Certificate of No Outstanding Social Security Contributions and Other Taxes: Who Needs It and Why?

In today's landscape of global business challenges and intricate regulatory frameworks, companies find themselves navigating the daily imperative of fulfilling diverse tax obligations. Central to this obligation is the acquisition of a certificate confirming the absence of outstanding tax liabilities, including obligations related to the unified social tax payments.

This certificate is an essential document, but when exactly is it required? This is a common query among clients. Our forthcoming article aims to provide clarity on this matter. We'll explore the avenues available for entrepreneurs to obtain this crucial tax clearance certificate and highlight important considerations in the process.

Our depth of knowledge in this area is extensive. With over a decade of experience, we have been offering not just robust legal support, but also specialized assistance in the tax domain for businesses operating both within Ukraine and internationally.

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What is a Certificate of No Outstanding Tax Liabilities?

A certificate of no outstanding tax liabilities, often simply referred to as a tax clearance certificate, is an official document provided by tax authorities. It serves as confirmation that a company has no current unpaid tax obligations.

This certificate plays a key role in validating a company's financial stability and its reliability as a taxpayer to interested parties. The issuance of such certificates is regulated by the "Procedure for Providing a Certificate of No Outstanding Payments," which falls under the oversight of control bodies № 733, as stipulated by the Ukrainian Ministry of Finance's order dated September 3, 2018.

The certificate also confirms the absence of any debts related to the unified social tax payments. A unified social tax is a mandatory social contribution that entrepreneurs and companies in Ukraine are required to pay to ensure citizens' social security. A clean record in unified social tax payments indicates that the company (or individual entrepreneur) is up to date with all social contributions and does not have any pending issues with social funds. This aspect is crucial for ensuring the uninterrupted operation of the business and its participation in various economic and social initiatives.

In essence, this document not only verifies a company's legal compliance in front of tax authorities but also acts as a mark of confidence for potential partners and investors.

When is it Necessary to Obtain a Certificate of No Outstanding Tax Liabilities?

Obtaining a certificate of no outstanding tax liabilities, particularly regarding the unified social tax, becomes a critical part of business operations in several scenarios. Let's explore the main situations where this document is essential:

1.      Obtaining Loans and Financial Planning:

Financial institutions like banks often demand this certificate during the credit application process. It acts as evidence of a company's ability to efficiently handle its financial commitments and its clean slate regarding tax matters.

2.      Participating in Grant Programs and Social Initiatives:

Grant organizations may require this certificate from companies applying for grants or participating in social projects. This ensures that the company meets the criteria for social and financial stability.

3.      Engaging in International Trade and Partnerships:

For businesses involved in international agreements, proving financial stability and compliance with tax responsibilities is crucial. The Certificate of No Outstanding Tax Liabilities reassures potential international partners of the company's financial credibility.

4.     Preventing Double Taxation:

For international corporate clients, this document is vital for international reporting. It certifies that taxes have been paid in Ukraine, helping to prevent double taxation under international tax treaties between Ukraine and other countries.

In summary, obtaining a certificate of no outstanding tax liabilities is a strategic necessity in these scenarios, contributing to the successful functioning of the company and its involvement in diverse business activities and initiatives.

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How to obtain a certificate of no outstanding tax liabilities? For this purpose, it's necessary to submit an application in a specified format, which can be either in paper or electronic form.

For the paper form, an authorized company representative should personally visit the state tax office where the taxpayer is registered and submit the application. Another option is to authorize representatives from our legal firm to submit the application swiftly on your behalf.

Alternatively, documents can be submitted electronically through the taxpayer's electronic cabinet, for which the company must possess a qualified electronic signature.

In the application, regardless of the submission method, you need to specify whether you want the tax office to issue the certificate in paper or electronic form. The issuance of the certificate is free of charge.

The tax office prepares the certificate within 5 working days from receiving the application.

Please note! The certificate has a very short validity period of just ten calendar days from its issuance, so it's essential to acquire it without delay.

For the paper certificate, the authorized person from the company can collect it directly from the tax office where the application was submitted. The certificate will be available in the Electronic Cabinet if requested in electronic form.

Assistance in Obtaining a Certificate of No Outstanding Tax Liabilities

Our company offers comprehensive support from the beginning of our collaboration with the client, including consultations and needs analysis. Specifically, we:

• Assess if our clients genuinely need a certificate of no outstanding tax liabilities;
• Collaborate with tax authorities by submitting applications and representing client interests;
• Engage with the tax authority during document checks to address any potential issues or misunderstandings that might arise;
• Take full responsibility for managing the certificate acquisition process, ensuring compliance with all legal aspects.

We assure complete confidentiality of client information and provide confidence in the accuracy and efficiency of our services, adeptly handling even complex tasks.

Learn more about our tax law service in Ukraine here.

Find out about our accounting support services for your business here.