The Ministry of Finance of Ukraine, by Order No. 396 of July 17, 2023, approved changes to the Procedure for Accounting of Taxpayers and Fees, approved by Order of the Ministry of Finance No. 1588 of December 9, 2011. It is brought into compliance with the following documents:
- ‘On Amendments to the Budget Code of Ukraine’ No. 2042-IX of February 15, 2022;
- ‘On Amendments to Certain Laws of Ukraine Regarding Regulation of the Legal Regime in the Temporarily Occupied Territory of Ukraine’ No. 2217-IX of April 21, 2022;
- ‘On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine Regarding Payment Services’ No. 2888-IX of January 12, 2023.
In particular, it is proposed to review some provisions of the Accounting Procedure and the orders of the Ministry of Finance regarding the accounting of payers located in temporarily occupied territories.
The peculiarities of accounting for taxpayers whose tax address is the temporarily occupied territory of the Autonomous Republic of Crimea and the city of Sevastopol or the temporarily occupied territory in the Donetsk and Luhansk regions have been defined. In connection with the changes introduced by Law No. 2217-Х, the signs by which taxpayers are registered in the Unified Data Bank of Legal Entities or the Register of Self-Employed Persons: ‘tax address is the temporarily occupied territory of the Autonomous Republic of Crimea and the city of Sevastopol’ and ‘tax address is a temporarily occupied territory in the Donetsk and Luhansk regions’, are brought into compliance with the legislation.
In addition, the rules for opening accounts in banks and other financial institutions will be supplemented by similar rules for opening accounts with non-bank payment service providers or electronic wallets that are issuers of electronic money.
The provisions of Section II and certain items of other sections of the Accounting Procedure regarding the tax number are brought into line with the new wording of Item 63.6 of the Tax Code.
The provisions of the Accounting Procedure regarding the payment of taxes and fees in the event of a change in the location of the business entity have been clarified. In particular, it is noted that in the event of a change in the location of the business entity and its registration as a taxpayer at the new location, the payment of national taxes and fees determined by the tax legislation, which are distributed between the state and local budgets, and local taxes and fees is carried out at the place of the taxpayer’s previous registration taxes before the end of the current budget period.
The duplication of procedures has been eliminated and it has been established that the registration of a foreign company in the event that the only and first reason for registration is the foreign company's acquisition of the status of a tax resident of Ukraine is carried out in accordance with the Procedure for registration and deregistration of a foreign company as a tax payer on the profit of enterprises with the status of a tax resident of Ukraine, approved by the order of the Ministry of Finance No. 663 of December 13, 2021.
It will be possible to submit an application on form No. 8-ОПП personally by the taxpayer or a representative authorized for this, as well as send it by mail or submit it in electronic form.
Simplification of the application form for registration of a non-resident or separate subdivision (form No. 1-ОПН) is foreseen.
In addition, the order made changes to the forms of annexes to the Accounting Procedure:
- appendix 2 ‘Certificate on registration of a taxpayer whose information is not subject to inclusion in the Unified State Register’;
- appendix 5 ‘Application for legal entities and separate subdivisions’ (form No. 1-ОПП);
- appendix 6 ‘Application of a non-resident (for a foreign legal company, organization or its separate subdivision)’ (form No. 1-ОПН);
- appendix 12 ‘Notice of registration/removal from registration of a taxpayer’ (form No. 11-ОПП);
- appendix 14 ‘Application for liquidation or reorganization of the taxpayer’ (form No. 8-ОПП).
The Verkhovna Rada of Ukraine has adopted in its entirety Law ‘On Amendments to Certain Laws of Ukraine on Defining the Procedure for Submission of Declarations by Persons Authorized to Perform the Functions of the State or Local Self-Government in Martial Law’ (reg. No. 9534).
The act was adopted for the purpose of legal regulation of the process of resuming the submission of relevant declarations and conducting a special inspection during martial law, as well as simplifying the procedure for submitting declarations.
From now on, persons who in 2022-2023 did not submit a declaration of a person authorized to perform the functions of the state or local self-government must submit declarations no later than 90 calendar days from the date of entry into force of this Law.
