The President of Ukraine signed the Law of Ukraine “On Audit of Financial Reporting and Auditing” of 21.12.2017, No. № 2258-VIII, which will enter into force on 01.10.18. It, in particular, stipulates:
- establishing a Public Oversight Body that will oversee the quality of the audit services provided;
- increasing the requirements for auditors who will check the enterprises of social importance;
- establishing a new procedure for certification of auditors;
- introduction of a mechanism for insurance of professional liability of auditors to third parties;
- creation of a single register of auditors and audit entities.
The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to paragraph 1 of the Procedure for the Referral of Children to Children’s Recreation and Recreation Facilities at the Expense of State Budget Funds” of 31.01.18, No. 42, which changed the Procedure for sending children to health care and recreation facilities at the expense of the state budget.
In particular, the list of categories of children who require special social attention and support is expanded. From now on, children who live in settlements located on the line of collision, native children of parent-parents or adoptive parents living in one family-type home or in one foster family, children taken into account due to difficult life circumstances will have the right to receive a privilege trip to children’s recreation facilities.
In addition, children with disabilities, children living in settlements on the line of collision, and children who are registered due to difficult life circumstances, now have the right to rest at the expense of the state budget as a matter of priority.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Recognition of Accounts Receivable as Bad Debt” of 24.01.18, No. 269/6/99-99-15-02-02-15/ІПК clarified when the funds held on the current bank account that was liquidated could be considered as a bad debt for tax purposes.
The main condition for meeting such indebtedness with bad debt according to 14.1.11 of TCU is the presence of a record in the USR on the state registration of the termination of such a legal entity. That is, the corresponding document confirming the termination of the debtor’s bank as a legal entity in connection with its liquidation.
In the presence of such a confirmatory document, a company that applies correctional differences may reduce the financial result in accordance with para. 139.2.2 of TCU.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On Dividend Taxation” of 29.11.17, No. 2758/6/99-99-13-02-03-15/ІПК clarified the procedure for taxation of dividends paid by a resident of Ukraine to an individual − resident of Germany (subject to the provisions of the international agreement). According to the representatives of the fiscal department, in Ukraine such dividends are taxed by the income tax at a rate of 5% and the war tax at a rate of 1.5%.
At the same time, when the payment of dividends to a non-resident-individual, the repatriation tax under para. 141.4.2 of TCU is not withheld.
The State Financial Monitoring Service of Ukraine by its Order “On Approval of the Types of Legalization (Laundering) of the Proceeds from Crime, Terrorist Financing and Financing the Spreading of Weapons of Mass Destruction in 2017” of 22.12.17, No. 186, approved the typology of legalization (laundering) of proceeds from crime by terrorist financing and financing the spreading of weapons of mass destruction in 2017. This document should be useful to the subjects of financial monitoring (first of all − financial institutions), which monitor the operations of money laundering and the financing of crime and terrorism.
Among other things, there are indications of schemes for the illegal transfer of cashless cash, as well as in general for money laundering schemes and terrorist financing.
As for the participants of the financial transactions:
- registration of the company on the nominee name (without a certain place of residence, mentally ill, students, elderly people, foreigners, convicts, deceased persons, under purchased, stolen or lost documents);
- one person alone is the founder, manager and accountant of the company (sole founding staff);
- founders are persons living in a region that is different from the region of registration of the subject;
- founders are those registered in uncontrolled territories of Ukraine or in the zone of delimitation of the conflict (ORDLO zone);
- frequent change of founders, owners, officials of the subject of business, impossibility of establishing the location of officials (manager, chief accountant);
- small authorized capital;
- offices of business entities are registered at the place of mass registration of such entities;
- coincidence of the registration address of participants in transactions;
- newly created business entities (so-called “one-day”, “holes”, “butterflies” tend to be within the same tax period, which complicates the ability to control their activities);
- business entities submit tax reporting with a minimum income or high income, but with a negligible amount of taxes paid.
Regarding financial and economic activity of participants of financial transactions:
- daily turnover of funds is usually increased at the end of the week, or there is no money left in the day-to-day or morning everyday or their amount is substantially reduced;
- presence of a large number of signed forms of the same type of contracts for the execution of works or services, estimates, acts of acceptance, etc.;
- use of multilateral payments and payments with a large number of participants in such transactions, located in different territorial units or registered at one address;
- lack of cash flow of an entity on bank accounts or very large volume of financial transactions of a newly created company.
