The Cabinet of Ministers of Ukraine by its Resolution “On amendments to Annex 1 to the Resolution of the Cabinet of Ministers of Ukraine dated February 2, 2011 No.98” of 05.04.17 No. 241 increased the size of number of daily business trip expenses within Ukraine for civil servants and employees of enterprises, institutions and organizations that are wholly or partly supported (funded) at the expenses of the budget funds. Daily allowance will amount to UAH 60 (instead of UAH 30).
In addition, there will be significant increase in the marginal cost of the dwelling rent per day in Ukraine − UAH 600 (instead of UAH 250).
The State Fiscal Service of Ukraine in its letter “On taxation of cancelled debt” of 04.04.17 No.4706/Л/99-99-13-02-03-14 emphasized that in 2016 tax-free amount of the income for the cancelled debt should be determined under the norms were in effect until 01.01.17. Namely − in accordance with wording of sub-para.“д” of sub-para. 164.2.17 of the Tax Code of Ukraine (hereinafter − TCU), which established such a size of 50% of the minimum wage as of January 1 of the reporting year. Thus, the non-taxable amount of forgiven debt for 2016 is UAH 689.
For debt cancelled in 2017, non-taxable amount is 25% of the minimum wage on January 1, that is UAH 800.
The State Fiscal Service of Ukraine in its letter “On the procedure of taxation of VAT transactions of the taxpayer − resident on the provision of engineering services (repair of industrial equipment) to non-resident outside the customs territory of Ukraine and reflection of such transaction in the tax return of VAT” of 03.03.17 No.4484/6/99-99-15-03-02-15 reported that the place of provision of services in repair of industrial equipment should be determined as the place of supply of engineering services under sub-para. “в” of para. 186.3 of TCU. In other words tax officers associate it with the location of the recipient of services. So, if the customer is a resident, then the place of supply is located outside Ukraine. That is, there is no need to accrue the value added tax (hereinafter − VAT) on the repair works: there is no the subject to taxation provided by sub-para. “б” of para. 185.1 of TCU.
The State Fiscal Service of Ukraine in its letter “On the practical application of paragraph 45 subsection 2 of section XX of TCU and on personal income taxation under the terms of a single civil law contract” of 03.03.17 No. 4482/6/99-99-15-03-02-15 reported that the obligation to accrue the unified contribution applied not to all rewards under the civil law contract accrued for the benefit of individuals, but only to those providing execution of works or services provision. Furthermore, if the individual counterparty is private entrepreneur and receives a remuneration within his/her business, the unified contribution should not be accrued (para.1 of sec.1 of Art.4 of the Law of Ukraine “On the collection and accounting of the unified contribution for obligatory state social insurance” of 08.07.10 No.2464-VI).
In addition, fiscal agency described the VAT consequences in a situation where a VAT payer in the application of privileged taxation regime, as defined in para.45 of sub-sec.2 of sec. XX of TCU, acquires services related to the delivery, loading and unloading of coal, for individuals − VAT payers. According to the explanation tax authorities, due to the fact that such services are purchased for use in transactions exempt, it is necessary to accrue tax liabilities on the cost of such services and make consolidated tax invoice no later than the last day of the reporting (tax) period in accordance to para. 198.5 of TCU, since the acquisition was carried out with VAT during the application of the privileged taxation regime.
The State Fiscal Service of Ukraine in its letter “On the determining of the reporting period in which the payer has grounds for formation tax credit with VAT based on account for centralized water supply and sewerage centralized” of 03.03.17 No. 4476/6/99-99-15-03-02-15 emphasized: if a VAT payer in the period of the right to a tax credit (event, which took place earlier - the date of payment services or the date of receipt of services) did not include in the tax credit amount of VAT based on the accounts of water utility, then these tax amounts could be included in the tax credit by submission of clarifying calculations (including the three-year limitation period) with corrected mistakes in periods when such a right arose.
As fiscal authorities repeatedly emphasized in their letters made before 2017, the taxpayers could form a tax credit on the basis of invoices for services which value to be determined by the performance of meters. But as regards water supplies, there is considerable controversy. Thus, sub-para.14.1.191 of TCU interprets the water supply as the supply of goods. In addition, controllers also interpret it as a supply of goods in the Guidelines of conditional codes of goods of foreign economic activity of water supply. Finally, water suppliers use the cash method (para.44 of sub-sec.2 of sec. XX of TCU), so it is risky to form a tax credit without actual payment.
