The Law of Ukraine “On Amendments to the Tax Code of Ukraine and Certain Legislative Acts of Ukraine on tax reform” of 28.12.2014, № 71-VIII. came into force.
The Law abolished almost all the benefits on the income tax, which were established by the Article 154, paragraphs 15 – 22, Subsection 4 and Section XX of the TCU in the old edition. In addition, the preferential tax rates are canceled: 5% for the IT industry entities and 0% for priority investment projects. There is only benefit for enterprises and organizations, which are established by the public organizations of disabled people (Art. 142 of TCU).
There is zero tax rate in the so-called “tax holidays” before January 1, 2016 for those taxpayers whose net operating income of products, goods, works and services according to the financial reports for the last annual reporting period does not exceed UAH 3 million and that meet a number of criteria established by p. 16, Subsection 4, Section XX of the TCU. Previously those tax holidays for the small businesses were introduced by the paragraph 154.6 of the TCU in the old edition.
From 1 January 2015 the pension fee is paid only by the individuals when buying foreign currency, those individuals who carry out the transaction on purchases of foreign currency in cash form (except the transactions on purchase of foreign currency to repayment of credits). The pension fee is not charged in case of purchasing of foreign currency in non-cash form.
The pension fee rate is increased to 2% from the previous 0, 5%.
Interestingly, the law does not require the single declaring of the money, property and currency values by the individuals. There are not indirect methods of control of expenditure and incomes of the taxpayers – individuals.
The legislative officers again extended the period of the benefit validity on the supply transactions of the cereal crops of commodity items 1001-1008 and industrial crops of commodity items 1205 and 1206 00 according to UCG FEA (with the exception commodity items of the category 1006 and sub-category 1008 10 00 00 UCG FEA).
But in contrast to the last year, the effect of this benefit was extended to export transactions of these goods without additional strings.
The application conditions of the cereal VAT benefit remained the same in other respects.
The amendment was made to the Art. 24 of Labour Code by the Law, according to which an employee should not be allowed to the work without:
1) conclusion of employment agreement, issued by the orders or regulations of the owner or the authorized body;
2) notification of the SFS in accordance with the procedure established by the Cabinet (it has not approved yet).
The employers (legal entities and individuals-entrepreneurs) may face the severe sanctions for noncompliance of these requirements – a fine at a rate of 30 minimum wages for each unregistered employee (p.2 of Art. 265 of LC as amended).
The moratorium on controlling agency inspections is extended for another six months by the paragraph 8 of the concluding provisions of the Law. According to this norm any inspections during January-June 2015 should be carried out only upon the authorization of the Cabinet or on the enterprise request. However, the moratorium would not apply to the tax authority inspection, as it was in 2014.
At the same time, a similar moratorium on the tax authority inspections is imposed for two years by p.3 of the Law. It concerns tax audits of enterprises, institutions, organizations and self-employed individuals with the income volume not exceeding UAH 20 million for the previous calendar year. The taxmen are entitled to inspect them only upon the Cabinet permission, upon the initiative of such entities as well as under the court decision.
This restriction does not apply to:
from 1 January 2015:
- the inspections of the business entities, who import and/or produce and / or sell excisable goods into the customs territory of Ukraine;
- the inspections of the compliance with legislation on the availability of licenses, completeness of the calculation and payment of personal income tax, unified social tax and VAT refund;
from 1 July 2015:
- the inspections of the single tax payers of the second and third (self-employed individual) groups, which carry out the activity in the markets, the goods sale in small retail trade network through the mobile network (except the single tax payers), on the Compliance of the application of PPO.
The restrictions on the inclusion of the daily expenses into the tax expenses have been abolished by the introduced Law since 1 January 2015 due to the new procedure of the determining of the taxable income. Now, the business trips expenses are reflected in the tax accounting according to the accounting records.
The previous restrictions remain for the withholding of the PIT. Thus, the business trip expenses, not confirmed by documents, food and finance of other self-consumption needs of the individual (daily expenses) are not included in the taxable income of the PIT payer:
- within the territory of Ukraine - no more than 0.2 minimum wage rate established by law as of January 1 of the tax (reporting) year, as per each day of such trip;
- for business trips abroad – not higher than 0.75 minimum wage rate.
The Article 39 of the Tax Code of Ukraine in the new edition did not describe the transactions with the residents - related parties as controlled, who had a special tax status (declared negative value of financial result and / or VAT or did not pay these taxes), as it was in the old edition.
In other words, now only the transactions with the non-residents are the controlled transactions. However, the range of such transactions and those who implement them is considerably expanded.
The Single tax payers of the third - sixth groups, who were registered in the control bodies before January 1, 2015, are considered to be the Single tax payers of the third group from 1 January. This norm appeared in subsection 8 of section XX of the TCU due to the entry into force of the specified Law. Therefore, the single tax payers do not need to re-register.
Let us recall that the Law introduced four groups of the single tax payers instead of six: group 1 - fixed single tax rate for the individuals is established within limits to 10% of the minimum wage, that is, to UAH 121.80 per calendar month. The marginal revenue is UAH 300 thousand.;
group 2 - fixed single tax rate for individuals is established within limits to 20% of the minimum wage, that is, to UAH 243.60 per calendar month. The marginal revenue is up to UAH 1.5 million.;
group 3 - single tax rates for individuals and legal entities are 2% (under condition of separate VAT payment) and 4% (when including VAT into the single tax). The marginal revenue is UAH 20 million.;
group 4 is the equivalent of the former fixed agricultural tax.
