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trHow is the average number of employees determined for a taxpayer that started operating in the middle of the year?
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How is the average number of employees determined for a taxpayer that started operating in the middle of the year?
If a legal entity was registered in the 8th month of the year and started its activities with 3 employees, can it benefit from the 75% tax exemption? Since it operated for only 5 months by the end of the year, should the average number of employees be divided by 12 or by 5?
The State Tax Service under the Ministry of Economy stated that, pursuant to Article 106.1.20 of the Tax Code, legal entities classified as micro-entrepreneurship entities, having an average monthly number of hired employees of at least 3 during the relevant year and having no outstanding mandatory state social insurance contributions, are entitled to a 75% tax exemption on income derived from entrepreneurial activities.
The average monthly number of hired employees for the relevant year is generally determined by adding up the number of employees during the calendar year and dividing the total by 12.
However, for the purposes of applying Articles 102.1.30 and 106.1.20 of the Tax Code, the average monthly number of hired employees is determined based on the actual period of activity.
Therefore, for an enterprise registered in the 8th month (August) and operating for 5 months, the total number of employees is divided not by 12, but by 5.
If a legal entity was registered in the 8th month of the year and started its activities with 3 employees, can it benefit from the 75% tax exemption? Since it operated for only 5 months by the end of the year, should the average number of employees be divided by 12 or by 5?
The State Tax Service under the Ministry of Economy stated that, pursuant to Article 106.1.20 of the Tax Code, legal entities classified as micro-entrepreneurship entities, having an average monthly number of hired employees of at least 3 during the relevant year and having no outstanding mandatory state social insurance contributions, are entitled to a 75% tax exemption on income derived from entrepreneurial activities.
The average monthly number of hired employees for the relevant year is generally determined by adding up the number of employees during the calendar year and dividing the total by 12.
However, for the purposes of applying Articles 102.1.30 and 106.1.20 of the Tax Code, the average monthly number of hired employees is determined based on the actual period of activity.
Therefore, for an enterprise registered in the 8th month (August) and operating for 5 months, the total number of employees is divided not by 12, but by 5.