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Checklist for managing an Individual Entrepreneur after leaving the company.

Nadiia Volk
Nadiia Volk December 1, 2020

Leaving an IT company, an individual entrepreneur faces many questions. Whether it's an IT recruiter, developer, or anyone from any other field of activity:

What to do next with taxes? How, where, and how much to pay in taxes? In what way and when to file declarations? How to understand that the single tax and the unified social contribution are different concepts with different procedures for determining the amounts to be paid?

But don't panic just yet. We have compiled a checklist with a step-by-step guide for anyone tasked with managing their individual entrepreneur independently after leaving a company. Let's look at the first step.

1. Obtain information from the company's accountant.

The first thing you need to do is obtain all the necessary documentation from your company (or the company's accountant) that confirms your income and provides information regarding tax payments and tax declarations for the last reporting period. This includes:

  • Contracts, invoices, and/or reports of completed work or provided services (for the entire period of your employment with the company).
  • Verification that there are no outstanding payments for Unified Tax and Unified Social Contribution.
  • Confirmation that all reports and declarations were submitted on time (verify the next deadline for tax declaration submission and the Unified Tax report).
  • Obtain an Income Record Book, which should be filled out for all income received during your employment, including the month preceding your departure.

2. Verify the originals of the documents

Next, make sure you have all the original documents confirming your status as an individual entrepreneur (IE):

  1. Certificate of Individual Entrepreneur Registration.
  2. Extract from the Unified Taxpayer Register (you obtained this from the tax authority at your place of registration).

If these documents were provided to the company at the start of your work there, request that they be returned, as the originals should be in the possession of the IE.

3. Obtain a Unified Digital Signature key

Next, make sure you have a Unified Digital Signature key for working in the electronic taxpayer's cabinet. If you don't remember or can't find it, ask your company's accountant to send it to you along with the password for the key.

Be sure to log in yourself to the electronic cabinet on the State Tax Service website (https://cabinet.tax.gov.ua/login) to personally verify the absence of tax arrears and check the expiration date of your key. This will allow you to generate a new key in a timely manner if necessary.

4. Calculate Unified Tax and Unified Social Contribution correctly

Remember how Unified Tax and Unified Social Contribution are calculated:

  • Unified Tax is calculated as 5% of the income amount.
  • Unified Social Contribution is calculated as 22% of the minimum wage (September-December 2020, minimum wage = 5,000.00 UAH, so minimum Unified Social Contribution monthly = 1,100.00 UAH until the end of 2020, i.e., for the IV quarter of 2020, the Unified Social Contribution amount to be paid is 3,300.00 UAH).

5. Monitor the payment of Unified Tax and Unified Social Contribution regularly

To ensure timely payment of Unified Tax and Unified Social Contribution, follow these steps:

  • Single Tax should be paid within 10 calendar days following the last day for submitting the tax return for Single Tax  (for the IV quarter of 2020, it should be paid no later than February 19, 2021).
  • Unified Social Contribution should be paid by the 20th day of the month following the last month of the reporting quarter (for the IV quarter of 2020, it should be paid no later than January 19, 2021).

Set reminders and mark these deadlines in your calendar to ensure you don't miss them. It's crucial to pay these taxes on time to avoid any penalties or issues with tax authorities.

6. Ensure that you submit your reports on time

Here's a brief checklist for handling your reporting:

For Unified Tax, the reporting is done quarterly (1st quarter, 1st half, 9 months, and annually). The tax declaration for Unified Tax should be submitted within 40 calendar days following the last day of the reporting quarter (for example, for the 4th quarter of 2020, the Unified Tax declaration should be submitted no later than February 9, 2021).

For Unified Social Contribution, the reporting is done annually. The Unified Social Contribution report for "yourself" should be submitted by February 10 of the year following the reporting period (for the annual Unified Social Contribution report for 2020, it should be submitted no later than February 9, 2021).

By following our recommendations, you can manage your Individual Entrepreneur independently and ensure timely tax payments and the submission of tax declarations for Unified Tax and Unified Social Contribution. If you wish to entrust the Entrepreneur independently management to a reliable accountant, we at EvoTalents.Accounting are always ready to assist you with Entrepreneur independently accounting outsourcing, corporate training, and consultations upon request.

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