The National Bank of Ukraine by Resolution No. 53 of April 20, 2023 ‘On Amending Resolution of the Board of the National Bank of Ukraine No. 18 of February 24, 2022’ has eased a number of administrative restrictions in order to create conditions for launching the electronic residency project and strengthening positive trends in cash segments of the foreign exchange market, which contributed to a significant narrowing of the spread between the cash and official rates.
Cash segment of the foreign exchange market
The National Bank consistently takes steps to minimize the multiplicity of exchange rates. This contributes to increasing the stability of the foreign exchange market and improving exchange rate expectations.
For the same purpose, the NBU expands the ability of banks to carry out operations on the sale of cash foreign currency to the public. Thus, from April 21, when calculating the amount of cash foreign currency that a bank can sell on the foreign exchange market, not 100%, but 120% of the amount of non-cash currency purchases from the population, starting from April 13, 2022, will be taken into account.
The corresponding changes are aimed at maintaining a favorable situation on the foreign exchange market.
Transfer of foreign currency abroad by e-residents
The National Bank enables e-residents (after paying taxes in Ukraine) to transfer to their accounts abroad funds in foreign currency received from non-residents to accounts in Ukrainian banks (for services or work provided).
The corresponding changes will not put pressure on the foreign exchange market and international reserves of Ukraine, because within the scope of such operations, the purchase of foreign currency will not take place – the transfer will be made at the expense of foreign currency received by the e-resident from abroad.
The implementation of the e-residency project will contribute to attracting additional revenues to the state budget, popularizing Ukraine as a global IT brand, and increasing Ukrainian positions in international rankings.
It should be noted that on April 1, 2023, Law of Ukraine No. 2654-IX of October 6, 2022 ‘On Amendments to the Tax Code of Ukraine and Some Other Laws of Ukraine regarding the Peculiarities of Taxation of Business Activities of Electronic Resident’ entered into force. It enables foreign citizens and stateless persons who have acquired the status of e-resident and registered themselves as an individual entrepreneur to conduct business and pay taxes in Ukraine without leaving their country of residence or stay.
As part of the implementation of this project, the NBU has since March 8 enabled e-residents to open current accounts for business activities in a bank with which the Ministry of Digital Transformation of Ukraine has concluded a relevant agreement. Giving e-residents the opportunity to transfer funds in foreign currency received from non-residents (after paying taxes) is also one of the steps that will enable the practical implementation of the corresponding project.
The Cabinet of Ministers of Ukraine is preparing an experimental project with a one-click subsidy through the website of the Pension Fund of Ukraine. The Ministry of Social Policy has prepared a draft Government resolution on an experimental project to improve the procedure for providing subsidies to the population. It is posted for discussion on the website of the Federation of Trade Unions (FPU).
The document proposes to ensure the following.
1. Create a system that will automatically receive information from the registers of the Ministry of Internal Affairs, the State Migration Service, the Ministry of Finance, the Ministry of Social Policy, the Ministry of Justice, the Ministry of Health, the Ministry of Infrastructure, which contain data on households. This system will collect and analyze information from various sources to determine which households may be eligible for housing subsidies.
2. On the web portal of the Pension Fund of Ukraine or on the Diia portal, an online cabinet can be created, where citizens can submit an application and declaration for a housing subsidy ‘in one click’. To do this, they will need to register in the system and fill in the necessary information. The existing ways and methods of applying for a housing subsidy will also be preserved.
3. Simplification of the criteria for receiving housing subsidies for adoptive and large families.
4. If a housing subsidy is assigned to people who single-handedly raise children under the age of six or children with disabilities, the income requirement may be lowered.
5. Persons staying abroad for more than 60 days are not included in the household for the calculation of social standards for housing and communal services, and their income is not included in the total income of the household.
6. If the material and property status of the persons making up the household has changed significantly, their right to receive a housing subsidy is reviewed and its amount is recalculated.
7. Suspension until the moment of application of centralized payments of housing subsidies to persons whose residential premises are located in the territory of active hostilities or under occupation, in the event that the person does not have an open current bank account and does not apply within 60 days to branches of JSC "Oschadbank" or JSC CB "PrivatBank" for the withdrawal of housing subsidies.
