According to clause 177.2 of the Civil Code, the subject of taxation is the net taxable income, i.e. the difference between the total taxable income (revenue in monetary and non-monetary form) and documented expenses related to the economic activity of such a natural person – an entrepreneur.
The total taxable income includes income received by an individual entrepreneur both in cash and in kind, namely:
- revenue in the form of non-cash funds received in a bank account, or in cash directly to the entrepreneur or his employees at the place of settlement (including bank interest);
- revenue in kind (non-monetary form);
- amounts of fines and penalties received from other business entities under civil law contracts for violation of the terms of the contracts, and other incomes related to the implementation of business activities.