Taxes
The State Fiscal Service of Ukraine in the category 101.16 “ZIR” reported on the procedure for filling in the tax invoice, consisting when the taxpayer’s registration was canceled in the transactions for the determination of tax obligations for goods/services, non-negotiable assets that were not used in taxable transactions within the economic activities.
In the case of drawing up a tax invoice for the purpose of determining when the taxpayer cancels the registration of tax obligations for goods/services, non-current assets, the amount of tax that was included in the tax credit and not used in taxable transactions, within the economic activity in the upper left parts of such invoices in the column “Not subject to the recipient (buyer) because of the reason” is marked “X” and the type of reason “10” should be indicated.
In the column “Recipient (Buyer)” the taxpayer indicates his/her proper name(s), in the line “Individual Tax Number of the Recipient (Buyer)” a conditional individual tax number “600000000000” is inserted, the line “Tax number of the taxpayer or a series (if any) and passport number” should not be filled in.
Section B of the tax invoice is filled in the following order:
- in box 2 “Description (nomenclature) of the seller’s goods/services” – the dates of the drawing and the order numbers of the tax invoices, on the basis of which the tax credit was formed, should be indicated;
- in column 4 “Ukrainian notation” – “UAH” is indicated;
- in box 10 “Supply volumes (tax base) excluding VAT” – it is indicated the value (part of value) of the goods/services, the non-taxable asset, which is taxed, according to the basic rate of tax and the rate of tax 7%, which are applied when tax calculation obligations;
- in column 11 it is indicated the amount of VAT.
Graphs 3.1, 3.2, 3.3, 5 - 9, 12 in this case should not be filled.
Accounting and Reporting
The State Fiscal Service of Ukraine in its letter “On the attribution of the expenses of an individual - entrepreneur to the expenses related to withholding, maintenance and repair of a saddle tractor with a semitrailer” 28.11.2018, No. 4993/Л/99-99-13-01-02-14/ІПК.
When an entrepreneur earns income on the general taxation system, he/she has the right to reflect the costs. But they should be: associated with the receipt of income, documented, given in paragraph 177.4 of TCU.
Costs for the acquisition and withholding of fixed assets of dual-purpose are not included in the expenses of the entrepreneur. A tractor is a dual-purpose vehicle.
Therefore, such an entrepreneur does not have the right to include costs in expenses, connected with withholding, maintenance and repair of a saddle tractor with a semitrailer, which are intended for transportation of cargoes.
The State Fiscal Service of Ukraine in its letter “On the procedure for keeping inventory records by an individual - entrepreneur on the general system of taxation” of 21.11.2018, No. 4903/А/99-99-13-01-02-14/ІПК emphasized that the taxpayer is obliged to keep records of income and expenses, to prepare reports concerning the calculation and payment of taxes and fees.
Entrepreneurs on the general taxation system should keep a record of income and expenses, as well as have valid documents for the goods. At the same time, they are not obliged to keep accounting record.
However, at their own will, entrepreneurs can keep inventory records, in particular using Accounting Standards 9 “Inventories”.
The Ministry of Finance of Ukraine by its Order “On Approval of the Changes to the Form of the Tax Return on Corporate Income Tax” of 19.10.2018, No. 842, approved amendments to the declaration form on the income tax.
As expected, these changes include, in particular:
• rename of the “Code for EDRPOU”, both in the declaration itself and in its annexes on “Tax number or series (if any) and passport number”.
From now on it is stated on this line:
• EDRPOU code,
or
• registration number of the taxpayer assigned to the SFS,
or
• registration number of the taxpayer’s account number;
or
• a series (if any) and a passport number (for individuals who due to their religious beliefs refuse to accept such a number and have a corresponding note in the passport);
• placing of marks in the line 9 of the declaration by the payers of the unified tax;
• addition of ZP application to the declaration by a new line 16.5 “Amount of the excise tax paid for current tax (reporting) period for registered excise waybill for heavy distillates (gas oil), which are classified in the product subcategories 2710 19 43 00, 2710 19 46 00, 2710 19 47 10 according to UCC FEA, if they were used for vehicles classified in subcategories 8602 10 00 00, 8704 10 10 10 according to the UCC FEA. The balance of the amount not taken into account for the current tax (reporting) period does not reduce the income tax in the next tax (reporting) periods (paragraph 15 of subsection 4 of section XX of the Tax Code of Ukraine)”;
• a new version of PI application to 03 PI declaration.
