Can a Sole Proprietor Who Subleases Premises Apply to the Second Group of Single Taxpayers?
The Main Department of the State Tax Service in the Dnipropetrovsk region has clarified whether a sole proprietor who subleases residential and/or non-residential premises is eligible to apply the second group of single tax payers.
The conditions for sole proprietors to apply the simplified taxation, accounting, and reporting system within specific groups of single tax payers are outlined in paragraph 291.4 of Article 291 of the Tax Code of Ukraine.
Accordingly, the second group of single tax payers comprises sole proprietors engaged in economic activities such as providing services (including household services) to single tax payers and/or the general public, producing and/or selling goods, or operating within the restaurant sector. Eligibility for this group is contingent upon meeting the following criteria throughout the calendar year:
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They either do not employ hired workers or the number of persons employed simultaneously does not exceed 10.
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Their income volume does not exceed 834 times the minimum wage established by law as of 1 January of the tax (reporting) year.
Paragraph 291.5 of Article 291 of the Tax Code of Ukraine specifies the types of activities and conditions that preclude business entities from being single tax payers of the first to third groups.
Specifically, sole proprietors who lease land plots with a total area exceeding 0.2 hectares, residential premises and/or parts thereof with a total area exceeding 400 square metres, or non-residential premises (structures, buildings) and/or parts thereof with a total area exceeding 900 square metres cannot be single tax payers of the first to third groups (subparagraph 291.5.3 of paragraph 291.5 of Article 291 of the Tax Code of Ukraine).
The tax authorities concluded: "Therefore, a sole proprietor who subleases residential premises up to 400 square metres (inclusive) and/or non-residential premises up to 900 square metres (inclusive) is entitled to apply the second group of single tax payers, provided that such premises are subleased to single tax payers and/or the general public."
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