Chapter 2. Observing economic rights
In other appeals to the Commissioner, the entrepreneurs indicated that the reasons for their temporary
suspension of economic activity were circumstances that did not directly or indirectly depend on them.
Factors that forced them to cease their business activities included temporary disability due to disease,
maternity leave to take care of a child or incapacitated family member, seasonal or irregular nature of
their activity, temporary stay in places of custody or imprisonment, etc.
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The draft law of Ukraine “On Amendments to the Law of Ukraine “On Collection and Accounting of the
Single Contribution to Compulsory State Social Insurance” on Resuming the Payment of Single Social
Contribution Depending on the Income of Small and Medium-Sized Entities and Prevention of their Mass
Termination” (reg. #1142 of 29.08.2019) was submitted to the Verkhovna Rada of Ukraine that provides
for the right of an individual entrepreneur to voluntarily determine the basis of accrual of a single social
contribution if such an entrepreneur does not receive income/profit in the reporting year or in specific
month of the reporting year.
Example
Citizen T. appealed to the Commissioner with a complaint to the State Fiscal Service of Ukraine that
accrued to him the single social contribution as to a disabled person of group III with visual impairments
(for life). Citizen T. reported to this authority that he renders justice-related services to people with
impaired vision, and is accounted for in the tax authority as a self-employed person conducting
independent professional lawyer’s activities. He has no regular monthly income, as the number of clients
is limited, and there is no state or municipal service provider in Ukraine that would provide such services
and where he can find a job. The State Fiscal Service of Ukraine, referring to the requirements of the
legislation and not taking into account the explanations provided and the circumstances, decided to
maintain its request for debt payment in the amount of more than UAH 20,000.
According to effective legislation, the request of the tax authority for debt payment is fulfilled by the
state enforcement service, including through the arrest and compulsory sale of the debtor’s property.
The Commissioner sent the relevant request to the Ministry of Finance and State Tax of Ukraine, but
these authorities responded that the calculation of the SSC was done correctly.
Court decisions on this issue were made in favour of both entrepreneurs and supervisory bodies.
The decisions of the Supreme Court of 02.09.2019 in case #520/3939/19 and of 04.12.2019 in case
#440/2149/19 proclaimed that the request of the supervisory authority for payment of debt for SSC in
cases where such a payer is entrepreneur who simultaneously performs an independent professional
activity or is a hired employee is unlawful and cancelled this request.
Despite positive progress in the case law, the issue has not been fully resolved and, therefore, the
violations of entrepreneurs’ rights continue.
CHAPTER 2
However, during these periods, the supervisory authorities charged them tens of thousands of hryvnias
as arrears on payment of SSC and took coercive measures to recover them through the enforcement
services.
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