Comprehensive Social Insurance
The Law of Ukraine dated 08.07.2010 No 2464-VI “On Collection and Registration of Singe Contribution for the purposes of the Comprehensive Social Insurance” became effective on January 1, 2011. It introduced the single contribution for the comprehensive state social insurance (hereinafter – the Single Contribution) that actually replaced comprehensive contributions to four state social insurance funds.
The above mentioned social funds will still function to make the following payments:
- temporary disability assistance (under sick lists),
- maternity leave assistance,
- accidents payments,
- death allowance, etc.
To receive the above mentioned payments the company is obliged to calculate, prepare necessary documents and submit application to the relevant fund in case of exceeding 5 calendar days of insured accident. Social funds will examine Applications and after that transfer the insured amounts to a separate current account, opened by a legal entity for such a purpose.
As a bonus to its clients accace has already submitted the necessary documents for registration of Singe Contribution payers and would be glad to provide support in opening separate current accounts for the payments from social funds.
The percentage of the Single Contribution is defined by the class of professional production risk set by the Accident social fund and vary from 36,76 till 49,7%. The current account for Single Contribution payment is defined depending on the percentage of the Single Contribution. In case the class of professional production risk is defined incorrectly, the transferred Single Contribution payment is considered as arrearage. Therefore we highly recommend paying attention to the stated types of business activities in the Certificate on State Registration, and also define the code of type of economic activity classification by the main type of activity.
The Single Contribution is accrued within limits of maximum value that is equal to 15 amounts of the cost of living for able-bodied persons, set in the Law on the State Budget for 2011:
- from January 01, 2011 – 14 115 UAH;
- from April 01, 2011– 14 400 UAH;
- from October 01, 2011– 14 775 UAH;
- from December 01, 2011– 15 060 UAH.
The minimal wage for 2011 and cost of living for able-bodies persons for 2011:
- from January 01, 2011 – 941 UAH;
- from April 01, 2011– 960 UAH;
- from October 01, 2011– 985 UAH;
- from December 01, 2011– 1 004 UAH.
Personal Income Tax
New rules of accounting and personal income tax (PIT) are introduced in the Tax Code of Ukraine # 2755-VI from December 02, 2010 (hereinafter TCU) in the chapter IV of TCU and came into force in January 01, 2011.
- The main change is the introduction of a progressive rate of personal income tax.
- Monthly income tax that doesn’t exceed 10 minimum wage amounts is subject to 15% PIT, the balance is taxed at 17% PIT.
- A double rate for personal income of individuals- non-residents (including payroll) is not foreseen; however the rates for different kinds of income may vary.
- Ukrainian dividends are subject to 5% tax (Art. 167.2 TCU).
- An interest income received from current or deposit bank accounts is taxable starting January 01, 2015 (Art. 167.2 TCU).
Non-residents registered as entrepreneurs in accordance with the Ukrainian legislation gain Ukrainian resident status and are obliged to state in tax returns not only income sourced in Ukraine, but also income sourced outside of Ukraine (Art. 17.12 and 178.4 TCU)
In connection with the above stated changes, accace team will be happy to provide you with support in opening separate bank accounts for the payments from social funds, and our tax department will gladly provide with tax opinions on the changes following the adoption of the Tax Code.
If you have your questions regarding the changes in Comprehensive Social Insurance and Personal Income Tax, don’t hesitate to contact Kiev team of accace at [email]ukraine@accace.eu[/email] or via tel.: +38 044 569 3310.
Your accace team