Amendments will take effect from the date of its official publication - roughly 14.12.2018 (order is being prepared for publication in the Official Gazette of Ukraine No. 96 dated 14.12.2018).
The Ministry of Finance of Ukraine by its Order “On Approval of Amendments to the Guidelines on Filing a Tax Declaration on Property Status and Income” of 01.11.2018, No. 866 amended the Instructions for completing the tax declaration on property status and income (hereinafter - the Guidelines).
The Guidelines specified that the declaration also includes the amount of the tax allowance for the acquisition of preschool, out-of-school education, general secondary education of such a payer and/or his family member of the first degree of kinship.
Previously, the list of expenses included in the tax discount was increased. Thus, before the tax allowance, it is possible to include the amount paid by the PIT payer in favor of domestic institutions of preschool, out-of-school education, general secondary education to compensate for the cost of obtaining the education of such a payer and/or his/her family member of the first degree of kinship.
Also, it was eliminated the inaccuracy of filling in line 3 of F1 annex to the declaration.
The order enters into force from the day following the day of its publication.
The Ministry of Finance of Ukraine by its Order “On Approval of Instructional Guidelines for the Report on Management” of 07.12.2018, No. 982, approved the Guidelines for the preparation of a management report.
It should be recall that this report should contain reliable financial and non-financial information about the company’s activities, its state and development prospects, and reveal the main risks and uncertainties of its activities.
As expected, the Office proposes to disclose the information in the report in the following areas:
1) organizational structure and description of the company;
2) activity results;
3) liquidity and liabilities;
4) environmental aspects;
5) social aspects and personnel policy;
6) risks;
7) research and innovation;
8) financial investments;
9) prospects for development;
10) corporate governance (it is prepared by companies - issuers of securities which securities are admitted to trading on stock exchanges or on securities of which it was made a public offer).
This list is not exhaustive. The company may disclose other information it deems appropriate.
All legal entities, except banks, budget institutions, small and microenterprises can use these guidelines.
Approval of the typical management report form is not planned yet.
The Ministry of Finance of Ukraine in its letter “On Disclosure of Financial Statements” of 07.12.2018, No. 35210-06-5/32299, informed that by 30.04.2019 annual financial statements and annual consolidated financial statements, together with an audit report, should be made public on their web by:
• enterprises of public interest (except for large enterprises that are not issuers of securities);
• public joint stock companies;
• subjects of natural monopolies on the national market;
• entities operating in the extractive industries.
Large enterprises that are not securities issuers, medium-sized enterprises, and other financial institutions belonging to micro-enterprises and small enterprises, publish annual financial statements with an audit report starting with financial statements for 2019.
The deadline for submission is no later than June 1 following the reporting year.
At the same time, large that are not securities issuers and medium-sized enterprises that first apply IFRS with the transition date of 01.01.2018 and list interim financial statements for 2018 in accordance with IFRS 1, it is expedient to publish annual financial statements with an audit report starting from the reporting for 2018.
The State Fiscal Service of Ukraine in the category 135.04 “ZIR” answered the question: what line of the payment order “Taxpayer code” or “Purpose of payment” should be kept accounting for tax receipts, fees, payments in integrated payer card (IPC)?
In accordance with paragraph 1 of the Procedure for filling in documents for transfer in the event of payment (collection) of taxes, duties, customs duties, unified payment, implementation of budget reimbursement of value added tax, returning by mistake or excess of funds credited, approved by the Order of the Ministry of Finance dated 24.07.2015 No 666, the procedure for filling in the payment document “Purpose of payment” by the payer is specified.
The requisites filled in by the payer in the line “Purpose of payment” are:
1) the customer code according EDRPOU;
2) the registration number of the taxpayer’s registration card or a series and the passport number of the citizen of Ukraine (for individuals who have a mark in the passport about the right to make any payments for a series and a passport number);
3) registration (accounting) number of the taxpayer, which is assigned by the controlling bodies.
