“Small” Christmas gifts are not taxed

Christmas holidays come soon and most employers will take care of creating a festive mood for their employees and their children. But then, there are questions regarding the inclusion of the cost of children’s gifts to the taxable income of the taxpayer and their indication in the tax statements.

STI in Uzhgorod notes that while determining the tax on personal income of the cost of children’s Christmas gifts, one should be guided by the provisions of the Tax Code of Ukraine.

Thus, according to para. 165.1.39 of TCU, the total monthly (yearly) taxable income of the taxpayer shall not include the cost of gifts received in non-monetary terms, if it does not exceed 50% of one minimum wage established on January 1 of the reporting year. In 2013, this amount is 573.50 UAH per month. If the cost of the gift exceeds this amount, it shall be taxed at a rate of 15 or 17 percent.

It should be noted that the Christmas gifts given to individuals and the cost of which does not exceed 573.50 UAH shall be indicated in the calculation of income accrued (paid) for the benefit of taxpayers, and the amounts of tax deducted from it under the form number 1ДФ on the basis of "160".

Please note that if the cost of gifts exceeds 50% of one minimum wage established on January 1 of the reporting year, then this amount shall be indicated in the tax calculation under the form 1ДФ as an additional benefit on the basis of "126" and shall be taxed at the appropriate rate set.