In this article the order of receiving the tax credit according to the personal income tax is stated, the explanation is given: who has the right to the Tax Code, restriction of the right on Tax Code charge, documentary confirmation of the expenses, included in the tax credit.
The tax credit (further – the Tax Code) – is the sum (cost) of the expenses suffered by the taxpayer – the resident in connection with acquisition of the goods (works, services) at residents – physical or legal entities within fiscal year (except expenses on payment of the VAT and the excise duty). The taxpayer can reduce the total annual taxable income received by results of this fiscal year (Law No. 889 item 1.16) by the Tax Code sum. Such reduction of the income grants the right to the payer to receive from the budget unduly paid personal income tax.
Who has the right to <o:p> Oil Company </of o:p>
Individuals – residents to whom individual identifikatsiyoonny numbers (Law No. 889 subitem 5.4.1) are appropriated have the right to the Tax Code. Persons, kotoyory officially refused identification number, have no legislative bases for Tax Code charge.
Let’s notice: have no right to the Tax Code the taxpayers receiving the income, distinct from a salary (business owners, individuals, osushchestyovlyayushchy an independent professional deyatelyyonost, the military personnel, etc.).
However if the above-stated individuals received a salary in understanding of the Law No. 889, they have the right to the Tax Code within this salary.
Restriction of the right on Tax Code charge
The law No. 889 entered certain restrictions of the right of taxpayers on obtaining the Tax Code, namely:
• total amount of the added Tax Code can’t exceed the sum of the total taxable income of the nalogoyoplatelshchik received within fiscal year as a salary (subitem 5.4.2 of the Law No. 889, Instruction No. 442 item 2.6);
• the taxpayer who didn’t use the right to Tax Code charge by results of fiscal tax year, has no right to reflect unrecorded expenses next tax years (Zayokon No. 889 subitem 5.4.3, Instruction No. 442 item 2.7).
Realization of the right to <o:p> Oil Company </o:p>
The taxpayer, wishing to use the right to the Tax Code, should present to body of GNS in a place of permanent or primary residence or in a place of tax registration the annual declaration on a property condition and the income (further – Dekyolaratsiya) (Instruction No. 442 item 1.8, 2.3). It is expedient to put copies of documents to the Declaration, podtverzhyodayushchy expenses.
The declaration is filled with the taxpayer samoyostoyatelno or other person, notarially upolnomoyochenny taxpayer on it (Instruction No. 442 item 2.3).
Bodies of GNS on places provide nalogoplatelyyoshchik with Declaration forms free of charge.
Let’s notice that representation together with the Declaration of copies of the documents confirming expenses, not predusmoyotreno the Law No. 889. Nevertheless GNAU in the Letter No. 25941 urgently recommends them to represent for the sake of complete and timely return to a nalogoplayotelshchik of money as a result of application of the right by it on the Tax Code.
The taxpayers filling the Declaration with a view of realization of the right to the Tax Code, can predstavlyat it in bodies of GNS during the whole 2008
(i.e. for them term of submission of Declarations won’t be limited on April 1, 2008).
The taxpayer or the person authorized by it have the right to address to appropriate body of GNS with the letter of inquiry concerning Dekyolaratsiya’s filling with specialists of this taxing authority. Such inquiry moves till March 1 of the year following the reporting. The body of GNS is obliged to render besplatyony services in such filling (Instruction No. 442 item 2.4).
However it is necessary to mean that the Declaration section in which data concerning a Tax Code nachisyoleniye are reflected, is filled with the payer independently (Instruction No. 442 item 2.4.1).
For calculation of the Tax Code and the sum of the personal income tax which is subject to return from the budget, the sum of the salary, added to the taxpayer, without reduction by the sum of insurance fees (Letter No. 7494) is used.
The sum of means which is subject to return to a nalogoplatelyyoshchik, is enlisted on his bank account or otpravlyaetsya by a postal order to the address specified in the Declaration, within 60 calendar days from the date of its receiving by body of GNS (Instruction No. 442 item 4.5).
The expenses included in the Tax Code, and their documentary confirmation <o:p> </o:p>
In 2007 according to Law No. 889 item 5.3 the taxpayer has the right to include the following expenses in Tax Code structure:
1. A part of the sum of the percent paid on the ipotechyony credit which pays off by the rules defined according to Art. 10 of the Law No. 889 (subitem 5.3.1 of the Law No. 889, item 3.1. Instructions No. 442).
The taxpayer has the granted right in case of a priobyoreteniye or construction at the expense of a mortgage loan of a house (the apartment, a room) which is its main residence.
Use such right the taxpayer can not more often than once in 10 calendar years since a year, in which housing it was acquired or started to be under construction (item 10.5 of the Law No. 889, Instruction No. 442 subitem 3.1.4).
That is annually during this term the nalogoplayotelshchik can include expenses on payment of a part of the sum of percent on one mortgage loan in the Tax Code. In case of early repayment of the main sum of the credit and percent of the previous mortgage loan it has no right to the Tax Code on a new mortgage loan during the specified term (Letter No. 138).
The part of the sum of percent which joins in structure of the tax credit, is equal to sum work procentov, actually paid by the taxpayer within fiscal tax year, on koefficient. The factor pays off by division of the minimum total area of housing (<= 100 sq.m w:st = on> 100 sq.m </st1:metricconverter>) on the actual total area of housing which is under construction (is got) by st1:metricconverter ProductID at the expense of a mortgage loan (Law No. 889 item 10.2).
The documents confirming such expenses, yavlyayutsya (Letter No. 4082):
• a copy of notarially certified mortgage doyogovor (this contract should be concluded after January 1, 2004 for the term of not less than 5 years);
• copy of the credit agreement;
• the reference from bank about the paid percent;
• copy of pages of the passport of the taxpayer, where ukayozano place of registration (i.e. residence).
