“White Business Club” — Benefits for Conscientious Taxpayers

The Verkhovna Rada has passed the Law on the “White Business Club.” We are now awaiting the President’s signature and official publication. However, you can already assess whether you might be accepted into this “club” and what privileges you can expect.

How to Join the “White Business Club”

To be included in the List of Taxpayers with a High Level of Voluntary Compliance (the List), you must meet both general requirements and additional criteria specific to your taxation system.

General Requirements:

1. Tax debt and/or other controlled payments do not exceed 3000 UAH and are less than 30 days old.
2. No arrears in social security contributions.
3. Compliance with criteria outlined in the Tax Code.
4. No breaches in tax obligations regarding reporting and documentation.
5. No tax notices for export/import violations in the last 12 months.
6. Not identified as a risky VAT payer.
7. No ongoing liquidation or bankruptcy proceedings.
8. No sanctions applied under Ukrainian law.
9. No connection to an aggressor state against Ukraine.
10. No changes in primary economic activity in the last 12 months.

Additional Criteria by Category:

1. Legal Entities on General Taxation:
   • Corporate tax payments meet or exceed industry averages over the last four quarters.
   • VAT payments meet or exceed industry averages.
   • Average monthly salary meets or exceeds industry averages by 10%, with a minimum of 5 employees.
2. Residents of Diia City:
   • Total tax payments meet or exceed Diia City resident averages.
3. Legal Entities on Simplified Tax System (Third Group):
   • Total tax payments meet or exceed industry averages over the last four quarters.
   • Average monthly salary meets or exceeds industry averages by 10%, with a minimum of 5 employees.
4. Legal Entities on Simplified Tax System (Fourth Group):
   • Difference between total minimum tax liability and total paid taxes is negative.
   • VAT payments meet or exceed industry averages.
   • Average monthly salary meets or exceeds industry averages by 10%, with a minimum of 5 employees.
   • Land ownership/rental meets specified minimums and taxes are paid accordingly.
5. Self-Employed Individuals on General Taxation:
   • VAT and personal income tax payments meet or exceed industry averages.
   • Average monthly salary meets or exceeds industry averages by 10%.
6. Self-Employed Individuals on Simplified Tax System (Third Group):
   • Declared income exceeds 5 million UAH.
   • Total tax payments meet or exceed industry averages.
   • Average monthly salary meets or exceeds industry averages by 10%.

Newly registered taxpayers can be included in the List from the first day of the month following a full calendar year after registration.

List Publication and Information

The State Tax Service (STS) will form and approve the List by the last working day of March, May, August, and November, publishing it on the official STS website within 15 working days. The first List is expected by September 20, 2024.

The List will include:

• Name for legal entities.
• Full name and tax number or passport details for individuals.

Taxpayers can opt out of having their information published by notifying the STS.

Special Tax Administration for List Members

1. No Inspections:
   • No factual inspections related to fuel storage for own needs.
   • No unplanned document inspections except under specific conditions (e.g., transfer pricing control, certain taxpayer activities).
2. Shortened Verification Periods:
   • Cameral and documentary verifications within 5 and 10 working days for VAT refund claims.
3. Exclusive Tax Consultations:
   • Individual tax consultations provided by the central STS within 15 calendar days.
4. Dedicated Compliance Manager:
   • A designated STS official for interaction, available for consultations and video conferencing.
5. Tax Information Requests:
   • Taxpayers can request information about tax risks and receive guidance on mitigating them within five days.

Worker Reservation Benefits

The Verkhovna Rada recommends that the government amend the Order of Reserving Conscripts during Martial Law to allow taxpayers on the List to reserve up to 25% of their conscripted employees. Further decisions from the Cabinet of Ministers are awaited.

Conclusion

Joining the “White Business Club” offers significant advantages, including reduced inspections, quicker verification processes, dedicated support, and the ability to reserve a portion of your workforce during martial law. Ensure compliance with the stringent criteria to benefit from these privileges.