The Ministry of Finance of Ukraine by Order No. 239 of May 9, 2023 ‘On Amendments to Order No. 841 of the Ministry of Finance of Ukraine of September 28, 2015’ replaced Order No. 841 of September 28, 2015 (as amended by Order of the Ministry of Finance No. 350 of March 10, 2016) in accordance with the provisions of Law of Ukraine No. 2888-IX of January 12, 2023 ‘On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine regarding Payment Services’.
The order approved the improved form of the Report on the use of funds issued for a business trip or that should be reported, in terms of expanding the possibilities of using different types of signatures (signing by hand or using an electronic digital signature in accordance with the requirements of the laws of Ukraine ‘On Electronic Documents and Electronic Document Circulation’, ‘On Electronic Trust Services’).
The changes are required in connection with the update of item 170.9 of the Tax Code, which was introduced by Law of Ukraine ‘On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine regarding Payment Services’ No. 2888-IX of January 12, 2023.
Law No. 2888, in particular, updated paragraph 170.9.4 of the Tax Code, which now provides for filling out a report on the use of funds/electronic money issued for a business trip or that should be reported. This document is drawn up and submitted by taxpayers (in paper or electronic form) in the form established by the Ministry of Finance, in the event of:
a) availability of taxable income for the purpose of calculating the amount of tax;
b) the taxpayer's use of cash in excess of the amount of daily expenses (including the amount obtained with the use of payment instruments).
The legislative changes also provide that if during a business trip or the performance of certain civil legal actions, the taxpayer used payment instruments, including corporate (business) payment instruments or personal payment instruments, or their details for cashless payments and/or for receiving cash within sums of daily expenses and in the absence of taxable income, a report on the use of funds/electronic money issued for a business trip or that should be reported is not compiled and submitted.
The National Bank of Ukraine is preparing to ease currency restrictions and return to exchange rate flexibility. On June 29, 2023, the Board of the NBU approved the Strategy for easing currency restrictions, transitioning to greater exchange rate flexibility and returning to inflation targeting (hereinafter referred to as the Strategy).
The development and implementation of the Strategy is aimed at fulfilling the provisions of the Basic principles of monetary policy for the period of martial law, approved by the Council of the NBU in April 2022. They envisage a gradual return to inflation targeting, because this regime makes it possible to ensure the simultaneous achievement of the NBU's goals of price and financial stability and support of sustainable economic growth in the long term.
The strategy consists of three main directions. This is the easing of currency restrictions, the transition to greater exchange rate flexibility, and a return to the principles of inflation targeting. Each direction contains a general description of the sequence of stages, key priorities, principles and proper prerequisites for the implementation of the Strategy.
The Verkhovna Rada of Ukraine has adopted in the second reading and as a whole bill No. 5762 ‘On Amendments to Some Laws of Ukraine on Simplifying the Conditions for the Production of Distillates by Small Business Entities’. The document was initiated by the Ministry of Agrarian Policy and Food of Ukraine.
The bill is aimed at stimulating the development and legalization of small entrepreneurship in the sphere of the production of alcohol distillates and alcoholic beverages. And also to increase the domestic production of products with high added value, which will contribute to the filling of budgets at all levels.
The main provisions of the bill propose:
- to determine that small producers of distillates are business entities that produce alcohol distillates on equipment whose production capacity does not exceed 20,000 decaliters in terms of 100% alcohol per calendar year, and alcoholic beverages using alcohol distillates exclusively of own production (not purchased), followed by their bottling in consumer containers and sale in a volume of no more than 10,000 decalitres per calendar year;
- to establish requirements for the material and technical base of small distillate producers;
- to obtain a production license, submit a declaration of compliance with the requirements of the material and technical base registered by the State Production and Consumer Service instead of a production certificate (paid procedure);
- to reduce the cost of a license for wholesale trade in spirits for small producers of distillates (from UAH 500,000 to UAH 30,000);
- to allow the use of all alcoholic distillates produced from agricultural products for the production of alcoholic beverages;
- to give the right to small producers of distillates to submit a report on the volumes of produced and sold products quarterly (instead of monthly) and reduce the fine for failure to submit or incorrect submission of such reporting (from UAH 17,500 to UAH 1,020);
- to unify the definition of the terms ethyl alcohol, alcohol distillate.