8. Informing the population about the suspension of the subsidy by means of telecommunications with the sending of an appropriate warning.
9. Exceeding the amount of the housing subsidy can be detected by monthly verification of information about recipients. This process will make it possible to detect cases of fraud in a timely manner and avoid the establishment of a practice of lengthy legal processes for the return of funds that have been paid in excess.
The Cabinet of Ministers of Ukraine has settled the issue of granting child birth assistance to parents who went abroad because of the war. From now on, parents who had a baby during their temporary stay outside of Ukraine can remotely submit documents for the appointment of assistance at the birth of a child.
A comprehensive resolution developed by the Ministry of Social Policy was adopted at the Government meeting. The document, in particular, regulates the issue of social benefits for children of parents who went abroad due to the war.
The innovation supported by the Government provides for the possibility of sending one of the parents who is temporarily abroad, an application for the appointment of assistance to the social security body in Ukraine at their registered place of residence. Together with the application, the father or mother must send the documents certifying the birth of the child, issued by the competent authorities of the country of residence and legalized in accordance with the established procedure. Thus, the mother will be able to receive Ukrainian child benefit in the country where she received temporary shelter.
The Cabinet of Ministers of Ukraine has adopted the procedure for providing compensation to employers for creating new jobs and employing the registered unemployed. The Government has approved procedures for compensating employers for part of the actual costs associated with the payment of a single contribution to mandatory state social insurance for the creation of new jobs and for hiring officially registered unemployed. The relevant resolution was approved at a meeting of the Cabinet of Ministers of Ukraine on April 18, 2023.
This document provides for the payment of compensation in the amount of 50% of the actual costs of the paid single contribution for an employed person for a new workplace. Compensation will be paid to employers who pay employees wages of at least three minimum wages during the year.
Provided that this level of wages is maintained, compensation will be paid for each employed person over the next 12 months at the expense of the state budget, provided for in the budget of the Fund of the General Mandatory State Social Insurance of Ukraine in case of unemployment. This mechanism will become operational on January 1, 2024.
It is also established that compensations to small business entities for actual costs in the amount of a single contribution to the mandatory state social insurance for employment of registered unemployed persons for new jobs.
Small business entities will be compensated in the amount of the actual costs of the paid single contribution for the employment of a registered unemployed person who was referred by the employment center to a new workplace. Compensation will be paid on the condition that the employment period will be at least two years and will be paid every other month during this period. It is planned that this mechanism will become operational already this year.
The Ministry of Finance of Ukraine has prepared a draft of the Procedure for the State Tax Service to provide the Pension Fund of Ukraine with information from the State Register of Individual Taxpayers for the purpose of assigning housing subsidies and/or providing benefits.
The document defines the mechanism of providing information by subjects of information exchange in electronic form.
In particular, the Pension Fund of Ukraine submits to the State Pension Fund in electronic form requests for information on the sources and amounts of income received by individuals from tax agents and/or the amount of income received by self-employed persons, as well as the amount of annual income declared by the individual in the tax return on property status and income, as well as the group of single tax payers to which the entrepreneur belongs. The request may contain information about one or more natural persons.
The State Tax Service ensures processing of requests within five days from the date of their receipt and provides answers containing the following information:
- EDRPOU code or registration number of the taxpayer’s registration card from the State Register or series (if available) and passport number and name or surname, first name, patronymic (if available) of the tax agent;
- the amount of income accrued by the tax agent for the benefit of an individual in accordance with the characteristics of income/characteristics of benefits and reporting periods; the amount of tax withheld on the income of an individual; the total amount of annual income declared by an individual in the tax declaration on assets and income;
- the amount of withheld tax declared by an individual in the tax declaration on assets and income (for individuals who are self-employed);
- the total amount of income and the amount of tax for the reporting period, declared by the individual entrepreneur in the tax declaration of the payer of the single tax - individual entrepreneur;
- the period for which the information is provided.
‘The transmitted information is used by the subjects of information exchange exclusively for the purpose of implementing their functions and powers defined by the law, and may not be transferred to a third party, unless otherwise provided by law,’ the document states.