The reflection by the SFSU authority of the amounts of receipts from taxes, fees, payments in the integrated card of the payer should be made in an automatic mode according to the details, filled in the line of the settlement document “Purpose of payment”.
Consequently, when filling in the payment order when paying taxes, fees, it is necessary to fill in correctly the taxpayer’s code in the line “Appointment of payment”.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Recognition of Cash in a Separate Subdivision” of 06.12.2018, No. 5125/6/99-99-14-05-01-15/ ІПК reported that cash withdrawals from cash desks to be executed by cash withdrawals notes or expense information. The documents for issuing cash are signed by the manager and the chief accountant or the person authorized by the manager. Applications for cash withdrawals, calculations should be added to cash issue notes (CIN).
The signature of the company head on CIN is not obligatory, if his/her authorizing inscription is on attached to them documents, applications, accounts. If CIN is signed by the authorized representative of the company, accordingly, it is necessary to indicate the position, surname, name and patronymic of such a person.
Control and Responsibility
The State Fiscal Service of Ukraine by its Order “On Approval of the Register of Large Taxpayers for 2019” of 26.09.2018, No. 617 approved the Register of Large Taxpayers for 2019. The Register includes 1 500 large payers, which volume of income from all activities over the last four consecutive tax (reporting) quarters exceeded EUR 50 million, or the total amount of taxes, duties, and payments paid to the State Budget of Ukraine over the same period exceeded 1 million euros (including tax payments of at least 500 thousand euros).
Some taxpayers of the Large Taxpayer Office did not meet the criteria for the definition of a “large taxpayer” and should be serviced in district SFS from the next year according to their registered location.
Such taxpayers must submit a registration application in paper form to the district SFS authority in form No.1-ОПП with the mark “Change of the location associated with the change of administrative district, or inclusion/not inclusion in the Large Taxpayers Register”.
For failure to submit applications in form No.1-ОПП and violations of the established procedure for registration in the controlling bodies in accordance with para. 117.1 of Art. 117 of the Tax Code of Ukraine, it was established the liability in the form of a fine of UAH 510.
Labor and Salaries
The Ministry of Social Policy of Ukraine by its letter “On the application of the National Classifier of Ukraine DK 003: 2010 “Occupational classification” of 02.10.2018, No. 18921/0/2-18/28, that for the description of the titles of posts one can use the derivative words from Note 1 of the annex B to the National Classifier of Ukraine DK 003: 2010 “Occupational classification”. The Occupational classification provides for a professional grouping of 3436 Assistant Principals.
It offers the following titles of positions as “Assistant to the head of the enterprise (institution, organization)” (code 3436.1), “Assistant to the head of the production department” (code 3436.2), “Assistant to the head of another main department” (code 3436.2), etc.
Therefore, when it comes to the assistant director, the title of the position “Head’s Assistant of the enterprise (institution, organization)” (“Director’s Assistant of the enterprise”) should be used, which is consistent with the professional group 3436 of Occupational classification. In such cases, it is inappropriate to use the original word “assistant” in the title of the position “Director (Head, Other Head) of the enterprise” (code 1210.1).
In the Occupational classification, the names of positions (occupations) are given in the masculine form, except for individual titles. To correct technical errors or to change the name of the profession without changing the codes (for example, “Cleaner” - to “Cleaner of office space” (code 9132), no prior consent of employees is required. Such changes are not related to the change of tasks and responsibilities by occupations, qualification requirements for the employee, wages, etc.
The order of the words in the titles of positions “Director of Finance” (code 1231) and “Financial Director”, “Executive Director” (code 1210.1) and “Executive Officer” does not change their content. However, the names of the posts should correspond to the Occupational Classification.
The Social Insurance Fund of Ukraine in its letter “On the Issuance of temporary disability leave” of 21.09.2018 No. 6-14/Н-1277З-1634 considered issues related to the issue of disability leaves.
When filling the temporary disability leave, the medical doctor must indicate the place of work of the insured person, where his/her work book is kept.
Part 1 of Art. 90 of the Civil Code of Ukraine stipulates that a legal entity must have its own name, which contains information about its organizational legal form and name; the name of the legal entity is indicated in its constituent documents and is entered the unified state register.
