Ukrainians were allowed to have large "salaries in envelopes": what has really changed, - said Julia Stusenko

The National Bank of Ukraine allowed Ukrainian companies to pay wages of more than 50 thousand hryvnas in cash. This decision caused an ambiguous reaction in the society - some decided that the country had legalized “salaries in envelopes” for which it is not necessary to pay taxes.

Is it really so, explained to the edition of "Segodnya" associate partner of "Skliarenko, Sydorenko and partners" Yulia Stusenko.

Back in January 2017, the National Bank of Ukraine banned cash payments in an amount above 50 thousand hryvnas. The lawyer clarified that the resolution of the National Bank of Ukraine, in particular, prohibited “business entities to carry out settlements with individuals in cash in the amount of more than 50 thousand hryvnas” per day.

“This tax rate was applied to issues related to the payment of wages. They believed that wages in the amount of more than 50 thousands UAH should be paid to employees exclusively in non-cash form. Employers, who from time to time applied to the tax authorities for clarification, did not always agree with this. And, apparently, when there was a critical mass of requests there, the tax authority decided to clarify the procedure for applying the norm directly from the regulator” explained Yulia Stusenko.

In response to a tax inquiry, the National Bank clarified that the restrictions on cash payments do not apply to payments related to wages. Such cases have decided to consider the exception to the rule of 50 thousand hryvnas. Changes entered into force on February 15.

“As can be seen, no illegal tax evasion schemes (namely, wages in envelopes that were associated with them) are out of the question. In fact, the National Bank only specified the existing norm, confirming the possibility for companies to pay wages in cash in any amount,” the lawyer said.

Clarification of the NBU does not in any way cancel salary taxation as income, mentioned Yulia Stusenko.

“Accordingly, regardless of whether it is paid in cash or on a card, the Personal Income Tax, the Unified Social Contribution and the military fee remain,” the lawyer said.

In this case, the Personal Income Tax, the Unified Social Contribution and the military fee must be transferred to treasury accounts in a cashless form. “Thus, in parallel with the payment of wages in cash, the employer is forced to make non-cash payments to pay taxes,” explained Yulia Stusenko. In addition, for the issuance of wages in cash, accounting must be compiled and maintain additional documents, including signing them with employees.

In general, the expert believes that for the employer it is cheaper to transfer wages to the bank accounts by wire transfer. “After all, the company pays commissions for issuing cash in a bank and the subsequent collection of such amounts, including those not issued to an employee for any reason ... Therefore, in general, innovations from the NBU will not result in massive wage payments in cash employers just have an additional opportunity to pay in exceptional cases,” the lawyer concluded.