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Can an individual engaged in the sale of souvenirs and gold products qualify as a simplified tax taxpayer?
Can an individual engaged in the sale of souvenirs and gold products qualify as a simplified tax taxpayer?
An individual is engaged in the retail sale of souvenirs and gold products. If these activities are carried out by the same taxpayer, how should the individual's tax obligations be determined? Can the individual be a simplified tax payer, or must they operate as a personal income tax payer?
According to the State Tax Service under the Ministry of Economy, the activity described in the inquiry is considered entrepreneurial activity. Pursuant to Article 33.4 of the Tax Code, an individual conducting entrepreneurial activity without establishing a legal entity must register with the tax authorities (obtain a TIN) before commencing operations and pay taxes on the income earned to the state budget.
Tax obligations are determined based on the taxation system selected during registration and the applicable taxable objects, and may include the relevant taxes (simplified tax or personal income tax, as well as VAT). If the individual chooses the simplified taxation system, a simplified tax at the rate of 2% is calculated and paid on revenues (gross receipts) derived from trading activities without deducting expenses. If the activity is carried out as a personal income tax payer, income tax at the rate of 20% is calculated and paid on the amount remaining after deducting expenses incurred in generating the income.
It should also be noted that, under Article 102.1.30 of the Tax Code, a 75% tax exemption applies to the business income of individual entrepreneurs classified as micro-entrepreneurs, provided that the average monthly number of employees during the relevant year is not less than three and there are no outstanding mandatory state social insurance liabilities. The average monthly number of employees is determined by dividing the total number of employees throughout the calendar year by twelve.
Furthermore, in response to the inquiry, it was stated that under Article 218.5.11 of the Tax Code, persons engaged in the sale of gold, jewellery and other household items made from gold, as well as diamonds (whether processed, graded, mounted and set, or unprocessed, ungraded, unmounted and unset), are not entitled to be simplified tax payers. Therefore, individuals engaged in the sale of gold and other jewellery products are registered as personal income tax payers.
For more detailed information on tax registration procedures and the steps required depending on the specifics of your activity, you may consult the “Tax Guide” section on the official website of the State Tax Service. If you have additional questions, you may contact the Call Centre (195-1) or visit taxpayer service centres.
An individual is engaged in the retail sale of souvenirs and gold products. If these activities are carried out by the same taxpayer, how should the individual's tax obligations be determined? Can the individual be a simplified tax payer, or must they operate as a personal income tax payer?
According to the State Tax Service under the Ministry of Economy, the activity described in the inquiry is considered entrepreneurial activity. Pursuant to Article 33.4 of the Tax Code, an individual conducting entrepreneurial activity without establishing a legal entity must register with the tax authorities (obtain a TIN) before commencing operations and pay taxes on the income earned to the state budget.
Tax obligations are determined based on the taxation system selected during registration and the applicable taxable objects, and may include the relevant taxes (simplified tax or personal income tax, as well as VAT). If the individual chooses the simplified taxation system, a simplified tax at the rate of 2% is calculated and paid on revenues (gross receipts) derived from trading activities without deducting expenses. If the activity is carried out as a personal income tax payer, income tax at the rate of 20% is calculated and paid on the amount remaining after deducting expenses incurred in generating the income.
It should also be noted that, under Article 102.1.30 of the Tax Code, a 75% tax exemption applies to the business income of individual entrepreneurs classified as micro-entrepreneurs, provided that the average monthly number of employees during the relevant year is not less than three and there are no outstanding mandatory state social insurance liabilities. The average monthly number of employees is determined by dividing the total number of employees throughout the calendar year by twelve.
Furthermore, in response to the inquiry, it was stated that under Article 218.5.11 of the Tax Code, persons engaged in the sale of gold, jewellery and other household items made from gold, as well as diamonds (whether processed, graded, mounted and set, or unprocessed, ungraded, unmounted and unset), are not entitled to be simplified tax payers. Therefore, individuals engaged in the sale of gold and other jewellery products are registered as personal income tax payers.
For more detailed information on tax registration procedures and the steps required depending on the specifics of your activity, you may consult the “Tax Guide” section on the official website of the State Tax Service. If you have additional questions, you may contact the Call Centre (195-1) or visit taxpayer service centres.