The Verkhovna Rada of Ukraine supported the draft laws on improvement of tax administration and elimination of certain inconsistencies in tax legislation (No. 1209-1, No. 1210).
Regarding the administration of taxes by the following drafts:
- principle of guilty responsibility of the taxpayer for tax offenses has been introduced within the framework of the Tax Code of Ukraine;
- requirements for validation of the decision of the supervisory bodies on imposition of fines have been defined;
- list of tax offenses of the control bodies, including non-compliance with the procedure of registration of taxpayers or violations in the field of VAT refund, is approved;
- the material liability of the body for the misconduct of its officials and the innocent responsibility of the controlling bodies are enshrined.
Regarding the implementation of the BEPS Action Plan, the following draft laws:
- introduced the concept of taxation of profits of controlled foreign companies at the level of controlling entity;
- introduced a three-tier documentation structure for international groups of companies, which includes transfer pricing documentation (local file), global documentation (master file), and country-by-country reporting;
- implemented 8-10 steps provision of the BEPS plan to control the distribution of functions, risks and intangible assets within a group of companies, improve the rules for commodity transactions by eliminating the restriction on the use of stock quotes of certain exchanges and allowing the use of quotation prices for such commodities;
- defined the order carrying out the mutual agreement procedure, which provides for the mechanism of submitting the application for the consideration of the case under the mutual agreement procedure, the requirements for such statement, the procedure for the action of the competent authority, etc.;
- introduced the concept of taxation of payments equaled to dividends, which envisages adjustments according to the methodology and procedures envisaged for control of transfer pricing, when conducting transactions with non-residents.
With respect to local taxes and fees, the following drafts:
- introduced a unified form of information on rates and privileges for all local taxes and fees and the procedure for submitting it by local authorities to the controlling bodies;
- abolished the obligation of local self-government bodies to annually decide on the establishment of local taxes and fees;
- abolished privileges for payment for land and real estate tax other than land on the territory of settlements on the line of contact;
- canceled for taxpayers of I-III groups of a single taxpayers exemption from payment of land tax in the case of carrying out activities for the provision of land and/or real estate located on such land, for rent (lease, loan).
In addition, the drafts make changes in the part of the personal income tax, corporate income tax, rent, etc.
The National Bank of Ukraine by resolution “On amending the instruction on the procedure for opening and closing accounts of bank customers and correspondent accounts of resident and non-resident banks” No. 7 of January 15, 2020 abolished the norm on the procedure of using current accounts of natural persons-entrepreneurs and natural persons who carry out independent professional activity, stipulated by Resolution of the National Bank No. 162 of December 27, 2019.
The requirement of the National Bank to carry out on current SPs accounts only those non-personal settlement operations and the right to transfer funds to their own account after payment of all taxes and fees has caused misunderstanding in the business community during its application.
The National Bank abolished this rule in order to eliminate manipulations and possible obstacles to the activity of entrepreneurs.
At the same time, the NBU's position remains the same. Since 2003, the norm that current accounts of individuals cannot be used for conducting business-related transactions has been applied.
As the banking system should be protected from the risks of conducting financial transactions with features of fictitious nature, the National Bank will discuss with the State Tax Service the mechanisms aimed at minimizing such risks.
The new regulation came into force on January 17, 2020.
The State Labor Service of Ukraine reminded that since January 1, 2020, penalties for violations of labor law have been increased.
According to Article 8 of the Law “On the State Budget of Ukraine for 2020”, as of January 1, 2020, the minimum wage is 4723 UAH, which causes an increase in the penalties for economic entities for violation of labor legislation.
Thus, for the actual admission of an employee to work without signing of an employment contract, the registration of a part-time employee in the case of actual completion of the full-time work established at the enterprise, and payment of wages (remuneration) without accrual and payment of a single contribution to the general State Social Security as well as taxes the penalties will be 30 minimum wages for each employee, that is 141,690 UAH;
- for violation of the terms of payment of wages to employees, other payments stipulated by the labor legislation for more than one month, not full payment, the penalty will be imposed at three times the minimum wage, that is 14 169 UAH;
- for failure to comply with the minimum state guarantees for wages – 10 minimum wages – 47 230 UAH;
- for non-observance of the statutory guarantees and benefits to employees involved in the performance of the duties stipulated by the laws of Ukraine “On military duty and military service”, “On alternative (non-military) service”, “On mobilization training and mobilization” – in ten times the minimum wage for each employee for whose rights were violated – 47 230 UAH;
- for preventing the examination of observance of labor legislation, obstacles to its implementation – at three times the minimum wage – 14 169 UAH;
- for obstacles in carrying out a check on the detection of violations (actual admission of an employee to work without conclusion of an employment contract, registration of a part-time employee in the case of actual full-time work established at the enterprise, and payment of wages (remuneration ) without accrual and payment of a single contribution to compulsory state social insurance as well as taxes) the penalty will be imposed at 100 times the minimum wage, set by the law at the time of detection of violations – 472 300 UAH;
- for violation of other requirements of the labor legislation – in the amount of one minimum wage – 4 723 UAH.