The law enters into force three months from the day following its publication.
The President of Ukraine has signed bill No. 9342 of May 29, 2023 ‘On Amendments to Certain Legislative Acts of Ukraine Regarding Certain Issues Related to Military Service During Martial Law’.
The main objective of the Law is to pay military servicemen an additional monthly bonus of UAH 30,000 to 100,000. The supplement is paid in proportion to the time of combat (special) tasks in the order, amounts and conditions established by the Cabinet of Ministers.
Thus, additional payments have been established for military personnel:
- from UAH 30,000 to 100,000 – to military personnel performing combat (special) tasks;
- UAH 20,100 – to military personnel who, due to an injury, are recognized as having limited fitness and placed under the command of the relevant commander;
- UAH 6,000 – for conscripts;
- UAH 2,350 – for cadets;
- from UAH 15,000 to 30,000 – for instructors in military units.
It is also established that during martial law, military personnel may be granted a part of annual basic leave lasting 30 calendar days, as well as leave for family reasons and for other valid reasons with preservation of financial support lasting no more than 10 calendar days.
The Verkhovna Rada of Ukraine has adopted bill No. 8401 in the second reading.
All changes provided for by this law shall enter into force on August 1, 2023.
1. The 2% single tax system is abolished, the corresponding transitional provisions to other taxation systems are regulated.
2. The moratorium on documentary audits remains valid, taking into account the following:
- documentary unscheduled audits remain permitted for certain reasons;
- scheduled audits until the end of martial law are carried out exclusively in relation to business entities in the field of production and/or sale of excise goods, in the field of gaming business, and those that provide financial and payment services.
3. Until the end of martial law, if the payers pay the pre-calculated amount of taxes or VAT within 30 days based on the result of the audit, they are exempted from the fines and penalties charged for this amount.
4. In the period from August 1, 2023 until the end of the martial law, a moratorium is established on the conduct of documentary audits on the payment of single social contribution.
5. Taxpayers are exempted from liability for violations in the field of application of the cash registers, committed in the period from January 1, 2022 to October 1, 2023, as well as for violations in the field of payment of single social contribution, committed from the beginning of martial law and until August 1, 2023.
6. ‘Technical debt’ in the electronic account will not be taken into account when determining the possibility of the payer to continue using the simplified system.
7. The right to voluntary payment of single tax for front-line territories (including territories of possible hostilities) is preserved.
8. Taxpayers are released from financial responsibility for violations in the field of application of the cash registers (except during the trade of excise goods), if they are committed in the front-line territories (including in the territories of possible hostilities).
9. Taxpayers in the frontline territories (including in the territories of possible hostilities) will not be subject to tax debt repayment measures.
10. individual entrepreneurs-payers of the single tax without VAT are given the opportunity to indicate the names of goods (services) in a simplified form in settlement documents.
The final text of the law has not yet been made public.
The Cabinet of Ministers of Ukraine has supported the comprehensive legislative initiative of the Ministry of Social Policy regarding the proportional calculation of insurance experience for those working outside of Ukraine.
In particular, the following important issues were settled within its limits:
1. Payment of pensions to citizens of Ukraine who live in the temporarily occupied territories or during the temporary occupation moved to the territory controlled by Ukraine.
2. Payment of pensions to persons temporarily living outside Ukraine.
Thus, for citizens from the TOT, it is provided that the payment of the Ukrainian pension is made on the condition of non-receipt of a pension from the pension provision bodies of the russian federation.
Since the exchange of information between Ukraine and russia is currently impossible, it is proposed to introduce the declarative principle. Renewal and payment of pensions will be carried out on the basis of a statement in which the person informs about non-receipt of a pension from the russian federation.
At the same time, pensions will be paid to current accounts opened in Ukrainian banks to citizens who have found refuge abroad. Also, such persons will need to undergo physical identification by December 31 of each year.
It is assumed that physical identification can take place remotely. The first way is with the help of Diya.Signature (Diya ID) in a personal electronic account on the web portal of electronic services of the Pension Fund. The second method is a certificate of residence by a consular official.
