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Penalties for not recording cash in hand in the books abolished

Decree No. 418/2019 of the President of Ukraine abolishing penalties for violating the regulations on the circulation of companies’ cash in hand entered into force on June 23, 2019.  This means that Ukrainian enterprises are no longer required to pay penalties for:

  1. Exceeding the limits set for cash in hand. This violation used to be subject to a penalty of twice the amount exceeding the limit set for cash in hand for each day of violation;
  2. Not recording (incomplete and/or late recording) of cash in hand in the books. This violation used to be subject to a penalty of five times the unrecorded amount;
  3. Spending money from the proceeds from the sale of products (work, services) and other cash receipts (except for funds received from banks) to make payments related to labor remuneration (except for extraordinary (urgent) circumstances, social payments) in case of tax liability.  This violation used to be subject to a penalty in the amount of the payments made;
  4. Failing to meet the deadlines for use of cash expense advances and for cash advances without full reports for funds issued in advance. This violation used to be subject to a penalty of 25% of the issued expense advance amounts;
  5. Paying in cash if the recipient of funds fails to submit any payment document (receipt or cash register receipt, pay-in slip, other written document) confirming cash payment. This violation used to be subject to a penalty in the amount of the payments made;
  6. Inappropriate use of cash received from banks.  This violation used to be subject to a penalty in the amount of the cash used.

The State Fiscal Service of Ukraine will not therefore be able to impose any of the above penalties even if the above violations were committed before the repeal of Decree No. 436 of the President of Ukraine dated June 12, 1995.
 
Cash transactions are nonetheless also governed by Regulations No. 148 on Cash Transactions in National Currency, and failure to comply with these regulations will be subject to administrative liability:

  • A fine from 100 to 200 non-taxable minimum incomes, i.e. from UAH 1,700 to UAH 3,400 will be imposed on companies for exceeding the limit amounts for cash settlements and for non-compliance with the law requiring to ensure that it is possible to pay for goods (services) using electronic means of payment;
  • Repeated violation in a year will be subject to a fine from 500 to 1,000 non-taxable minimum incomes, i.e. from UAH 8,500 to UAH 17,000.

Such important issue as the regulation of cash transactions could obviously not be left out by the government. This is precisely why the Cabinet of Ministers of Ukraine is already working on a bill that will regulate the circulation of cash in hand and provide for new penalties. Companies therefore need to be as careful as possible and consider that any violations will be subject to the law in force at the time of their detection.

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