2. The sum of means or property value, pereyodanny in the form of donations or blagotvoritelyyony contributions to the non-profitable organizations, zaregiyostrirovanny in Ukraine (in the size exceeding 2 %, but no more than 5 % from the sum of its total annual taxable income) (subitem 5.3.2 of the Law No. 889, Instruction No. 442 item 3.2).
The documents confirming these expenses can be:
• payment order on non-cash transfer of means;
• bank or post office receipt;
• the reference of the employer which by proxy carried out transfer of the sums of means from the poluyochayemy income.
The taxpayer isn’t obliged to prove to body of GNS that establishment (organization) to which the poyozhertvovaniye is transferred, is the non-profitable organization, poskolku it enters into competence of taxing authorities.
3. The sum of the means paid in favor of proyofessionalno-technical or higher educational zavedeyoniya for compensation of cost of the training or training of the member of the family of the first degree of relationship, but no more than 740 UAH. in calculation for each full or incomplete month of training within fiscal nalogoyovy year (Law No. 889 subitem 5.3.3).
The list of educational institutions, payment for training in which joins in the Tax Code:
Let’s remind that his parents and parents of his husband or the wife, his husband or the wife, children both such individual, and his husband or the wife, including children adopted by them () are considered as subitem 1.20.4 of the Law No. 889, Instruction No. 442 subitem 1.15.1 as members of the family of the individual of the first degree of relationship.
The documents confirming such expenses, can be:
• contract copies with educational institution, etc.;
• copies of payment documents (the receipt, a doverenyonost, the reference of the employer which on the instructions of the taxpayer carried out transfer of the sums to educational institutions).
4. Sum of expenses on payment on own account insurance fees, insurance premiums (subitem 5.3.5 of the Law No. 889, Instruction No. 442 item 3.5).
The right to the Tax Code is provided provided that the strayokhovshchik is the resident of Ukraine, and the specified payments are carried out under contracts of long-term life insurance and non-state pension insurance as taxpayer, and chlenov his families of the first degree of relationship.
The size of expenses which can be included in the Tax Code, in 2007 makes:
• at insurance of the taxpayer – 740 UAH. in calculation for each of full or incomplete mesyayoets of fiscal tax year during which the insurance contract operated;
• at insurance of the member of the family of the taxpayer of peryovy degree of relationship – 370 UAH. in calculation for each of full or incomplete months of fiscal tax year during which the strakhoyovaniye contract affected each insured member of the family.
The documents confirming such expenses, can be:
• copies of the contract of insurance;
• copies of payment documents (the receipt, a doverenyonost, the reference of the employer which on a porucheyoniya of the taxpayer carried out transfer of insurance fees).
5. The sum of expenses on an artificial oplodotvoyoreniye irrespective of, marriage with the donor or not (subitem 5.3.6 of the Law No. 889, Instruction No. 442 item 3.6) is issued.
To include in the Tax Code the sum of the expenses connected with such type of artificial insemination as the substitute motherhood, can only the taxpayer – zhenshhina, being substitute mother.
Such expenses can prove to be true:
• the reference from a medical institution about carrying out artificial insemination;
• a copy of payment documents (the receipt, the power of attorney, the reference of the employer which on the instructions of a nalogoyoplatelshchik carried out transfer of expenses).
6. The sum of expenses on payment of cost of gosudarstvenyony services (including payment of the state fee), connected with adoption of the child (subitem 5.3.6 of the Law No. 889, Instruction No. 442 item 3.6).
In this case it is necessary to put a copy of the document on payment of the state fee to the declaration.
Conditional example
In 2007 to the taxpayer the salary in the sum of 12 000 UAH is added., from which it is withheld and perechislen in the personal income tax budget in the sum of 1 752,12 UAH.
Total amount of expenses on training made 3 200 UAH. (since September 1, 2007 the taxpayer studied in higher education institution and monthly paid for training of 800 UAH.).
The sum of expenses which can be included in Tax Code structure,-2 960 UAH. (740 UAH. x 4 months (September – December)).
In the given situation column indicators According to the payer of the Section I Calculation of the sum of a tax on the income of individuals (personal income tax) which is subject to return to a nayologoplatelshchik or payment in the budget, including in connection with charge of the tax credit will be are as follows:
Thus, the taxpayer has the right to return to it of the personal income tax in the sum of 396,12 UAH. (provided that the personal income tax in the sum of 1 752,12 UAH. it is completely paid in the budget in 2007).
List of documents
1. The law No. 889 – the Law of Ukraine from 22.05.03 of No. 889-IV About a tax on the income of individuals. <o:p> </o:p>
2. The instruction No. 442 – the Instruction about an order of charge by the taxpayer of the tax credit concerning a tax on the income of the individuals, approved by the order GNAU from 22.09.03 of No. 442. <o:p> </o:p>
3. The letter No. 138 – the SAY LIES Committee letter concerning finance and bank activity from 12.02.07 of No. 06-10/10-138 Concerning the taxation of the income of individuals. <o:p> </o:p>
4. The letter No. 4082 – GNAU letter from 28.02.07 of No. 4082/7/17-0217 Concerning the organization of work on declaring of the income received by individuals in 2006. <o:p> </o:p>
5. The letter No. 7494 – GNAU letter from 13.04.07 of No. 7494/7/17-0717. <o:p> </o:p>
6. The letter No. 25941 – GNAU letter from 28.12.05 of No. 25941/7/17-2117 Concerning the organization of work on declaring of the income received by individuals during 2005. <o:p> </o:p>
(On Balans-Agro newspaper materials). <o:p> </o:p>