The requirements for writing the name of a legal entity, its separate subdivision, a public formation that does not have the status of a legal entity, except for the organization of a trade union, are established by the Ministry of Justice of Ukraine (Part 7 of Art. 16 of the Law of Ukraine “On State Registration of Legal Entities, Individual Entrepreneurs and public formations” of 15.05.2003 No. 755-IV).
According to para. 1.4. of the requirement to write the name of a legal entity, its separate subdivision, a public formation that does not have the status of a legal entity, in addition to the organization of a trade union, approved by the order of the Ministry of Justice of Ukraine of 05.03.2012 No. 368/5 (hereinafter - Requirements), a legal entity may have a shortened name, except for the full name.
Paragraphs 1.1 and 1.3 of the Requirements provide for that the name of a legal entity should contain information about its organizational and legal form (except for state authorities, local self-government bodies, bodies of power of the Autonomous Republic of Crimea, state and communal organizations, institutions) and the name. The name of the legal entity cannot contain a link to the legal form.
The name of the separated unit should contain the words “separated subdivision” (“branch”, “representation”, etc.) and indicate the affiliation with the legal entity that created the separated subdivision (para. 1.8 of Requirements).
Para. 3.1. of Requirements stipulates that the name of the legal entity is taken in quotation marks and is indicated immediately after the organizational and legal form of the business entity (except for state authorities, local self-government bodies, bodies of the Autonomous Republic of Crimea, state and communal organizations, institutions).
In addition, Art. 93 of the Civil Code of Ukraine stipulates that the legal entity’s location is the actual place of business or location of the office from which the day-to-day management of the legal entity (mainly management) is carried out and the management and accounting are carried out.
The branch is a separate subdivision of a legal entity located outside its location and carries out all or part of its functions (Art.95 of the Civil Code of Ukraine).
Taking into account the norms of the Civil Code of Ukraine, Requirements and Regulations of the Guidelines on the procedure for filling in the temporary disability leave approved by the order of the Ministry of Health of Ukraine, the Ministry of Labor and Social Policy of Ukraine, the Fund for Social Insurance for Temporary Disability, the Fund for Social Insurance against Accidents at Work and Professional Diseases of Ukraine of 03.11.2004 No. 532/274/136-oc /1406, when filling the part of the face of the form, the temporary disability leave issued to a disabled person must a fully specify the name of the legal entity or its separate subdivision (stating to the belonging to a legal entity) and their location. Such requirements apply to the writing of the name and location of both health care facilities and organizations, institutions, enterprises.
The Ministry of Social Policy of Ukraine in its letter “On Determining the Title of the Position of the Head of the Audit Firm” of 09.11.2017, No. 1625/0/102-18/284 provided clarification regarding the name of the position of the head of the audit firm.
Since the National Classifier of Ukraine DK 003: 2010 “Classifier of Occupations” (hereinafter – Classifier) provides for the position title of “Director (Head, Other Head) of the enterprise” with code 1210.1, which belongs to the professional group “Heads of enterprises, institutions and organizations”, and “Director of a small firm (insurance, auditing, advertising, etc.)”, “Manager of agency (insurance, trading, real estate, advertising, etc.)” with code 1317 belonging to a professional group “Managers of small enterprises without management apparatus in a commercial manner service”.
Due to the fact that it is impossible to foresee all directions of the use of certain positions (professions) in different economic activities, it is recommended to apply the provisions of Appendix B to the Classifier, in particular Note 2, to create new titles of positions (professions).
According to this note, the basic professional titles of works (positions, occupations) contained in the current Classifier can be expanded for internal use by terms and words that specify the place of work, work performed, the scope of activities, subject to the laconicism of the statement, unless otherwise provided in the Classifier or relevant regulatory acts.
Consequently, based on the constituent documents of the respective audit firms, the detailed names of the positions “Director of the audit firm”, “Audit firm head” with the code 1210.1 or “Director of the audit firm”, “Audit firm manager” with the code 1317, are created from the specified basic names.
The State Service of Ukraine on Labor in its letter “On granting leave to employees” of 20.09.2018 No. 4440/4/4.1-315-18 reported that the annual main leave was granted to employees for a period of not less than 24 calendar days for the worked working year. It is prohibited not to grant an annual leave of full duration for two consecutive years.