Declaring subjects who carry out tasks in the interests of the national security and defense of Ukraine, take direct part in the conduct of military operations and receive additional remuneration for the period of martial law or are in temporarily occupied territories, submit the relevant declaration in the following terms:
- within 90 days from the date of determination of the date of the end of hostilities or the date of determination of the date of the end of the temporary occupation in the territories where the person is located;
- within 90 days from the day of return to the point of permanent deployment or place of permanent work;
- within 90 days from the date of termination of authority or transfer of a person to positions that do not involve direct participation in combat operations, execution of combat tasks, strengthening of state border protection, conducting intelligence activities, counter-intelligence operations, or operative-research activities;
- within 90 days from the date of termination or cancellation of martial law.
The National Bank of Ukraine by Resolution No. 110 of September 5, 2023 ‘On the Approval of Amendments to the Regulation on Implementation of Financial Monitoring by Banks’ introduced new requirements for implementation of financial monitoring by banks. Innovations will help increase the effectiveness of financial monitoring measures and create conditions to help reduce the risks of money laundering/terrorist financing and other illegal activities.
New requirements:
1) banks are required to respond to cases of exceeding the maximum amount of financial transactions declared by the client. Such a requirement does not apply to customers – natural persons who carry out ordinary financial transactions for amounts and in a volume that have a rational justification;
2) the list of indicators of suspicion related to the client's financial transactions was supplemented, namely the exceeding of the maximum amount of financial transactions declared by the client before the establishment of business relations/updated during servicing, and unusual activity on the client’s accounts more than twice a month.
In addition, clarifications have been made to the procedure for proper verification by banks of clients who are electronic residents (e-residents), in terms of identification and verification. Procedures for remote establishment of business relations by e-residents are also regulated.
The National Bank of Ukraine by Resolution No. 108 of September 5, 2023 ‘On Amendments to the Regulation on Implementation of Financial Monitoring by Institutions and Recognition as Having Lost the Validity of Resolution of the Board of the National Bank of Ukraine No. 145 of December 17, 2021’ regulated certain issues of provision by non-bank financial institutions proper application of a risk-oriented approach to clients who are politically exposed persons (PEPs).
Institutions should move away from a formal approach to determining the risk level of PEPs and will be held accountable for inappropriately applying a risk-based approach to clients who are PEPs. In each individual case, the institution’s assignment of any level of risk to PEPs must be properly justified.
This approach will help prevent institutions from setting an unreasonable level of risk and unjustifiably denying services to such clients.
The National Bank also eased certain norms regarding the institutions’ measures regarding sources of income (wealth) of PEPs and sources of funds related to their financial operations. Thus, the limits on the volume of financial transactions carried out by PEP through the institution have been increased from UAH 200,000 per quarter to UAH 400,000 per month, which is one of the conditions for not taking measures to establish the sources of income (wealth) of PEPs.
The Cabinet of Ministers of Ukraine has approved draft Law ‘On Amendments to Certain Legislative Acts of Ukraine Regarding Mandatory State Social Insurance’.
The draft law proposes to amend a number of legislative acts of Ukraine in order to bring them into line with Law of Ukraine ‘On Amendments to Law of Ukraine ‘On Mandatory State Social Insurance’ No. 2620-IX of September 21, 2022 and Law of Ukraine ‘On Mandatory State Pension Insurance’, which provide for the termination of the activities of the Social Insurance Fund of Ukraine and the departments of the Executive Directorate of the Fund from January 1, 2023 and the performance of functions in the field of mandatory state social insurance in connection with the temporary loss of working capacity and mandatory state social insurance from an accident at work and occupational disease, which caused the loss of working capacity, by the Pension Fund of Ukraine and its territorial bodies.
In addition, it is proposed to make changes to Law of Ukraine ‘On the Nature Reserve Fund of Ukraine’, which would exclude the norms with reference to the previously valid legislation and determine that the officials of the state protection service of the nature reserve fund are subject to mandatory state social insurance in accordance with the legislation on mandatory state social insurance, etc.