So, it is better to obtain individual consultations from representatives of fiscal agency on this issue.
The State Fiscal Service of Ukraine in its letter “On payment of income to entrepreneurs from the occupied territory” of 31.03.17 No. 7121/10/26-15-13-01-12 reminded that according to sub-para.38.9 of sub-sec.10 of sec. XX of TCU during accrual of income to individuals, who temporarily live on occupied territory or residential areas located on the contact line, it is necessary to withhold the income tax from such incomes. Rule on Non-Withholding of income tax does not work in cases if individual entrepreneur provided a copy of the document confirming its state registration as Business Entity (para. 177.8 of TCU).
Similarly it is necessary to withhold the war tax from the income paid to individual entrepreneur who appears or is resident in the occupied territory.
Liability for withholding the tax income and the war tax should be imposed on the tax agent - a business entity or self-employed person who pays income.
The State Fiscal Service of Ukraine in its letter “On accrual of depreciation and entry in the books of fixed assets” of 31.03.17 No. 7136/10/26-15-12-05-11 noted that fixed assets which evacuated from the ATO zone and “Crimea” FEZ, should be accounted for as assets of the company. The fixed assets transported from the temporarily occupied territory of Ukraine are exempt from any tax (including import duties). Accordingly, the amount of unpaid taxes are considered to be a tax privileges and included in the report of the amount of tax benefits.
Documentarily confirmed expenses associated with evacuation of fixed assets and all it amortization can be included in expenditures with the purpose of the income tax imposition.
The Ministry of Finance of Ukraine by its Order “On approval of the request form of the controlling authority for implementation counter reconciliation” of 28.02.17 No. 299 approved the request form controlling authority to conduct counter reconciliation.
It should be reminded that the counter reconciliation is to compare data received from payers and other subjects of information relations, with the aim of documentary evidence of economic relations with the taxpayer and fees and proof of relationship, type, volume and quality of transactions and calculations conducted between them to determine the completeness of their reflection in the accounting of the payer.
The State Service of Ukraine on Labor in its letter “On provision of workplaces with first aid kit” of 18.11.16 No. 11506/1/4.4-ДП-16 reports that the employer is obliged to provide the workplaces with the first aid kit. Because he/she should take immediate steps to provide first medical aid to victims in the event of emergencies and accidents in the company (para. 2.4 of sec. II of General of requirements regarding employers provision of the protection of workers, approved by the Ministry of Emergencies of Ukraine of 25.01.12 No. 67). Also, the law provides for that in the event of an accident, direct line manager must urgently organize First Aid Treatment for the injured party (para. 8 of the Procedure of investigation and keeping records of accidents, occupational diseases and emergency at work, approved by the Cabinet of Ministers of Ukraine of 30.11.11 No. 1232).
The State Service on Labor also notes that the legislation does not define the concept of the single term “first aid kit”. However, according to sources of the theory of medical science, the first aid kit is a set of medicines, tools and devices that are intended to provide first medical aid. Its content depends on the specifics of the company, and it should be determined by the employer, unless it is determined by separate regulations.
The National Bank of Ukraine in its letter “On the practical application of certain provisions of the regulations of the National Bank of Ukraine in the implementation of foreign exchange transactions” of 07.04.17 No.40-0005/26287 explain: restrictions on maximum amount cash payment (UAH 50 thousand per day with one person) do not apply to foreign exchange transactions carried out be the banks and financial institutions.
That is, as for transactions of sale of foreign currency in cash, or precious metals to one person during one operational (working) day within one bank/financial institution, the restriction on the amount not exceeding the equivalent of UAH 150 thousand is in effect.
The Supreme Administrative Court of Ukraine by its decree of 01.02.17 No. К/9991/56935/12 tax consulting should not contradict other decisions (legal acts or legal acts of individual action) of the authorities. It is proved that they have no force of legal act, and in fact there is the position of the tax authority on the application of the law.
Tax consultation does not generate occurrence of any legal consequences for relevant entities, does not affect their rights and responsibilities and is not binding. The grounds for declaring invalid tax advice can only be a conflict of legal provisions or content of the tax or fee. In addition, the Tax Code of Ukraine does not provide for the right of the tax authority to cancel provided tax advice.
