The Cabinet of Ministers of Ukraine has extended the quarantine in Ukraine until May 11. Only after that the phasing out or relaxation of restrictions will begin.
Due to the early introduction of quarantine measures, Ukraine has one of the lowest mortality rates from COVID-19 which is 2.7%.
“If all goes well and the epidemic situation contributes, on May 11 we will be able to talk about the opening of parks and squares, grocery stores, some of the objects of everyday services. There may be other mitigating measures. But we will be able to talk about them later”, Prime Minister of Ukraine Denis Shmigal said.
According to the Prime Minister, such actions will help to return some people to work, improve the emotional health of Ukrainians and start the warming up of the economy.
Denis Shmigal also noted that the Government understands that it is not easy for people and businesses: “Therefore, we are implementing a series of measures aimed at supporting Ukrainians. In particular, we are increasing unemployment benefits, expanding our business support programs and actually implementing credit breaks, raising pensions, and creating new jobs today”.
The Cabinet of Ministers of Ukraine has informed that social support for the unemployed in Ukraine is increasing. Thus, citizens who were resigned from their last job during the quarantine period (starting on March 12, 2020) on their own accord and registered with the State Employment Service will receive unemployment benefits from the first day of acquiring the status of unemployed. That is, during the quarantine period, the rule on deferring unemployment benefits for the resigned on own accord will not apply.
It is known that Law of Ukraine on Amendments to the Law of Ukraine “On the State Budget of Ukraine for 2020” No. 553-IX came into force on April 18, 2020.
This law amends the “Final Provisions” of the Law of Ukraine “On Compulsory State Social Insurance against Unemployment”. The amendments stipulate that during quarantine period the persons who have resigned from their jobs on their own accord will not be subject to the requirement to defer payment of unemployment benefits up to 90 days. However, the total duration of unemployment benefits for such persons may not exceed 270 calendar days.
If a person resignes from their previous on own accord during the quarantine period and has already registered with the employment service, no additional documentation is required. Assistance will be accrued automatically.
The State Tax Service of Ukraine through the Office of Large Taxpayers has explained the specifics of determining the base of value added tax (hereinafter – VAT) when providing services within the commission contracts.
Tax specialists has reminded that Art. 1011 of the Civil Code of Ukraine (hereinafter – Civil Code) stipulates that under a commission agreement one party (commissioner) undertakes, on behalf of the other party (committent), for payment, to make one or more transactions on its own behalf, but at the expense of the committent.
In this case, according to Art. 1013 of the Civil Code, the commissioner also consideres the provision of commission services as the provision of services for which the commissioner receives payment (commission).
According to paragraphs (a) and (b) of item 185.1 of the Tax Code of Ukraine (hereinafter – Tax Code), the object of VAT taxation is the transactions of taxpayers for the supply of goods/services, the place of supply of which in accordance with Art. 186 of Chapter V of the Tax Code is located in the customs territory of Ukraine.
According to paragraph “f” of subitem 14.1.191 of the Tax Code the supplies of goods is, in particular, the transfer of goods under an agreement under which a commission (remuneration) is paid for the sale or purchase.
Supply of services means any transaction other than the supply of goods, or any other operation for the transfer of the right to intellectual property rights and other intangible assets or the granting of other property rights in respect of such intellectual property objects, and the provision of services consumed in the course of committing a certain act or carrying out a certain activity (subitem 14.1.185 of the Tax Code).
The procedure for determining the tax base for the supply of goods/services is established by Art. 188 of the Tax Code. Pursuant to paragraph 188.1 of the tax Code, the tax base for the supply of goods/services is determined on the basis of their contract value, including national taxes and fees (except for excise tax on sales of excise goods by the economic entities, collection of compulsory state pension, compulsory state pension, levied from the cost of cellular mobile services, VAT and excise tax on ethyl alcohol used by manufacturers for production of medicinal products, including blood components and drugs manufactured fusing them (except drugs in the form of bitters and elixirs).
