Court Cancels Tax Authority's Demand for Payment of Over UAH 37,000 in Single Social Contribution from Former Sole Proprietor
A former sole proprietor successfully challenged, through the courts, the tax authority's demand to pay over 37,000 hryvnias in debt for the single social contribution (SSC). The tax authority attempted to appeal the decision, but the appellate court upheld it, and the Supreme Court refused to open cassation proceedings.
According to the free legal aid system, the man registered as a sole proprietor in 2000. However, after the Law "On State Registration of Legal Entities, Sole Proprietors and Public Formations" came into force in 2004, he did not contact the state registrar to include his details in the Unified State Register or to replace his state registration certificate.
The free legal aid system explained that, as a result, he effectively lost the right to conduct entrepreneurial activity and therefore had no obligation to pay SSC as a sole proprietor.
"That is, effectively since 2004, he had no right to engage in entrepreneurial activity, and therefore had no obligation to pay SSC," the lawyers noted.
Despite this, in 2021, the tax authority sent the man a demand to pay over 37,000 hryvnias of SSC debt. The State Tax Service based this on the fact that, following legislative changes in 2017, sole proprietors are obliged to pay SSC regardless of income received.
Disagreeing with these charges, the man sought legal advice.
His lawyer filed a lawsuit to have the tax authority's demand declared unlawful and cancelled.
The court of first instance fully upheld the claim. The tax authority appealed this decision, but the appellate court left it unchanged, and the cassation court refused to open cassation proceedings. Consequently, the decision became legally binding.
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