Complainee: The Main Department of the State Tax Service in Odesa Oblast (the “MD STS”)
Complaint in brief: The Business Ombudsman Council received a complaint from a private entrepreneur from Odesa. At the time of her appeal to the Council, the complainant had already ceased her business activities and in August 2020 tried to obtain a write-off of the accrued single contribution for periods when she had not received any income from her business activity. For this purpose, according to the procedure established by the para. 9-15 of Section VIII of the Law of Ukraine “On Collection and Accounting of the Single Contribution for Compulsory State Social Insurance System” (the “Law”), the woman submitted a completed report on the single contribution and a respective application for writing off arrears. However, as a result of the audit, tax authorities refused to write off the debt due to the fact that she had allegedly received income in the specified period, having recorded this information in the single contribution reports. This position of the tax authority was justified by the fact that in the submitted reports the complainant had herself determined the basis for accrual of a single contribution at the minimum level, and did not put dashes in the relevant space.
Therefore, according to the MD STS position, self-determined amounts of the single contribution are payable on a general basis. Thus, the total debt of the complainant amounted to UAH 24k. In an attempt to help the private entrepreneur, the Council launched an investigation.
Actions taken: The Council’s investigator found the complaint to be substantiated. In view of the re-announcement of the campaign on writing off arrears on the single contribution for “dormant” private entrepreneurs in December 2020, the Council upheld the entrepreneur’s position and recommended that MD STS reconsider the possibility of writing off the debt in her situation. The Council backed up its position by official letters of the State Tax Service of Ukraine, which, firstly, stated that the formal displaying of the income amount for which a single contribution is accrued, cannot be the ground for refusal to write off arrears, penalties and fines in accordance with para. 9-15 of Section VIII of the Law; secondly, the example of filling in reports on the single contribution in case of non-receipt of any income (profit) was given.
Therefore, in the Council’s view, the complainant prepared its reports in accordance with the methodology provided by the current legislation, and the fact that they determine the formal amount of income for which a single contribution is accrued, in this case cannot be the only and due reason for refusing to write off arrears, penalties and fines.
Result achieved: With the Council’s facilitation, having considered the complainant’s repeated application for write-off of arrears on the single contribution, penalties and fines, the MD STS took the above arguments into account and wrote off the debt accrued to her since 2018. The case was successfully resolved.
12.07.2021