is transferred to the position of chief accountant;
• a personnel inspector is appointed head of the personnel department;
• an employee is transferred to another structural unit of the enterprise;
• an employee, with their consent, moves to another permanent job within the same enterprise.

In such situations, labor relations are not terminated, the employee is not dismissed, but simply continues to work under new conditions.

Why notification to the State Tax Service is not required

During a transfer, no new labor relations arise between the parties.

The employee is already on the enterprise's staff, therefore:

• the current employment contract is not terminated;
• a new employment contract is not concluded;
• the employee is not rehired.

That is why the legislation does not provide for the obligation to submit a notification to the State Tax Service in case of an internal transfer of an employee.

Which documents need to be prepared

The absence of the need to notify the tax service does not exempt the employer from the obligation to properly document personnel changes.

Depending on the specific situation, the following may be required:

• employee's application;
• written consent to the transfer;
• transfer order;
• amendments to the personal card;
• updating staffing and personnel documentation;
• an additional agreement to the employment contract if changes in working conditions require it.

These documents confirm the legality of the transfer carried out.

When notification still needs to be submitted

Employers should consider that some personnel situations may look like a transfer but are actually new hiring.

Notification to the State Tax Service is mandatory if:

• the employee was dismissed and then rehired;
• the employee is hired part-time under a separate employment contract;
• a new employment contract is concluded after termination of the previous one;
• the employee transfers to another employer by way of transfer.

In the last case, the new employer is obliged to submit a notification to the State Tax Service, as for them it is already a new employment of the employee.

Common employer mistakes

Experts draw attention to a number of common mistakes when processing personnel changes.

In particular, employers often:

• submit notifications to the State Tax Service during internal transfers, although the law does not require this;
• process dismissal and rehire instead of transfer;
• do not issue a transfer order;
• confuse the concepts of transfer and relocation of an employee.

Such mistakes can create additional risks during inspections and personnel audits.

Practical example

An employee holds the position of leading specialist. From July 1, they are transferred to the position of department head.

To formalize the changes, the employer issues a transfer order and makes the necessary corrections to personnel documents.

In this situation:

• no notification to the State Tax Service is submitted;
• labor relations continue without interruption;
• a new employment contract is not concluded.

Transferring an employee to another position within the same employer is not considered hiring and therefore does not require submitting a notification to the State Tax Service.

The obligation to notify the tax authority arises only when new labor relations are created or a new employment contract is concluded. Therefore, it is important for employers to correctly distinguish between transfer and hiring and properly document all personnel changes.

Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp, Facebook page and Instagram to stay informed about the most important events.