Trucks and their maintenance are now referred to as PE expenses on the general system

The Law of Ukraine dated 16.01.2020 No. 466-IX introduced amendments to the Tax Code of Ukraine, which affected many sections. Individual entrepreneurs working on the general taxation system did not go unnoticed. Let's consider these changes.

From 23.05.2020, the concept of “dual-use fixed asset” was removed from the GCC and the cost of fixed assets was increased. The list of expenses that reduce the amount of net income for taxation has been expanded.

Trucks

So, trucks are no longer classified as fixed assets, the costs of which were not considered business-related costs. This means that, starting from the specified date, expenses can be attributed to:

- amortization of expenses for the purchase and improvement of trucks, truck tractors, semi-trailers, tractors, hydraulic lifts and everything that the tax authorities previously unreasonably attributed to trucks;

- expenses for the maintenance of trucks (as well as truck tractors, semi-trailers, tractors, hydraulic lifts, etc.). That is, the costs include not only fuel, but also the costs of maintenance, repairs, rent, as well as all costs associated with the use of trucks, the list of which is given in paragraph 177.4 of Art. 177 GCC.

Recall that in the absence of a decoding of the term "content", the practice, with the light hand of the tax authorities, went the most fiscal way. In fact, everything was banned except for the actual fuel. Neither maintenance, nor repairs, nor rent and the like could be attributed to expenses. Now this prohibition is gone. Therefore, all costs associated with the maintenance of a truck, which, in principle, "fit" in Art. 177 GCC (that is, meet the requirements for the composition of costs) can be taken into account.

Fixed assets

The value of the property related to the fixed asset has been changed. So, starting from May 23, 2020, a fixed asset is a tangible asset intended for use in economic activities, the cost of which exceeds UAH 20,000 (previously - UAH 6,000) and a useful life of more than 1 year. What should you pay attention to when moving from UAH 6,000 to UAH 20,000?

We use the new values of fixed assets not by the date of acquisition, but by the date of commissioning. That is, if, for example, a refrigerator counter was purchased before May 23, 2020, but was put into operation starting after May 23, 2020, then we are already looking at the new cost criterion. If its cost is up to UAH 20,000, we refer to expenses, if more, we depreciate;

Fixed assets that were put into operation before 23.05.2020) remain registered as fixed assets based on the previously valid criterion - UAH 6,000

If the cost of fixed assets is changed, then the cost of low-value non-current assets (MNMA). So, from now on, these are assets, the value of which does not exceed UAH 20,000. It is definitely impossible to depreciate such objects, since these are not fixed assets. But is it possible then to include their cost in the expenses directly in the month of their purchase? We believe that yes. Tax authorities have previously expressed their opinion on the possibility of accounting for the costs of acquiring MNMA.

You can do that. If the MNMA approaches the cost limit and in order not to irritate the tax authorities, by its order establish a method of attributing 50% to 50% expenses, as is done in the accounting of a legal entity. That is, 50% of the cost of MNMA should be included in expenses in the month of acquisition and commissioning, and 50% in the month of write-off.

If an individual entrepreneur has doubts about this, we recommend getting individual tax advice on this matter. After all, this opportunity is still valid until the end of the year.

Reconstruction, modernization and other improvements

Previously, the costs of reconstruction, modernization and other improvements were immediately attributed to the expenses of the reporting month due to the direct norm of the GCC. From now on, starting from May 23, 2020, such expenses, together with the fixed assets to which they relate, are subject to depreciation. It should be noted that the costs associated with current repairs are related to the costs in the month of their implementation.

Natalya Shcherbak, tax consultant of the newspaper "Private Entrepreneur", especially for the magazine "My Business"