The Verkhovna Rada of Ukraine by the Laws “On Amendments to Article 287 of the Customs Code of Ukraine on the establishment of favorable conditions for implementation of the state contracts under defense order and the agreements for the supply of defense products” of 23.04.15, № 365-VIII and “On Amendments to Article 197 of the Tax Code of Ukraine on the establishment of favorable conditions for implementation of the state contracts under defense order and the agreements for the supply of defense products” of 23.04.15, № 366-VIII exempted import of certain goods from duties and VAT: materials, kits, components, equipment and completing products for use in the production of defense purposes. The customer of this product should be public; it is determined by the Cabinet.
The list of preferential products is determined by ch.8 of the Art.187 ч. 8 ст. 187 of the Customs Code of Ukraine. Also the first delivery of the goods is exempted from VAT by new para.197.23 п. 197.23 of the TCU.
The Cabinet should determine the procedure for import, supply and targeted use of preferential goods. The liability is provided for the improper use of preferential goods. The VAT payer, who failed to follow the procedure, should:
- to accrue liabilities in an amount equal to the amount of VAT at import (first delivery) of goods;
- to pay penalty;
- to incur financial, administrative, criminal liabilities established by the TCU and the laws of Ukraine.
The exceptions are also provided for by the legislator. Import of these products is subject to the duty and VAT, if the products:
- come from the country recognized as occupant country under the law and/or aggressor state on Ukraine under the law;
- or imported from the territory of the occupant country (aggressor) and/or from the occupied territory of Ukraine (recognized as such by law).
The laws come into force from the day following the day of their publication.
The Cabinet of Ministers of Ukraine approved appropriate Procedure by its Resolution of 29.04.15, № 321 “On approval of the transfer Procedure of summer and garden cottages, which meet the state construction standards, in residential buildings”. The document determines that the transfer of summer cottages in residential buildings is to be performed free of charge by local government authorities.
For the purpose, the owner (an authorized person) of cottage should submit to the executive board of the village (town or city) council the appropriate application in the prescribed form (Annex 1 to the Procedure) together with the following documents:
- a copy of the document of the right of ownership of summer or garden cottage;
- written consent of the co-owners (if any) for the transfer of such cottage in a residential building;
- report on the technical inspection of summer (garden) cottage with the conclusion of its compliance with state construction standards in the form according to Annex 2 to the Procedure.
The decision on the transfer of summer (garden) cottage in residential building is to be decided within a month. In the case of positive response the local council within three days issues (sends) to the owner, by registered letter with schedule of enclosures, the decision to transfer summer (garden) cottage in residential building indicating its address. The relevant amendments are also included in the State Register of property rights to immovable property.
The State Fiscal Service of Ukraine in its letter “On VAT exemption for the dissemination of the electronic version of the Media” of 19.05.15, № 8045/10/26-15-15-01-09 noted that the transactions of the taxpayer for the supply (subscription) and delivery of electronic versions of periodicals of printed media of domestic production, including recorded on electronic data storage devices (CD-ROM or DVD-disc, etc.), were the subject to VAT in the generally established procedure at 20% rate.
The state financial control noted in the letter that recent amendments made to paras. 197.1.25 of the TCU by the Law of Ukraine of 13.02.15, № 206-VII, which determined the applying of VAT privileges for publications, related to VAT exemption of preparing, manufacturing and distributing of electronic versions of domestic books only (except erotic).
The State Fiscal Service of Ukraine explained that section III of the Tax Code of Ukraine (hereinafter – the TCU) did not limit the rights of customers expenses according to value of goods (works, services) purchased in the taxpayers with legal address and location in the ATO area in the Donetsk and Luhansk areas (letter of the SFS of Ukraine “On the right to charge to expenses the value of goods (works, services) purchased in the taxpayers from the ATO area” of 31.03.15, № 6711/6/99-99-19-02-02-15).
The subject to company income tax – the income with source of origin from Ukraine (and beyond), which is determined by the financial result adjusting to taxation as defined in the financial statements in accordance with the international accounting standards or international standards, on differences arising according to the rules of ch.III of the TCU (paras.134.1.1 of the TCU).
