The Cabinet of Ministers of Ukraine at its meeting presented a new draft law proposing a number of amendments to the Tax Code of Ukraine (hereinafter – the Tax Code). Denys Shmyhal, the Prime Minister of Ukraine, believes that this document will increase annual budget revenues to UAH 60 billion. The Government is closing gaps that have allowed big business to avoid paying taxes in Ukraine.
The Prime Minister of Ukraine has stressed that the Government does not raise or plan to raise national taxes for people or businesses. The changes will not apply to sole proprietors or small and medium-sized businesses in general.
The draft law contains four main blocks:
- rates of individual taxes will be adjusted to the actual level of macro indicators. This applies, for example, to water and forest use fees or environmental tax;
- rent payments for mining. Extraction from the Ukrainian subsoil must be fairly taxed. The efficiency of excise tax collection will also increase;
- further counteraction to schemes and fight against shadow land use and circulation of agricultural products;
- issues related to tax debt administration.
The Cabinet of Ministers of Ukraine established the Bureau of Economic Security (hereinafter – BES). The new body will receive the powers of the Security Service of Ukraine and the tax police in the fight against economic crimes.
According to Prime Minister Denys Shmyhal during a government meeting, the Bureau of Economic Security “will deal with all crimes in the economic sphere.”
Tasks of BEB
The Law “On the Bureau of Economic Security of Ukraine” was adopted by the Verkhovna Rada of Ukraine in January and entered into force on March 25, 2021.
The Security Service of Ukraine will lose its uncharacteristic functions of investigating crimes of corruption and organized crime in the field of management and economy. This will allow the agency to focus on tasks that are really directly related to the security of the state, with counterintelligence activities in the economic sphere.
How the BEB will operate
The Law stipulates that the director of BEB is appointed by the Cabinet of Ministers on the proposal of the Prime Minister based on the results of an open competition. The term of office is five years. Thus, the head will not be able to work more than two terms in a row.
The candidacy of the director is selected by the competition commission. It includes three people from the National Security and Defense Council, three from the Verkhovna Rada of Ukraine and the same number from the Cabinet of Ministers.
The state budget for this year provided UAH 587 million for the needs of the newly created department.
The Public Control Council will be created to monitor the activities of the Bureau, review the report of the director of BEB and provide its opinion.
The State Tax Service of Ukraine through the Office of Large Taxpayers has explained the peculiarities of filing a real estate tax declaration. When filling out the real estate tax declaration other than land, taxpayers sometimes make mistakes, in particular in sections 1 and 2 of the declaration, which leads to incorrect calculations of tax liabilities and may be a reason for the supervisory authorities’ unscheduled documentary inspection.
The tax authorities draw attention to the most common mistakes based on the results of the analysis of tax reporting on this tax.
Thus, when filling in the forms of Annexes 1 and 2 to the declaration, the payers incorrectly indicate or do not indicate at all the following mandatory data.
The area of the object of taxation
The total area of the object (objects) of residential real estate, which exceeds 300 square meters (for an apartment) and/or 500 square meters (for a house), has been declared, while the amount payable to the budget in column 15 of Annex 1 to the Declaration is “0”.
If the taxpayer owns an object (objects) of residential real estate, including its share, which is owned by a natural or legal person – a taxpayer, the total area of which exceeds 300 square meters (for an apartment) and/or 500 square meters (for a house), the amount of tax calculated in accordance with paragraphs “a” – “d” of subitem 266.7.1 of the Tax Code of Ukraine (hereinafter – Tax Code), increases by UAH 25,000 per year for each such residential real estate (its share) (266.7.11 of the Tax Code).
The size of the minimum salary
The amount of the minimum salary is indicated in accordance with the established on January 1 of the reporting year (as of January 1, 2021 – UAH 6,000).
Tax rate
The interest tax rate is determined by the decision of the local government, a list of which can be found on the official website of the relevant body.
Information on benefits
The benefit code, its amount should be indicated in accordance with the Benefit Handbook.
Incorrect filling in of information on benefits makes it impossible to analyze and summarize information on available benefits by region and in Ukraine as a whole.
It should be noted that Annexes 1 and 2 to the Declaration are filled in taking into account the notes contained in the approved form of tax reporting.
The current electronic form of the Real Estate Tax Declaration, other than land, can be found at the link on the official web portal of the State Tax Service of Ukraine (hereinafter – STSU).
In addition, the official web portal of the STSU contains electronic forms of documents for reporting on all taxes and fees.
The State Tax Service of Ukraine has explained whether it is necessary to pay the transport tax in case of car theft.
According to subitem 267.1.1 of the Tax Code the payers of transport tax are individuals and legal entities, including non-residents, who have registered in Ukraine in accordance with applicable law their own cars, which in accordance with subitem 267.2.1 of the Tax Code are subject to taxation.
The object of taxation are cars, the year of manufacture of which has not exceeded five years (inclusive) and the average market value of which is more than 375 times the minimum salary established by law on January 1 of the tax (reporting) year (subitem 267.2.1 the Tax Code).
In accordance with subitme 267.3.1 the Tax Code, the tax base is a car that is subject to taxation in accordance with subitem 267.2.1 the Tax Code.
Subitem 267.6.8 of the Tax Code stipulates that in the case of illegal possession by a third party of a car, which in accordance with subitem 267.2.1 of the Tax Code is subject to taxation, transport tax for such a car is not paid from the month following the month the fact of illegal possession of a car takes place, if such a fact is confirmed by the relevant document on entering information about a criminal offense in the Unified Register of Pre-trial investigations issued by an authorized state body.
In the case of returning a car to its owner (legal owner), the tax for such a car is paid from the month in which the car is returned in accordance with the decision of the investigator, prosecutor or court decision.
The taxpayer is obliged to provide the supervisory authority with a copy of such resolution (decision) within 10 days of receipt.
The Ministry of Social Policy of Ukraine has reminded about benefits for large families. Thus, large families are provided with the following benefits:
- 50% discount on the fee for the use of housing within the norms provided by current legislation (21 square meters of total living space for each family member who permanently lives in the living space of the house, and an additional 10.5 square meters per family);
- 50% discount on utility bills (gas, electricity and other services) and the cost of liquefied petroleum gas for domestic use within the limits set by law;
- 50% discount on the cost of fuel, including liquid, within the norms set by law, if the respective houses do not have central heating;
- First-line installation of residential telephones. The subscription fee for the use of the residential telephone is set at 50% of the approved tariffs.
These benefits are granted, provided that the average monthly total family income per person for the previous six months does not exceed the amount of income that entitles to social tax benefits (in 2021 – UAH 3,180).
Children from large families are entitled to the following benefits:
- free prescription drugs;
- annual medical examination and hospitalization in state and municipal health care facilities with the involvement of the necessary specialists, as well as reimbursement of denture costs;
- priority care in treatment and prevention facilities, pharmacies and priority hospitalization;
- in the presence of a standard certificate, free travel by all types of urban passenger transport (except taxis), public road transport in rural areas, rail and water transport of suburban services and buses of suburban and intercity routes (intra-district, intra- and interregional) regardless of distance and places of residence;
- free health and recreation services.
