The State Fiscal Service of Ukraine in its Individual Tax Advice “On the necessity of drawing up a tax bill and charging VAT tax liabilities for the entire amount of lease payments, except for leasing remuneration” of 14.01.2019, No. 118/6/99-99-15-03-02-15/ІПК considered this situation. The VAT payer (the lessor) has agreed with the counterparty that he/she will buy equipment for him/her and rent it to him/her (leasing), with subsequent redemption. For its service the lessor will receive profit (leasing reward). Thus, under a financial lease agreement, one party (the lessor) undertakes to buy from the seller a certain thing and transfer this thing to the lessee for use for a certain period (not less than a year) for the established fee (lease payments).
What are the consequences of VAT for such transactions?
The lessor, on the date of the actual transfer of the financial lease object to the lessee, is obliged to charge VAT liabilities, based on the contractual value of the financial lease object, and draw up and register the tax invoice for such transaction in the URTI.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On VAT taxation of transactions for the responsible storage of passenger cars” of 15.01.2019, No. 140/6/99-99-15-03-02-15/ІПК reported that the transfer transaction to the dealer Passenger cars for responsible storage for the enterprise are not subject to VAT. Under such a transfer, the company does not determine the tax obligations, and the dealer – a tax credit. At the same time, the provision of services for storing property for a dealer is subject to VAT.
In case of delivery of passenger cars to the dealer, VAT obligations of the company arise according to the rule of the “first event”. The tax invoice, registered in the Unified Register of Tax Invoices, is the reason for the dealer to include the amount of VAT to the tax credit.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the taxation of VAT transactions with the transfer of a company to a participant of corporate rights and shares owned by the company, as a result of the withdrawal of such a member of the partnership” 15.01.2019, No. 138/6/99-99-15-03-02-15/ІПК reports that when a company returns to one of the founders its contribution in the form of funds or corporate rights and shares of other entities belonging to the company, the object of VAT taxation does not arise.
However, if the company returns its contribution in the form of property to the founder, it will be considered as supply of the goods. Accordingly, such property will be subject to VAT on general grounds.
The State Fiscal Service of Ukraine in category 301.06 “ZIR” answered the questions, which indicators to be shown in column 3 of table 1 of Annex 5 of the Report on the amount of accrued income of insured persons and the amount of USC accrued?
Thus, in column 3 “The amount of net income (profit) declared in the tax return/Self-defined income amount/Share of distributed income” in Table 1 of the report on the amount of accrued income of insured persons and the amount of the accrued unified contribution (form No. D5 annual) approved by the order Ministry of Finance of 14.04.2015 No. 435, are reflected by:
- individuals - entrepreneurs on the general system of taxation and persons engaged in independent professional activities – net taxable income (profit) specified in the tax return. The lines for each calendar month indicate the average taxable income, which is determined by dividing the annual net income (profit) by the number of months during which such a payer was registered as a payer of the unified contribution to the compulsory state social insurance (hereinafter – unified contribution);
- individuals - entrepreneurs who chose a simplified taxation system – self-determined amount of income. The amount of income, which cannot be less than the minimum wage established by law for a month is to be indicated in the lines for each calendar month;
- members of the farm – the share of distributed income received by such payers from the net profit of the farm in the reported year, which is subject to the personal income tax. The lines for each calendar month indicate the average taxable income, which is determined by dividing the annual distributed income by the number of months during which such a payer was registered as a payer of the unified contribution.
Individuals-entrepreneurs, in table 1, fill in all columns. For those who are on the simplified system in table 1 of columns 3 and 4 will be the same, because there is indicated a minimum wage (from the editorial board: the situation is when the USC is paid from the minimum wage. If the individual entrepreneur paid a higher value for the USC, in columns 3 and 4 the self-defined amount of income, from which the USC has been paid, is given). For the general system, columns 3 and 4 may be different. In column 3, the amount of net income, which must coincide with the tax information, in column 4 – the amount within the maximum value.
The error report is not considered to be submitted and the income information from it will not fall into the register of insured persons and will not be credited to the insurance record. To enroll an entrepreneur’s insurance record, it is necessary to correct the reporting errors and re-submit the annual report to the bodies of the state fiscal service. The deadline for submission of Annex 5 for 2018 is February 11, 2019.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the transfer of funds from a special account of an agricultural company to repay VAT liabilities” of 16.01.2019, No. 174/6/99-99-15-03-02-15/ІПК considered that situation. The VAT payer was registered as a subject of the special VAT regime in accordance with Art. 209 of the Tax Code of Ukraine. At present, the taxpayer is on the general tax system. At the same time, on his/her special account of an agricultural company opened in the bank, the funds are recorded, which the taxpayer intends to count against repayment of tax liabilities with VAT for future tax periods. Is this possible?
The funds currently recorded on the special account of agricultural company must be transferred to the current account of such a company.
Given that funds accumulated on a special account of a company are the funds of such an agricultural company and were not paid to the state budget, then the latter cannot be credited from the special account of the agricultural company for the payment of taxable VAT obligations payable to the state budget.
In order to pay VAT obligations, such funds must be transferred from the current account of the taxpayer to his/her electronic account in the system of electronic administration of VAT.
The Ministry of Economic Development and Trade of Ukraine on its website reminded that since January 1, 2019, the overwhelming majority of the technical standards of the Soviet Union “GOST” developed before 1992, ceased to be in force in Ukraine.