The State Fiscal Service of Ukraine is of the opinion that an entrepreneur cannot be the founder of the company and contribute to the equity capital of commercial company (letter of the SFS of Ukraine “On certain issues of tax accounting by individuals - value added tax payers” of 28.04.15, № 4000/Б/99-99-17-02-02-14).
According to controllers, an entrepreneur does not have the right to own immovable (or movable) property. Therefore, the entrepreneur has a right to acquire, build, build objects of property and transfer ownership right for them only as an individual.
A participant of commercial company could be an individual or legal entity. The commercial company is an owner of the property transferred the ownership to it by the company participants as a contribution to statutory (joint stock) capital (para. 1 of Art. 114, para. 1 of Art. 115 of the Civil Code of Ukraine).
The right to private ownership is enshrined by Art.41 of the Constitution of Ukraine and Art. 325 of the Civil Code of Ukraine: the property rights entities are individuals and legal entities.
The Ministry of Finance of Ukraine approved appropriate instruction by the Order of 20.04.15, № 449 “On Approval of Instruction on the Procedure for calculation and payment of the Unified Contribution for compulsory state social insurance”. This document defines the procedure for calculation and payment of the Unified Contribution, penal sanctions, arrears recovery of insurance funds by insurers. All the innovations are taken into account in this new Instruction. The innovations provided for by Articles 4, 6, 7, 8, 10, 12, 25, paras.92 — 95 ch.VIII “Final and Transitional Provisions” of the Law of Ukraine “On the collection and accounting of the Unified Contribution for compulsory state social insurance” of 08.07.10, № 2464-VI. It is about the application of decreasing coefficient to the rate of the Unified Contribution accrual, the minimum basis for the Unified Contribution accrual, exemption from calculation and payment of the Unified Contribution of mobilized entrepreneurs etc.
The State Treasury Service of Ukraine in its letter of 23.05.15, № 14-11/315-15327 “On compensation transfer of average wage of mobilized employees” clarified that it was not required to open accounts with special use to obtain the compensation of average wage of mobilized employees from the budget. It is known that the actual expenses of the employer are compensated from the budget and the payment procedure of compensation to companies, institutions, organizations within average wage of employees called up for military service during the mobilization does not require to open separate accounts for this.
The Ministry of Social Policy of Ukraine reported on its website that funds for compensation payment of average wage expenses to mobilized employees were transferred to companies, organizations, institutions for the period starting from January 2015.
In this case the compensation from the budget within the average wage to employees called up for regular military service is not provided by the law.
The Ministry of Social Policy of Ukraine in its letter of 24.03.15, № 4053/0/14-15/18 “On payment of monetary compensation for unused social vacation” informs that when the employee dismissal the employer must pay the compensation to him/her for all unused annual leaves and additional vacation to employees, who have children or adult child - disabled from childhood of subgroup A of I group (Art.24 of the Law on vacations). Such additional vacation is considered to be social. The law has no limitation period after which the employee loses the right to the vacation. Therefore if the employee retires and has unused social leave for this year, the monetary compensation should be paid for this period. He/she does not have a right to the leave for this year at a new work place.
The law does not provide the possibility to transfer monetary compensation for unused days of specified social leave to a new employer (when dismissal for reassignment).
The Ministry of Social Policy of Ukraine in its letter of 02.02.15 р. № 102/13/84-15 “On establishing of working day without fixed working hours” notes that current legislation does not prohibit using working day without fixed working hours for employees working part-time.
However, it is indicated in para.2 of Guidelines on the procedure for granting the employees with part-time working day an additional annual leave for the special nature of work, approved by the Ministry of Labor and Social Policy of Ukraine of 10.10.97, № 7, that working day without fixed working hours is not applied for the employees engaged in work part-time. The experts of the Ministry of Social Policy emphasize that these are just recommendations, so the mentioned above document is not a normative legal act.
At the same time it is noticed in the letter: if the employee after the work on the basic position immediately gets down to work on a part-time basis in this institution, that is not possible to perform work periodically beyond normal working hours, so there are no reasons to establish the working day without fixed working hours at the basic position.
