The necessary conditions for a person to pay a single contribution to mandatory state social insurance are:
● conduct by such a person, in this case, of independent professional advocacy;
● receiving income from such activities.
At the same time, the Certificate of the right to practice law only certifies the lawyer's right to practice professional activity, but is not evidence of the person's practice of law.
This is stated in the decision of the Supreme Administrative Court of Ukraine in case No. 520/6094/19 dated November 18, 2021.
The essence of the case: the lawyer filed a lawsuit with the DPS in which he asked to declare the individual tax consultation illegal and to cancel it. In support of the claims, he pointed out that the disputed tax consultation contradicts the requirements of the Tax Code and violates his rights, since during the disputed period he was engaged in teaching activities under an employment contract, and the validity of the Certificate of the right to engage in advocacy was suspended. Instead, the tax advice provided by the supervisory authority actually involves an additional tax burden on the claimant and double taxation.
By the decision of the local court, which was left unchanged by the decision of the appeals court, the claim was satisfied in full.
The panel of judges of the CAS of the Supreme Court agreed with the conclusion of the courts of previous instances, stating the following.
In accordance with Articles 31 and 32 of the Law of Ukraine "On Advocacy and Advocacy" dated July 5, 2012 No. 5076-VI, the right to engage in advocacy is suspended in the event that a lawyer submits an application to suspend advocacy from the date of submission to the regional bar council at the address of the attorney's workplace corresponding application. During the period of suspension of the right to engage in advocacy, the advocate does not have the right to practice it. Such a lawyer also cannot participate in the work of self-governing bodies of lawyers, except for cases when such right is suspended in connection with the appointment of a person to a position in a state authority by the Congress of Lawyers of Ukraine. Information on the suspension of the right to practice law is entered in the Unified Register of Lawyers of Ukraine.
From the above provisions of Law No. 5076-VI , the courts summarized that the legal consequence of the suspension of the right to engage in advocacy is the impossibility of engaging in advocacy for a certain period of time, while the consequence of the termination of the right to engage in advocacy is the impossibility of its further exercise at all, in as a result, the license to practice law is cancelled. In this way, the legislator distinguishes between the suspension and termination of the right to practice law.
The concepts of "suspension" and "termination" of advocacy activities have a different legal nature, and, accordingly, are not identical, given the different procedural nature and specifics of application, in connection with which the courts came to the conclusion that the effect of the provisions of the Procedure for accounting for payers of a single contribution to the mandatory state social insurance, approved by the order of the Ministry of Finance of Ukraine dated November 24, 2014 No. 1162 , which regulates the specifics of the termination of independent professional activity with the corresponding obligations, does not extend to legal relationships in which the lawyer's activity was stopped, as in the controlling body insists on this.
Thus, from the data of the Extract from the Unified Register of Lawyers of Ukraine, the courts of previous instances found out that the plaintiff's right to practice law was suspended on the basis of paragraph 1 of the first part of Article 31 of Law No. 5076-VI from January 24, 2018, on the basis of the corresponding application. Starting from the specified date, the plaintiff did not carry out legal activities and did not receive income from such activities, since he did not have all the legally defined grounds for its implementation, which indicates in favor of the conclusion that he does not have an obligation to pay a single contribution as a self-employed person in the sense of the current legislation.
From the information contained in the record cards of the Pension Fund of Ukraine about the insured person of the plaintiff (forms OK-7, OK-5), the courts found that the only contribution for him during the period of suspension of his legal activity was paid by his employer – the Ukrainian Engineering and Pedagogical Academy . This circumstance is also confirmed by the extract provided by the plaintiff from the Register of insured persons of the State Register of mandatory state social insurance of the Pension Fund of Ukraine.
The Supreme Court in its rulings dated November 5, 2018 in case No. 820/1538/17 , dated November 27, 2019 (case No. 160/3114/19) and dated March 5, 2020 (case No. 824/509/19-а) examined the problems of the administration of Law No. 2464-VI of a single contribution when an individual is in employment at the same time and has the right to carry out independent professional activity, which the person does not actually carry out, and in his decisions noted that a person who carries out independent professional activity , in particular a lawyer's, is considered a self-employed person and is obliged to pay a single contribution only on the condition that such a person is not an employee. The presence of a person's Certificate of the right to engage in advocacy only certifies his right as a lawyer to carry out independent professional activities, but is not proof of direct practice of advocacy and receiving income from such activities.
Taking into account the circumstances established in this case and the above-mentioned legal position of the Supreme Court, the panel of judges believes that the defendant's interpretation of the provisions of the legislation, set out in the individual tax consultation, regarding the plaintiff's obligation to pay a single contribution as a self-employed person, is wrong.