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LETTER OF THE MINISTRY OF THE INCOME AND CHARGES OF UKRAINE

of September 12, 2013 No. 17802/7/99-99-19-03-02-17

Concerning charge and payment of advance installments in case of dividend payout

(Endurance)

The ministry of the income and charges of Ukraine in connection with numerous requests of payers and territorial authorities of the Ministry concerning charge and payment of advance installments in case of dividend payout reports.

According to subitem 153.3.2 of item 153.3 of Art. 153 of the Tax code of Ukraine (further - the Code), except the cases provided by subitem 153.3.5 of this Item, the issuer of corporate laws who makes the decision on dividend payout to the shareholders (owners) assesses and brings in the budget advance installment on tax in the amount of the rate established by item 151.1 of Art. 151 of this Code added on the amount of dividends which are actually paid without reduction of the amount of such payment by the amount of such tax. The specified advance installment is brought in the budget to / or along with dividend payout.

The taxpayer - the issuer of corporate laws reduces the amount of the accrued tax of the accounting period by the amount of advance installment, prepaid during such accounting period in connection with charge of dividends (subitem 153.3.3 of item 153.3 of Art. 153 of the Code).

If the amount of advance installment, prepaid during the accounting period, exceeds the amount of the tax liabilities of the company - the issuer of corporate laws on the income tax of such accounting period, the amount of such excess is transferred to reduction of the tax liabilities of the following tax period, and in case of receipt of negative value of the taxation object of such next period - on reduction of the tax liabilities of future tax periods (subitem 153.3.4 of item 153.3 of Art. 153 of the Code).

Thus, reduction of the added obligations on the income tax on the amount of advance installment in case of dividend payout happens only following the results of the accounting period.

According to item 57.1 of Art. 57 of the Code income tax payers (except newly created, producers of agricultural products, non-profitable organizations (organizations) and taxpayers which have income which is considered in case of determination of the taxation object for the last annual accounting tax period do not exceed 10 million UAH) monthly pay advance installment on the income tax according to the procedure and in the terms established for monthly tax period in the amount of at least 1/12 tax amounts added to payment for the previous accounting (tax) year without submission of the tax declaration.

As a part of the annual tax declaration the taxpayer calculation of monthly advance installments which shall be paid in the next twelve months moves. The amount of advance installments determined in calculation is considered agreed sum of monetary commitments.

According to the changes brought by the Law of Ukraine of 04.07.2013 No. 403-VII "About introduction of amendments to the Tax Code of Ukraine and other laws of Ukraine concerning real estate objects" on the income tax in case of dividend payout according to item 153.3 of Art. 153 of this Code (including by results of the previous accounting (tax) periods) it is authorized to payers to reduce the amount of advance installments on the income tax by the amount of the paid advance installments.

If the amount of advance installments on the income tax paid in case of dividend payout according to item 153.3 of Art. 153 of this Code exceeds the amount of advance installments on the income tax, the amount of excess is credited in reduction of monthly advance installments in the following months under report before its complete repayment.

Considering that the Code provides determination of the amount of monthly advance installments only in the declaration for the previous accounting year and the mechanism of adjustment (reduction) of such amount within year is not provided, payers have opportunity to perform offsetting of the amounts of advance installments paid during 2013 on the income tax in case of dividend payout in reduction of monthly advance installments by results of declaring for reporting 2013.

Thus, the advance installments paid during 2013 on the income tax in case of dividend payout, and also the amounts of advance installments which are not considered in reduction of tax in case of dividend payout for previous year reduce the amount of the tax liabilities of the payer which are subject to payment, in the declaration for 2013. According to the amount of advance installments on the income tax which will be paid monthly since March, 2014 till February, 2015 inclusive are calculated in the declaration for 2013 in the amount of at least 1/12 tax amounts added to the payment for 2013 reduced by the amounts of the advance installments paid in such year in case of dividend payout and also which are not considered in reduction of tax of the amounts of advance installments in case of dividend payout for previous year.

 

Deputy minister                                        

A. Ignatov

 

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