The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to the Tax Code of Ukraine and Certain Legislative acts of Ukraine on providing of balance of the budget revenues in 2016” of 24.12.2015, № 909-VIII, which amended the Tax Code of Ukraine (hereinafter - TCU).
Let us say a few words about the main amendments, which are valid from 1 January 2016.
PIT
In general, 18% of income tax should be withheld from incomes accrued from 01.01.16. Progressive taxation is annulled by the income tax.
Sub-paragraph 169.1.1 of TCU directly states that the amount of total social tax benefits equals to 50% of living minimum wage for able-bodied person (per month), established by law on January 1 of the tax year. The living minimum wage for able-bodied people was established at the level of UAH 1 378 on 01.01.16.
Income amount limit for the applying of social tax benefits in 2016 should be equal to UAH 1 930. When applying of benefits for children under sub-para. 169.1.2 and sub-sec. “a” and “б” of paras. 169.1.3 of TCU, such a maximum value should be increased in multiplies of the number of children to one of the parents, single mother (father), guardians, trustee.
Unified tax
New rates of the unified tax are in force for the third group of unified tax payers from 1 January 2016 (paras. 1, 2 of para.. 293.3 of TCU):
- for VAT payers – 3% of received income amount of unified tax payer;
- for non-VAT payers – 5% of received income amount of unified tax payer.
The maximum amount of income volume for the calendar year also to be amended that allowed legal entities or individual-entrepreneurs to work in the third group. It was reduced from UAH 20 million to UAH 5 million per calendar year (sub-para.3 of para.291.4 of TCU).
The rates of the unified tax for the fourth group also were increased.
Unified Social Contribution
It is not required to withhold the unified social contribution from wages, sickness benefit and maternity, remuneration for work or services under civil law contracts. The unified social contribution remains only in the form of “extra” accruals. In other words payments in the system of social insurance “fall” exclusively on employers.
From 1 January 2016 the accrual rate for all incomes taxable by the unified social contribution - wages, sickness benefit and maternity, remuneration for work or services under civil law contracts, financial support - for all policy holders is the same now - 22%.
The unified social contribution rate of 22% should not be in effect in cases for which the lower rate was established. The unified social contribution should be accrued at special rates:
- for wages, sickness benefit and maternity of disabled employees - 8,41%;
- for wages, sickness benefit and maternity of disabled people, who work at companies and in organizations of public organizations of invalids, where the number of disabled is not less than a half of total employment, and their payroll budget is not less than a quarter of labor costs - 5.5%;
- for wages, sickness benefit and maternity, remuneration for work or services under civil law contracts of all people, who work (do works, provide services) at companies and in organizations of all Ukrainian public organizations of disabled, including Ukrainian Society of the Deaf and Ukrainian Society of the Blind, invalids, where the number of disabled is not less than a half of total employment, and their payroll budget is not less than a quarter of labor costs - 5.3%.
VAT
The amounts of retail excise are directly excluded from the tax base in para. 188.1 of TCU. Therefore, when the sale of goods, subjects to retail excise, the VAT payer should calculate VAT from agreed cost without excise.
In addition, the minimum base for VAT accrual when transactions of delivery of independently manufactured goods/services is regular price (see para.14.1.171 of TCU). During 2015 the minimum base was their cost.
The lower limit remains at purchase price for purchased goods/services, and for non-current assets - net assets value according to the accounting, established at the beginning of the reporting (tax) period.
Transport Tax
In general, from 01.01.2016, the transport tax should be paid by owners of cars aged less than 5 years, which average market value is more than 750 minimum wages established by the law on January 1 of the tax (reporting) year (sub-para. 267.2.1 of TCU). It is UAH 1 033 500 now (as of 01.01.16 minimum wage is UAH 1378).
The average market price should be determined by the Ministry for Economic Development of Ukraine under method approved by the Cabinet of Ministers. In addition, should be taken in account the vehicle brand, model, year of manufacture, engine type, engine cylinder volume, type of gearbox, mileage of a car.
Information on the average market price of the vehicle should be released on the website of the Ministry for Economic Development of Ukraine (www.me.gov.ua).
Company Income Tax
The tax (reporting) period for income tax is amended, when its payers are required to file their declarations and accordingly to pay tax obligations declared there. So from 01.01.16 this period is calendar quarter and year.
Annual tax (reporting) period should be applied by:
1) new income tax payers;
2) producers of agricultural products determined by Art. 209 of TCU;
3) companies, which annual income from any activity (excluding indirect taxes), determined according to the accounting rules for the previous tax year (reporting) period, does not exceed UAH 20 million.
The quarterly tax (reporting) period should be applied by the income tax payers, which annual income determined according to the accounting rules (excluding indirect taxes) for the previous annual accounting period, does not exceed UAH 20 million.
From 01.01.16, the income tax payers are not required any more to pay monthly advance payments. According to the paragraph 9 of sub-section 4 of sec. XX of TCU in January - December 2015 the taxpayers are required to pay monthly advance payments from the income tax under para. 57.1 of TCU in the version that was in force to 01.01.15. Since 1 January 2016, the monthly advance payments from company income tax should not be paid.
It should be additionally noted that para.38 of sub-sec.4 of sec. XX of TCU stated that the company income tax payers should pay to 31 December 2016 the advance payment from the tax in the amount of 2/9 of income tax accrued in the tax accounting for three quarters of 2016.
The calculation of such an advance payment should be submitted by the taxpayer in a tax declaration for three quarters of 2016. The amount of advance payments determined in calculation is considered to be agreed amount of monetary obligations.
Therefore, mentioned above advance payment from income tax should be paid by only income tax payers, which would report quarterly in 2016 (para. 137.4 and para. 137.5 of TCU). The amount of advance payment - 2/9 from the income tax accrued in declaration for three quarters of 2016. The deadline for payment of the advance payment is December 30, 2016.
The Cabinet of Ministers of Ukraine by its Resolution “On amendments to paragraph 1 of the Procedure of payments to the state budget of net profit (income) by the state unitary enterprises and their associations” of 30.12.2015, № 1156 made amendments to the Procedure of payments to the state budget of net profit (income) by the state unitary enterprises and their associations.
The previous sizes of the share 30% and 15% were removed, and one was established – in amount of 75%. Thus, the state unitary enterprises and their associations are required to transfer to the state budget 75 percent of net profit for the corresponding period.