The necessity of termination of the Soviet GOSTs in the territory of Ukraine was determined by the Program of activity of the Cabinet of Ministers of Ukraine. According to the document in 2015, the State Enterprise “Ukrainian Research and Training Center for Standardization, Certification and Quality” (SE “UkrNDNC”), which serves as the National Standardization Authority, issued respective orders to repeal GOSTs with a loss in force for 2016-2018 years and with a complete rejection of them, starting January 1, 2019. Total 12090 Soviet GOSTs should have been canceled.
At the same time, in order to reduce the risks to business, the Ministry of Economic Development and the Ministry in advance invited all interested parties to submit their proposals for the abolition of state-owned enterprises that have lost their relevance. In addition, the National Standardization Authority has consistently provided clarification and advice on issues arising from the abolition of GOSTs.
During 2016-2018, proposals were made to the National Standardization Authority to extend the validity of certain GOSTs. As a result of the consultation, the National Standardization Body has issued a number of orders according to which 1173 Soviet GOSTs remain in force as of January 1, 2019.
Such GOSTs will be valid until January 1, 2022. In particular, these are standards for replacing which are currently being or are expected to carry out the development of projects of relevant national standards; standards referenced in regulatory acts; Standards of the Unified System of Design Documents; Standards developed in their time based on international standards, the versions of which are relevant in our time.
The list of Soviet standards that are currently in force can be found on the official website of SE “UkrNDNC”.
Since the continuation of the Soviet GOSTs after 2022 is impossible, the Ministry of Economic Development and the National Standardization Organization strongly recommend that all interested parties, who use GOSTs in their work, take advantage of the recommendations placed on the sites of the Ministry of Economic Development and Trade and SE “UkrNDNC”, and to find an alternative to the use of Soviet standards, which in fact are regulatory acts of an already non-existent state and contradict the innovations introduced in the field of technical regulation of Ukraine and Ukraine’s commitment to reform the sphere of technical standardization provided for by the WTO Agreement and the Association Agreement with the EU.
At the same time, if it is necessary to develop a national standard for the replacement of the relevant Soviet GOST, any interested party (authorities, producer associations, enterprises, public organizations, etc.) may act as the customer for the development of such a standard in accordance with the Law of Ukraine “On Standardization” of 05.06.2014, No. 1315-VII.
It should be recalled that the Law of Ukraine “On Standardization”, which entered into force on January 3, 2015, implemented the provisions of the WTO Agreement on Technical Barriers to Trade in the domestic legislation of Ukraine. Also, according to the Association Agreement between Ukraine and the European Atomic Energy Community, Ukraine gradually implements European standards (EN) as national standards, in particular, harmonized European standards. At the same time, Ukraine cancels conflicting national standards, in particular, the interstate standards (GOST), developed before 1992.
The Ministry of Social Policy of Ukraine in its letter “On the quota of workplaces for persons of pre-retirement age” of 09.11.2018, No. 21833/0/2-18/53 reported that the requirement for implementation of the quota specified in para. 2 of part. 2 of Art. 14 of the Law of Ukraine “On Employment of the Population” of 05.07.2012, No. 5067-VI (hereinafter – the Law) is applied to companies, institutions and organizations in which the staff number is 20 persons. According to which enterprises, institutions and organizations with a number of full-time employees from 8 to 20 persons are set a quota of not less than one person in the average number of full-time employees who before the onset of the right to retirement according to age according to Art. 26 of the Law of Ukraine “On Compulsory State Pension Insurance” of 09.07.2003 No. 1058-IV left 10 or less years.
The requirement to establish a quota of 5% of the average number of full-time employees for the previous calendar year applies to enterprises, institutions and organizations with a number of full-time employees of more than 20 people (paragraph 1 of Article 2, Article 14 of the Law).
Concerning the implementation of the quota in case if the employee becomes a person of pre-retirement age in the second half of the reporting period.
According to Part 3 of Art. 14 of the Law, employers themselves calculate the specified quota based on the number of persons who, under full employment, already work at companies, institutions, organizations and belong to uncompetitive in the labor market (except persons with disabilities).
Consequently, if a person received additional guarantees in the reporting year in promoting employment in accordance with part 1 of Art. 14 of the Law, in particular, became a person who before the onset of the right to retirement according to age according to Art. 26 of the Law of Ukraine “On Compulsory State Pension Insurance” left 10 and less years and worked in a reported year on full employment terms, she/he should be taken into account when calculating the quota.
A mandatory condition for the employers to comply with the quota is the employment of citizens who have additional guarantees in the promotion of employment, specified in part 1 of Art. 14 of the Law, in accordance with the requirements of Part 2 of Art. 14 of the Law and the annual (no later than February 1 after the reporting year) information on this public employment service.
Responsibility for violation of the legislation on employment of the population is determined by Art. 53 of the Law. Para. 1 of Art. 53 of the Law stipulates that officials of executive bodies and local self-government bodies, enterprises, institutions and organizations, as well as individuals - entrepreneurs guilty of violating the law on employment of the population, are liable in accordance with the law.
In addition, para. 2 of Art. 53 of the Law provides that in case of failure by the employer during the year quotas for employment of citizens specified in part 1 of Art. 14 of the Law, a fine is levied from him/her for every unreasonable refusal to employ such persons within the limits of the relevant quota in the amount of twice the minimum wage established at the time of the detection of the violation.
