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How to account for income for an IT entrepreneur?

Nadiia Volk
Nadiia Volk June 17, 2021

 

Starting from January 1, 2021, entrepreneurs on the single tax, specifically those in the 3rd group, are no longer required to maintain income books.

This raises immediate questions:

  • How should income be accounted for going forward, and is it necessary to do so?
  • What should be done with the income book?

Let's turn to the tax legislation:

So, individual entrepreneurs paying the single tax in the 3rd group, who are not VAT payers, are required to keep their accounts in an arbitrary form by reflecting the income received on a monthly basis (Article 296.1 of the Tax Code of Ukraine).

As we can see, the legislator does not limit or establish a specific form for keeping income records. The main requirement is the monthly reflection of the income received.

Therefore, income records can be kept in any format, such as:

  • In an income book (i.e., continue to maintain it);
  • In Excel, Google Sheets, etc.;
  • In a notebook or notepad, and so on.

When choosing how to keep income records, IT entrepreneurs should remember that this data serves as the basis for filling out a tax return and paying the single tax. Additionally, upon request from tax authorities, this information must be provided to verify the accuracy of tax calculation and payment.

Many IT entrepreneurs work with foreign companies, meaning they receive income in foreign currency. It is important to correctly determine the income amount and, consequently, the amount of the single tax to be paid.

Therefore, for IT entrepreneurs, the most acceptable and convenient way to keep income records, in our opinion and based on experience, is to maintain income records in Google or Excel spreadsheets.

How to keep income records in the form of a table? Here's an example:

Облік доходів, ФОП

This example illustrates that keeping income records for IT entrepreneurs in the form of a table is very simple and convenient. Most importantly, it helps avoid any errors when filling out tax returns and paying the single tax.

Of course, each entrepreneur decides independently how to keep income records from January 1, 2021.

As for the income book, it must be kept for 3 years after the end of the record-keeping period, which means from 2021 to 2023.

If you need assistance with managing your individual entrepreneur activities, consultation on filing declarations, or tax payments, feel free to contact EvoTalents.Accounting. They will provide quality and fast services for managing individual entrepreneurship.

We are also sharing a tax calendar with you, which will help you make timely tax payments and remember important dates for every entrepreneur.

Податковий календар, податки 2021, ФОП