At the same time, the tax base for the supply of goods/services can not be lower than the purchase price of such goods/services, the tax base for the supply of self-made goods/ services may not be lower than normal prices, and the tax base for the supply of fixed assets may not be lower than the carrying amount (residual) value according to the accounting data, which occurred at the beginning of the reporting (tax) period during which such operations are carried out (in the absence of accounting for non-current assets – at normal cost basis), except for:
- goods (services), prices for which are subject to state regulation;
- gas supplied to the public.
The agreed (contractual) cost includes any amount of funds, value of tangible and intangible assets that are transferred to the taxpayer directly by the buyer or through any third party related to the compensation of the value of the goods/services.
The tax base for the goods/services transferred/received within the limits of the commission (consignment) contracts, sureties, trust management, is the cost of supplying these goods, determined in accordance with the procedure established by Art. 188 of the Tax Code.
Date of increase of tax liabilities and tax credit of taxpayers who supply/receive goods/services within the framework of commission (consignment) contracts, sureties, letter of authority, trust management, other civil contracts and without ownership of such goods/services, determined by the rules established by Art. 187 and 198 of the Tax Code (item 185.4 of the Tax Code).
Therefore, the provision by the commissioner of services related to the performance of the commission contract is subject to VAT if their place of supply is located in the customs territory of Ukraine.
The date of occurrence of tax obligations for the supply of goods/services in accordance with item 187.1 of the Tax Code is the date corresponding to the tax period during which any of the events that occurred earlier (first event) take place:
- the date of transfer of funds from the buyer/customer to the taxpayer's bank account as payment for goods/services to be supplied, and in the case of delivery of goods/services for cash – the date of posting the funds at the cashier of the taxpayer, or in the absence of such - the date of cash collection at a banking institution that serves the taxpayer;
- date of shipment of goods, and for services – date of registration of the document, certifying the fact of delivery of services by the taxpayer.
According to item 201.1 of the Tax Code on the date of occurrence of tax liabilities, the taxpayer must make a tax invoice in electronic form, subject to the condition of registration in the order specified by law, a qualified electronic signature of the person authorized by the payer and register it in the Unified register of tax invoices (hereinafter – URTI) within the deadline set by the Tax Code.
The tax invoice drawn up and registered in the URTI by the taxpayer who performs the operations for the supply of goods/services is the reason for the buyer of such goods/services to calculate tax amounts related to the tax credit (item 201.10 of the Tax Code).
Therefore, on the date of the first event in accordance with item 187.1 of the Tax Code, the commissioner must calculate VAT tax liabilities on the basis of the tax base determined in accordance with Art. 188 of the Tax Code (that is, from the full cost of the services provided by the committent and the cost of commission), and draw up and register the corresponding tax invoice in the URTI within the term fixed by the Tax Code corresponding tax invoice. If the committent is not a VAT payer, the commissioner has no reason to form the tax credit.
The State Labor Service of Ukraine has informed on the peculiarities of early termination of fixed-term employment contract at employee's initiative
The employer is obliged to satisfy the employee's requirements for early termination of a fixed-term employment contract in the cases specified in:
1) Part 1 of Art. 39 of the Labor Code of Ukraine (hereinafter – Labor Code):
- illness or disability that impedes the contractual work;
- violation by the owner or the authorized body of the labor legislation, collective or employment contract. In case of dismissal for this reason, the employer is obliged to pay the employee the severance pay in the amount of three months' average salary (Article 44 of the Labor Code);
2) Part 1 of Art. 38 of the Labor Code:
- moving to a new place of residence;
- transfer of husband or wife to work in another locality;
- admission to the educational institution;
- inability to live in this area, confirmed by a medical report;
- pregnancy;
- caring for a child up to the age of 14 or a child with a disability;
- caring for a sick family member according to a medical report or a person with I group of disability;
- retirement;
- recruitment by competition;
- other valid reasons. The reasons are justified in each case by the employer. If the reasons for which the employee intends to terminate a fixed-term employment contract early, are not valid, the employer may refuse to terminate the contract and require the employee to work out the terms fixed in the contract or to finish some work.
Thecontract worker must not comply with the two-week termination notice. Such employee is considered dismissed on the day specified in the order terminating the fixed-term employment contract.
