How to File Your 2021 Income Tax Return and Claim a Tax Deduction

Don't know how to properly fill out an income declaration?

We offer services for filling out and submitting the annual income and property declaration for 2021.

The deadline for submitting the annual income declaration for 2021 is April 30, 2022. However, if you want to use a tax discount, the declaration can be submitted by December 31, 2022. We will help you analyze your received income, correctly fill out documents, and submit reports. As a result, within 60 calendar days from the date of filing the declaration with the tax service, you will be able to recover the amount of personal income tax (ПДФО) that was overpaid to the budget.

The cost of services for filling out and submitting an income declaration ranges from 3 to 7 thousand UAH and depends on the number of documents that need to be processed for preparing the declaration.

Not everyone is obliged to declare their income. There are categories of citizens for whom this procedure is voluntary and who may not file a declaration. Therefore, it is necessary to determine which incomes are subject to mandatory declaration and which incomes can be declared voluntarily.

What income is subject to mandatory declaration

Income received not from tax agents, i.e., other individuals who are not registered as self-employed persons.

An individual cannot act as a tax agent and pay taxes on income paid to other individuals, as, according to current legislation, tax agents can only be legal entities, individual entrepreneurs (hereinafter – ФОП), and representative offices of non-resident legal entities, who are obliged to accrue, withhold, and pay taxes, report on this in a timely manner, and bear responsibility for non-compliance with legal norms.

This group of incomes includes:

• income from leasing or renting movable and immovable property if the lessee is an individual (sub-para. 164.2.5 ПКУ)
• remuneration for individuals working for private persons as housekeepers, nannies, gardeners, drivers, etc. (sub-para. 164.2.2 ПКУ)
• income received from the sale of self-produced agricultural products under conditions that comply with current legislation (sub-para. 165.1.24 ПКУ)
• if, within one reporting year, an individual sells two or more movable properties, for example, passenger cars, motorcycles, or other vehicles, such income is also subject to declaration (sub-para. 173.2 ПКУ).

Foreign income – any income received from sources outside the customs territory of Ukraine for any type of activity.

More and more often, Ukrainians go abroad in search of better earnings and do not consider that such income must be declared in their homeland. Those who are officially employed and whose salaries are taxed abroad are not exempt from filing a Declaration and paying taxes in Ukraine. However, to avoid double taxation, such an employee can obtain a certificate in the country where they work, stating the income received and taxes paid, which serves as a basis for reducing these taxes in Ukraine.

This also includes income from renting out or selling property located abroad.

Income from independent professional activity (sub-para. 178.4 ПКУ).

For example, income of private notaries, lawyers, auditors, accountants, appraisers, etc.

Income in the form of inheritance (sub-para. 174.3 ПКУ) and gifts (sub-para. 174.6 ПКУ).

Since the obligation to pay inheritance taxes is imposed on the heir, they are obliged to include the amount of the received inheritance in the declaration and pay the corresponding taxes, except in cases where the inheritance is taxed at a 0% rate. In the case of receiving gifts from individuals, the rules for their declaration and taxation are identical to inheritance. If gifts are received from legal entities or ФОПs, they are taxed on general grounds provided for the taxation of additional benefits.

Non-targeted charitable assistance (sub-para. 170.7.3 ПКУ).

Income of foreigners who acquired the status of a resident of Ukraine in the reporting year (sub-para. 170.10.4 ПКУ).

Such individuals are obliged to submit a declaration, indicating income from sources of origin in Ukraine and foreign income.

Income of ФОПs under the general taxation system (sub-para. 177.5 ПКУ).

The incomes listed above are not an exhaustive list of incomes subject to mandatory declaration. These are the most common incomes encountered in practice. For individual cases, we recommend contacting specialists who can clearly determine whether your income is subject to declaration.

As for voluntary declaration, if a taxpayer received income exclusively from tax agents during the reporting period, in accordance with sub-para. 179.2 ПКУ, such a taxpayer is considered to have fulfilled their obligation to file a declaration.

Who may not declare income

Regardless of the amount and type of income received, the following are exempt from the obligation to file a declaration:

• minors, underage persons, or incapacitated persons, and persons who are fully supported by other individuals or the state (in such a case, the obligation to file a declaration rests with other persons)
• persons serving military conscription
• persons who are wanted
• persons who are under arrest or are detained or sentenced to imprisonment
• persons who are in captivity or imprisoned in the territory of other states.

In summary, it should be noted that ignorance of the law does not exempt from responsibility, and income declaration is an obligation imposed on all citizens by the highest legislative act of Ukraine – the Constitution.

Approach the issue of declaring your income wisely, engage specialists to analyze your received income, who will assist you in making decisions, filling out documents, and submitting reports.