The State Tax Service of Ukraine has reminded that Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine Aimed at Providing Additional Social and Economic Guarantees in Connection with the Spread of Coronavirus Disease (COVID-19)” No. 540-IX of March 30, 2020 expands the list of expenses that taxpayers are entitled to include in the tax benefit.
Thus, citizens – payers of personal income tax (hereinafter – PIT) in the case of realization of the right to a tax benefit in accordance with the provisions of Art. 166 of the Tax Code of Ukraine (hereinafter – Tax Code) will be able to include in such discount cost:
- medicines to provide medical care to patients;
- disinfectants and antiseptics;
- medical equipment;
- personal protective equipment;
- medical devices for screening patients;
- consumables for medical care;
- medical devices, laboratory equipment, consumables, reagents for laboratory tests;
- medical devices, laboratory equipment, consumables for infectious diseases departments, pathology departments, etc.);
- personal hygiene products;
- food;
- goods under the list determined by the Cabinet of Ministers of Ukraine.
The abovementioned funds, equipment, goods, materials are voluntarily listed (transferred) during the quarantine imposed by the Government by:
- public association;
- charitable organizations;
- central executive body that implements the state policy in the field of health care – the Ministry of Health of Ukraine;
- other central executive bodies that implement state policy in the areas of sanitary and epidemiological well-being of the population, quality control and safety of medicines, combating HIV/AIDS and other socially dangerous diseases;
- a person authorized to procure in the field of health care (State Enterprise “Medical Procurement of Ukraine”);
- health care facilities of state and/or communal property;
- structural subdivisions on health care issues of regional, Kyiv and Sevastopol city state administrations.
The individuals – payers of personal income tax have the right to include these expenses in the tax benefit according to the results of the reporting 2020 tax year. To do this, in 2021 they will need to file an annual tax return on property and income for 2020 within the deadlines set by the Tax Code.
State Tax Service of Ukraine in an individual tax consultation “On determining the first reporting period to which the amendments introduced by Law of Ukraine No. 466-IX of January 16, 2020 on transfer pricing” No. 2569/6/99-00-05-50-02-06/ІПК of June 26, 2020 has expressed its vision of the issue for which first reporting period the global documentation on transfer pricing (master file) and notification of participation in an international group of companies must be provided.
Thus, in the case of controlled transactions (hereinafter – CT) a notice of participation in an international group of companies is submitted for the first time in 2021 for 2020 together with the report on controlled transactions.
Taxpayers are required to report on CT by October 1 of the year following the reporting year.
Regarding the submission of global documentation (master file), the requests of regulatory authorities to taxpayers are applied for the first time for the financial year ending in 2021.
The right to send such a request to a taxpayer that is part of an international group of companies arises if the aggregate consolidated income of the international group of companies for the financial year preceding the reporting year, calculated in accordance with accounting standards applied by the parent company of the international group of companies, is equal to or exceeds the equivalent of 50 million euros.
The request may be sent not earlier than 12 months and not later than 36 months from the end of the financial year established by the international group of companies to which such taxpayer belongs, and in the absence of information on the established financial group of companies - not earlier than 12 months and not later than 36 months after the end of the reporting year.
Global transfer pricing documentation (master file) must be provided by the taxpayer within 90 calendar days from the receipt of the request.
If two or more taxpayers belonging to the same international group of companies are registered in Ukraine, the tax authorities send a request to only one of such taxpayers of their choice (item 39.4.7 of the Tax Code).
The Supreme Court of Ukraine has expressed its position on foreign currency debt, namely inflation and penalties for late payment.
If the terms of the loan agreement stipulate that the borrower undertakes to repay the same amount (euro equivalent), the amount of inflation losses charged by the plaintiff shall not be recoverable from the defendant.
The relevant provision is contained in the decision of the Supreme Court of June 22, 2020 in case No. 752/10525/16-ц.
Facts of the case
The person filed a lawsuit against the defendant to recover the debt in the amount of UAH 1,310,124.00 under the loan agreement concluded between the parties.
The statement of claim is motivated by the fact that the plaintiff lent the defendant cash in the amount of UAH 1,310,124.00 for business activities, and these circumstances are confirmed by a certificate of pledge. Defendant undertook to return the funds according to the schedule by May 31, 2016. However, the defendant partially fulfilled the obligations and subsequently refused to fulfill the obligations.
The plaintiff, taking into account the specified claims, asked the court to recover from the defendant the amount of debt under the loan agreement in the amount of UAH 1,269,124.00, the amount of interest for the use of funds in the amount of UAH 221,699.97, the amount of inflation losses in the amount of UAH 161,727.00 and UAH 29,401.05 3% per annum.
The decision of the local court denied the claim. This decision was partially overturned by the Court of Appeal.
The position of the Supreme Court
The Supreme Court dismissed the cassation appeal and upheld the appellate court's decision.
According to Art. 1 of the Law of Ukraine “On indexation of monetary income of the population” inflation index (consumer price index) is an indicator that characterizes the dynamics of the general level of prices for goods and services purchased by the population for non-productive consumption.
The official inflation index calculated by the State Statistics Committee determines the level of depreciation of the national currency of Ukraine, i.e. the purchasing power of the hryvnia, not foreign currency.
Thus, only the currency of Ukraine, the hryvnia, is subject to indexation due to depreciation. Foreign currency is not subject to indexation.
Norms of Part 2 of Art. 625 of the Civil Code of Ukraine (hereinafter – Civil Code) on debt payment, taking into account the established inflation index apply only to cases of overdue monetary obligation, defined in UAH.
At the same time, in case of breach of a monetary obligation, the subject of which is money, expressed in hryvnias with the definition of the equivalent in foreign currency, provided for in Part 2 of Art. 625 of the Civil Code, inflation losses are not recoverable, as losses from the depreciation of the national currency due to inflation are restored by the equivalent of foreign currency.
Given the abovementioned, as well as the fact that the terms of the loan agreement have determined that the borrower undertakes to repay the same amount (euro equivalent), the amount of inflation losses accrued by the plaintiff is not recoverable from the defendant.
The State Labor Service of Ukraine has explained whether a part-time worker should be trained and tested for knowledge on labor safety.
Training and testing of knowledge on labor safety is carried out by the employer, taking into account the specifics of production and the requirements of acts that apply only within the enterprise.
The training of workers on labor safety ends with a test of knowledge on occupational safety, which is carried out in accordance with the regulations on labor safety, compliance with which is part of their functional responsibilities.
Persons who have found satisfactory results during the examination of knowledge on labor safety, are issued a certificate of examination of knowledge on labor safety, the form of which is given in Annex 2 to item 3.14 of the Standard Regulations on training and testing of knowledge on labor safety, approved by Order of the State Committee of Ukraine for Labor Protection Supervision No. 15 of January 26, 2005 (hereinafter – Standard Regulation).
The certificate shall indicate the position, place of work of the employee or official and a list of basic regulations on labor protection and safe performance of specific types of work, in the amount of which the employee has passed the knowledge test. This list of regulations on labor protection is compiled for a specific enterprise which orders the training.
Therefore, in the case of part-time employment at another company, the employee undergoes training and testing of knowledge on labor protection as a newly hired employee in accordance with the requirements of the Standard Regulations.
