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Advance installment is calculated from the exceeding sum of the dividends available for distribution over the tax object value during the relevant fiscal year.
It is required to adhere to 2 conditions simultaneously when determining the excess sum of dividends available for distribution for which the income tax advance installment is calculated over the tax object value during the relevant fiscal (reporting) year. These conditions are as follows:
- submission of the income tax declaration for the year,
- complete repayment of tax liabilities independently charged by the tax payer in the declaration.
Otherwise, as the State Fiscal Service stated in its letter № 23921/6/99-99-19-02-02-15, the income tax advance installment shall be calculated for the full amount of dividends.
Tax liabilities payment procedures for the income tax during dividends distribution is designated in the paragraph 57.11 article 57 of the Tax Code.
In accordance with subparagraph 57.11.2 paragraph 57.11 article 57 of the Tax Code unless authorized by subparagraph 57.11.3 paragraph 57.11 article 57 of the Tax Code, the participatory interests eminent making a decision on dividends distribution to its shareholders (owners) should calculate and submit to the budget the income tax advance installment.
Advance installment is calculated from the sum exceeding the distributed dividends over the tax object value during the relevant fiscal (reporting) year. In the end of the year the dividends shall be distributed given that the bill of debts is cleared. In case of the existence of unsettled bill of debts, the advance installment shall be calculated from the whole sum of dividends available for distribution. The rate of advance installment is calculated according to paragraph 136.1 article 136 of the Tax Code. The amount of dividends available for distribution shall be reduced by the amount of advance installment.
This norm is applied starting from the dividends distribution in 2015 based on the performance in the previous years.
If the dividends are distributed for an incomplete calendar year, the tax object value shall be used for the amount calculation of the mentioned excess sum. The tax object is calculated proportionally to the number of months for which the dividends are distributed (subparagraph 57.11.2 paragraph 57.11 article 57 of the Tax Code).
In case the undistributed profits are divided for several previous years upon the owners’ decision, in order to designate the amount of dividends for which the advance installment is calculated, the undistributed profits for each year in accordance with the fiscal reports shall be compared with the tax object income tax for the relevant year.
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