Main points
- Incorrect payment assignment may result in additional taxes being assessed or loss of single tax payer status.
- Typical errors include non-compliance with KVEDs or the indication of someone else's last name, which can be interpreted as third-party income.
Payment destination for sole proprietors / Pexels
A bank statement is the first thing tax officials look at during audits or financial monitoring. And while entrepreneurs often focus on amounts and dates, there is another important line that is often ignored – the purpose of the payment.
When might the tax office have questions about an individual entrepreneur?
Incorrectly specified purpose of payment can lead to serious consequences: from additional tax assessment to loss of single tax payer status, writes YANKIV.
If you don't control what exactly the client writes in the payment, you can accidentally “set yourself up” before the tax authorities. There are typical errors that immediately attract the attention of regulatory authorities:
- when it is indicated “for a service”, but the KVED only allows the sale of goods;
- automatic wording “for goods/services” if the individual entrepreneur does not have both types of activity;
- the purpose of the payment does not correspond to the KVED;
- mention of “with VAT”, although the entrepreneur is not a VAT payer;
- someone else's last name is indicated instead of your own (this can be interpreted as third-party income).
The correct purpose of a payment is either a clear explanation of what the payment is for, or a reference to an invoice or contract. And most importantly, everything must match your KVEDs.
What should I do if I made a mistake in the “Payment Purpose” field?
If the payment has already been made with the wrong destination, you can still correct the situation. There are two options:
- Refund the funds and ask the client to resend the payment, but with the correct wording;
- Make an explanation – the client writes a statement explaining the error (with full name and tax number or passport data)
Based on such a document, you can adjust information and reduce risks during inspections.
The rules of the game in the modern business world are changing rapidly. Today, more than ever, it is important to take care of the balance of work and rest in order to have the strength and inspiration to conquer new business peaks. And the Škoda Karoq will easily help with this. From Monday to Friday, stay in touch even on the road using a wireless phone connection. And on the weekend, boldly set off with your family to discover new places, thanks to the Off-Road mode. And that's not all…
What else should individual entrepreneurs in Ukraine know?
-
Groups 3 and 2 of individual entrepreneurs differ in the established annual volume limit, as well as the number of employees. At the same time, the rates of the single tax and military levy are different for them, but the single social contribution is the same.
-
At the same time, the best days to register an individual entrepreneur are the beginning of the month. For group 3 individual entrepreneurs, the issue is the payment of a single social contribution, and for other groups, there is an opportunity to check all the correct steps regarding registration.