Regarding the content of financial transactions:
- confusing or unusual nature of a commercial transaction that has no economic sense or obvious legitimate purpose;
- inconsistency of the transaction of the entity’s business, stipulated by the statutory documents;
- large amount of cash received from commercial activity, which is not characterized by the intensity of cash transactions;
- payment of a penalty (fine) for non-performance of the contract of delivery of goods (performance of works, provision of services) or for violating the terms of the contract, when the amount of the penalty exceeds 10% of the amount of non-delivered goods (unexecuted works, unsatisfactory services);
- amounts on which financial transactions do not correspond to the property (financial) state of the client.
The Ministry of Justice of Ukraine launched the unified register of non-payment of alimony. This is reported on the Government portal. All non-payers of alimony will fall into this category, and its information is open and accessible to everyone.
In addition, starting February 6, new leverage will be applied to malicious non-payers of alimony, that is, those who have owed alimony for the amount of 6 months. Namely:
- their administrative responsibility to be strengthened;
- a temporary restriction was imposed on the personal non-property rights of the debtor: the right of departure outside Ukraine, the right to drive vehicles, the right to hunt, the right to use firearms hunting, pneumatic and cooled weapons, devices for shooting cartridges equipped with rubber or similar in their properties, metal non-lethal projectiles.
The Ministry of Agrarian Policy and Food of Ukraine by its Order “On approval of unified forms of acts, which were prepared on the basis of planned (unscheduled) measures of state supervision (control) in the areas of seed and seedling, protection of rights to plant varieties” of 29.12.17, No. 709 approved unified forms of acts, which are made on the basis of planned (unscheduled) inspections in the spheres of seed and seedling, protection of rights to plant varieties.
The forms of documents contain a list of issues that will be of interest to the controllers of the State Committee for Consumer Goods and Consumer Protection. In particular, in the field of seed and seedling, it will be checked whether the business entity:
- included in the Register of seed and seedlings subjects;
- produces seeds or seedlings;
- observes the proprietary rights of intellectual property to a plant variety under such production;
- not included in the Register, but realizes seed and planting material in the presence of certificates and observes the proprietary rights of intellectual property to plant varieties;
- keeps the packaging, labelling, transportation and storage of seeds;
- preserves duplicates of seed samples and seedlings during the validity period of the certificate;
- maintains and keep seed documentation for each variety;
- adheres to the procedure for coordinating the location of seed crops, etc.
In the field of plant variety rights, it will be checked whether the company complies with:
- personal non-proprietary right of authorship to a plant variety;
- proprietary intellectual property rights for plant varieties and distribution of the variety;
- rights of prior use;
- order of acquiring rights to a plant variety;
- transfer (alienation) of property rights to a variety;
- right to use the variety;
- liabilities of use of the name of the variety, etc.
The National Securities and Stock Market Commission (hereinafter − NSSMC) adopted the Resolution “On Approval of the Procedure for Supervision of the Registration of Shareholders, holding of general meetings, voting and summing up its results at the general meeting of joint stock companies” of 19.12.17, No. 904 approved new rules of supervision by registration of shareholders, holding of general meetings, voting and summing up of its results.
Such supervision will be carried out by representatives of NSSMC. A control group will be formed for this purpose.
In case of need, such joint stock company will be notified in writing before the registration of shareholders for participation in the general meeting on the appointment of representatives of the NSSMC. If it is convened an extraordinary general meeting of shareholders who own 10% or more of the company’s ordinary shares, they will also notify the depositary institution.
During the supervision, the NSSMC representatives have the right to:
- enter without hindrance the places where the general meeting is held, the registration of shareholders, the voting and summing up of its results, on the official identity card;
- access to documents and other materials necessary for supervision;
- require the submission of written explanations, documents (duly certified copies), extracts, extracts from the relevant documents required by the NSSMC at the time of supervision, and other information in the officials of the joint-stock company and/or persons authorized to convene a general meeting, holding registration of shareholders (their representatives), holding of general meetings, voting and summarizing of its results at general meetings of joint-stock companies and / or shareholders (their representatives) in connection with the implementation of their supervisory powers.
Information on the results of the supervision carried out, in particular the list of violations detected, recommendations on preventing violations of shareholders’ rights during the registration of shareholders, general meetings, voting and summing up of its results at general meetings, within 10 working days from the date of supervision, should be sent to the joint-stock company and/or the depositary institution.
