Tax on Withdrawn Capital: Accounting and Reporting Issues

Recently, officials have been talking a lot about such a legislative initiative as tax on withdrawn capital, which should replace income tax. The income tax is different from the tax on the withdrawn capital (distributed profit) by the tax base. Although tax on withdrawn capital has not yet been introduced in Ukraine in 2019, the probability of its introduction in the coming years remains quite high. Therefore, it is advisable to justify the accounting of tax on withdrawn capital in advance, because if this tax becomes part of the current taxation practice, accountants have a methodical basis for its reflection on accounts and in financial reporting forms. The purpose of the article is to analyze the experience of introduction the tax on withdrawn capital in Estonia, a review of the legislative norms that are planned to be implemented in Ukraine, and the rationale for accounting methods for calculating and paying tax on withdrawn capital, as well as its reflection in the financial statements. The advantages and disadvantages of tax on withdrawn capital were disclosed. The structure of the tax base for the withdrawn capital in Estonia and Ukraine was investigated. The analysis of the indicators of the declaration of distributed profit, which is filed by tax payers in Estonia, was carry out. The article provides an example of calculating the tax on withdrawn capital according to the Estonian model. Accounting methods for elements of the tax base for withdrawn capital was proposed for Ukrainian enterprises. The expediency of dividing all operations into two groups was proved: operations on the withdrawal of capital; operations equivalent to capital withdrawal operations. The accounting for such operations proposed in the article allows collecting the necessary amounts in tax accounting to form the tax base, which will be displayed in the tax declaration. Author's attention is focused on the problematic aspects of determining and disclosing the tax on withdrawn capital in the accounting and reporting of Ukrainian enterprises.