How to report and pay taxes after changing your address?

After changing the primary place of tax registration in the middle of the year, a “tax gap” arises: part of the obligations already shifts to the new tax authority, while others remain tied to the old address until the end of the year, which often leads to mistakes, penalties and blocking of tax invoices.

Tax address and primary place of registration

The tax address of an individual is the place of residence at which they are registered with the tax authority. For a legal entity, the tax address is its registered office as recorded in the Unified State Register, and this is what determines which tax authority will be primary for that taxpayer.

A change of the taxpayer’s location or place of residence automatically entails an update of their registration data with the tax service based on the Unified State Register data or an application submitted using forms No. 1-ОПП / No. 5-ОПП to the new authority. At the same time, until the end of the current budget period, the taxpayer continues to be registered with the attribute of paying taxes and fees at the “first” address at which they were registered at the beginning of the year.

The “old taxes – old address” principle

The Budget Code establishes the principle that when the location changes, state-wide taxes are paid at the place of previous registration until the end of the current year, and starting from 1 January of the following year — at the new address. If during the year the taxpayer changes address several times, for tax payment purposes until 31 December the address at which they were registered at the beginning of the year is taken into account, while the latest address starts to apply for servicing from the new budget period.

Where to file tax returns

The approach to reporting is more “dynamic” than to payment: for a number of taxes and fees, including some sole proprietors’ reports, after changing the tax address, returns are already filed to the new authority, even if payments are still made using the old bank details. The combined personal income tax and social security contributions reporting for employees is also filed to the tax authority at the new place of registration. At the same time, VAT returns during the year are filed at the place of previous registration, and from 1 January of the following year — at the new location, so the “old” filing place applies until the end of the year, and the new tax authority starts servicing from the new budget period.

Where to pay taxes and fees

Taxes that are distributed between the state and local budgets (personal income tax, part of rent payments, etc.) are paid until the end of the year at the taxpayer’s previous location, even if the new tax authority is already receiving their returns, while payments are credited to local communities’ budgets according to the territorial code (KATOTTG) of the old address. In the case of multiple address changes during the year, the tax payment “marker” still remains with the territory where the taxpayer was registered at the beginning of the year, and from the next budget period payments are made under the latest address, which is especially important for taxpayers with significant amounts of personal income tax and other “local” taxes.

Practical points for sole proprietors and legal entities

For sole proprietors who change their tax address by moving to another community, the new tax authority becomes the primary place of registration, while the previous tax office remains as a secondary one until the end of the year; during this period, returns are filed to the new authority, but certain taxes “for themselves” and for employees may still be paid using the old bank details in line with tax authority clarifications and budget rules. Legal entities must additionally take care of re-registering cash registers (RRO/PRRO), licenses and other permits, and promptly update information on their branches and tax payment location to avoid disputes with the tax authorities over the “wrong” local community receiving the payments.

Typical risks and how to minimize them

The main risk is the “mismatch” between the place of filing returns and the place of actual payment, when returns are already submitted to the new authority, but funds are mistakenly transferred using the new address details instead of the old ones until the end of the year. In the best-case scenario, this leads to the need to clarify the budget account details and transfer funds, and in the worst case — to tax arrears at the “old” address, fines and interest.

To minimize risks, the taxpayer should carefully monitor changes in their registration status with the tax service, check the current treasury account details of the relevant community according to the territorial code (KATOTTG), formally document address changes and keep correspondence with the tax authorities on reporting and payment procedures. It is also advisable to analyze whether there are any special rules for filing and paying “your” taxes when the place of registration changes, as is the case, for example, with VAT.

If you have any questions or issues related to changing your primary place of tax registration, the procedure for filing returns or paying taxes at the old and new address, we recommend seeking individual advice to analyze your specific situation and minimize tax risks.

Author: Ihor Yasko, Managing Partner of the law firm “WINNER”, PhD in Law.