LETTER OF THE PENSION FUND OF UKRAINE

of June 22, 2011 No. 12657/03-20

The pension fund of Ukraine considered the letter concerning payment of single fee on obligatory national social insurance by the physical person - the entrepreneur and reports.

[I.] By article 2 of the Law of Ukraine "About collection and accounting of single fee on obligatory national social insurance" (further - the Law) which became effective since 01.01.2011, it is determined that operation of this Law extends to the relations arising during implementation of the activities connected with collection and accounting of single fee.

Physical persons - the entrepreneurs including who chose simplified taxation system and members of families of these persons who take part in implementation of business activity by them according to item 4 of part one of article 4 of the Law are determined as payers of single fee.

According to paragraph one of Item 2 parts one of Article 7 and part eleven of article 8 of the Law physical persons - entrepreneurs and members of families of these persons who take part in implementation of business activity by them (except physical persons - the entrepreneurs who chose simplified taxation system) assess single contribution in the amount of 34,7 of the % for income amount (profits) received from their activities which are subject to taxation on the income of physical persons and on the income amount distributed between members of the family of physical persons - entrepreneurs who take part in implementation of business activity by them. At the same time the amount of single fee cannot be less than the size of the minimum insurance premium for each person in month in which income (profit) is gained.

[II.] The procedure for charge and payment of single fee is determined by the Instruction about procedure for charge and the payment of single fee on obligatory national social insurance approved by the resolution of board of the Pension fund of Ukraine of 27.09.2010 No. 21-5 and registered in the Ministry of Justice of Ukraine on October 27, 2010 for No. 994/18289.

According to subitem 4.5.2 of the Instruction the specified payers pro se and members of the families which are taking part in implementation of business activity by them pay single fee within year till March 15, till May 15, till August 15 and till November 15 in the form of advance payments in the amount of 25 percent of the annual amount of single fee estimated from the amount determined by tax authorities for payment of advance sums of income tax - subjects of business activity.

The amounts of single fee paid in the form of advance payments are considered by the payer in case of final calculation which is perfromed by it till April 1 of the year following after accounting year based on data of the annual tax declaration.

The amount of single fee cannot be less than the size of the minimum insurance premium for each person in month in which income (profit) is gained.

To payers who shall perform surcharge to the minimum insurance premium bodies of the Pension fund of Ukraine the notification calculation in form according to appendix 1 to the Instruction in which calculation of the amounts of such surcharge which are subject to payment by results of business activity for accounting year is specified for review goes.

Taking into account the above the single fee in the amount at least the minimum insurance premium is paid by entrepreneurs following the results of year only for those months in which they had the income (profit).

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