At the request of the employee, part of the annual leave is replaced by monetary compensation. The duration of the annual and additional leave granted to the employee may not be less than 24 calendar days.
When an employee quits, he/she is paid monetary compensation for all the days of annual leave that he/she has not used. Violation of the legislation on leave, it is provided for the financial liability in the amount of minimum wage.
Financial Services Market
The National Bank of Ukraine by its Resolution “On Amendments to the Regulation on the Identification of Bank-Related Persons” of November 26, 2018, No. 125, aimed at increasing the efficiency of the process of managing transactions with persons related to banks, enabled commercial banks to independently establish a procedure for approving the list Bank related persons.
In addition, the term for which the bank undertakes to identify the person as a bank related to the decision of the National Bank in the statistical reporting, as well as the procedure for determining the person not related to the bank in connection with the loss of that person’s connection characteristics through some time.
In accordance with the approved changes, the bank should apply to the National Bank with a request for the loss of connecting features of a person previously recognized by the regulator of a related party with the bank, but has eventually lost connotations, to obtain approval of the possibility of excluding such a person from the list of individuals connected with banks.
The bank’s application must be substantiated, that is, the fact of loss of bonding must be documented.
The Resolution enters into force on November 28, 2018.
The National Bank of Ukraine adopted the Resolution “On Approval of the Rules for Determining Payment Characteristics and Exchange of Banknotes, Exchange and Turnover Coins of the National Currency of Ukraine” of 03.12.2018, No. 134 (hereinafter - Resolution No. 134). The document states that significantly depreciated hryvnia notes from individuals and legal entities in regions where there are no NBU units are accepted by authorized banks that have the authority to hold the National Bank’s cash reserves.
It is about badly damaged banknotes that have lost their payment characteristics due to fires, floods, pollution with chemicals, etc.
Authorized banks will not inspect such banknotes. They will pack them with maximum integrity preservation and transfer them to the National Bank as questionable for research, together with a statement and an appropriate certificate for withdrawing/accepting banknotes for research.
It should be recalled that previously significantly depreciated banknotes for conducting research were taken directly by regional subdivisions of the National Bank of Ukraine.
Only three banks - Oshchadbank, Privatbank and Raiffeisen Bank Aval, have the status of an authorized bank, which can be involved in the storage of cash of the National Bank.
Today, the National Bank’s units were preserved in the following regions: Dnipropetrovsk, Zaporizhia, Odesa, Kharkiv, Khmelnytsky, Lviv regions and Kyiv city.
Also, Resolution No. 134 specified certain signs of deterioration and damage to banknotes and coins.
Regulation No. 134 comes into force on January 2, 2019.
The National Bank of Ukraine adopted the Resolution “On Approval of the Changes to the Guidelines on the Procedure for Regulating the Activities of Banks in Ukraine” of 18.12.2018 No. 139, which introduces from July 1, 2019 updated requirements for determining by the bank when calculating the credit risk levels of a group of related counterparties which carry a joint economic risk.
These requirements are based on the standards of the Basel Committee on Banking Supervision, “Supervisory mechanism for valuation and control of large credit risks”.
The presence of significant concentration of credit risk for banks in relation to individual counterparties can lead to a material loss of the bank’s capital due to financial problems in such counterparties. If the contractors are linked legally or economically, then if there are problems with the fulfillment of their obligations to one counterparty, others are likely to have similar problems.
In accordance with the new requirements, banks should define a group of related counterparties, provided that such counterparties are linked by a control relationship or economic dependence. This obliges banks to thoroughly examine their counterparties: their ownership structure, business environment, financial reporting, etc.
The National Bank also takes further measures to limit lending by banks to related persons.
Thus, the requirement is introduced to reduce the regulatory capital of the bank by the amount of exceeding the actual value of the aggregate amount of debt of persons connected with the bank over the maximum allowable value of such debt. This requirement takes effect 30 days after the official publication of the resolution.
The Other Things
The International Monetary Fund made public a memorandum with Ukraine on economic and financial policies under the new program for 2018-2020.
The memorandum contains a statement of policy and strategy to be followed by Ukraine, as well as specific steps for review and receipt of the next tranches. The document also includes areas for monetary and exchange rate policy, budget policy, as well as policies in the energy and financial sectors, management of state-owned enterprises and business climate.
