Late reporting – revocation of the single tax payer status?

As you know, Group 4 single tax payers must submit annual reporting to the tax authorities by February 20 to confirm their respective tax status for the following year.

Quite often, producers fail to comply with this obligation in a timely manner for various reasons. In such a situation, the tax authorities always have a standard solution: revocation of the single tax payer status.

So what should an agricultural producer do: agree and switch to the general taxation system, or is there still a chance?

Let’s take a look at the material part. What grounds do the tax authorities have?

Thus, the provisions of clause 299.10 of the Tax Code of Ukraine stipulate that the revocation of the single tax payer status may occur if a Group 4 single tax payer fails to submit tax reporting as provided for in sub-clause 298.8.1 of clause 298.8 of Article 298 of this Code, i.e., the same general and reporting tax declarations that must be submitted by February 20 of each year to confirm the single tax payer status.

Therefore, if one carefully reads the above provision of the Code, it can be concluded that the status may be revoked in the case of failure to submit reporting but not if it is submitted late.

Fortunately, the Ukrainian judges agree with this conclusion and note that late submission of tax reporting is not a ground for revoking the single tax payer status.

In addition, such revocation usually occurs without an audit or even a ruling on the revocation of the status, which also constitutes a violation by the tax authorities.

Thus, missing the deadline for submitting general and reporting declarations and calculating the share of agricultural production is not intrinsically a ground for revoking the single tax payer status, and such actions of the tax authorities can be challenged in court with high rates of success.

At the same time, we emphasize that the above conclusion will be true in cases where the tax authorities have no other grounds for revoking the respective status pursuant to clause 299.10 of the Tax Code of Ukraine.