Legislation Overview (June 2016)

Taxes

VAT

The State Fiscal Service of Ukraine in its letter “On reflection of theft of fixed assets in tax accounting of VAT” of 27.05.2016, № 11679/6/99-95-42-01-15 considered the mentioned issue and reported the following.

According to Sec. 2 of para.189.9 of TCU, establishing the fact of theft of fixed assets, which is confirmed by law, does not lead to accrual of tax liabilities by the payer of value added tax (hereinafter − VAT), regardless of whether the perpetrators found involved in theft and whether the losses are incurred form such persons.

 At the same time due to the fact that the fixed assets, which were stolen and during the acquisition of which the tax credit was formed, could not be used in economic activities, the taxpayer is obliged to accrue tax liabilities and make not later than the last day of the reporting (tax) period in which the fact of theft of fixed assets, and to register consolidated tax invoice in the Unified Register of tax invoices, based on their net fixed assets prevailing at the beginning of the reporting (tax) period during which such transactions to be made (without accounting of noncurrent assets − based on the regular price) (pp. “г” of para. 198.5 of TCU).

The State Fiscal Service of Ukraine in its letter “On peculiarities of determination of the amounts of VAT reimbursement to agricultural producers in case of exporting of own-produced agricultural products from the customs territory of Ukraine” of 13.06.2016, № 13065/6/99-99-12-02-01-15 considered the mentioned issue.

Transactions of goods exportation from the customs territory of Ukraine by the agricultural company − subject to special tax regime of own-produced agricultural products should be the subject to the value added tax (hereinafter – VAT) at a zero rate and reflected in the declaration 0121-0123 on condition of confirmation of such exportation of goods from the customs territory of Ukraine duly completed by customs declaration.

In this case the VAT amounts paid to the suppliers by the subject to special tax regime when purchasing goods/services, which involved in the production of agricultural products exported from the customs territory of Ukraine and included in the tax credit, by decision of the taxpayer could be transferred from the 0121 declaration to 0110 declaration by reflection in line 14 of 0121 declaration with the sign “-“ in line 14 of 0110 declaration − with the sign “+”.

The tax amounts transferred to line 14 of 0110 declaration could participate in the calculation of the amount, which is the subject to budgetary compensation in the generally established procedure, determined by Art.200 of the Tax Code of Ukraine (hereinafter – TCU).

The Ministry of Finance Ukraine by its Order “On approval of amendments to some legislative acts of the Ministry of Finance of Ukraine” of 25.05.2016, № 503 amended the form of VAT return, namely:

• lines “300000000000” і “500000000000” of Table 1 and line “generally at the basic rate and at 7% rate” of Table 2 of Annex 5 to VAT return were excluded;
• notice “*” of Annex 9 to VAT return was presented as follows: “*Twelve consecutive previous reporting (tax) periods in aggregate. For newly created payer − reporting tax period”;
• typing errors in lines 11.1 of Tables 2 and 3 were corrected in Annex 10 to VAT return;
• Annexes 2 and 3 to VAT return are set out in a new version. Now it is not required to indicate the buyer’s TIN in Appendix 2 “Information on the amount of the negative value of the reporting (tax) period, which is included in the tax credit for the next reporting (tax) period (D2)”, and the Table 2 “Explanation of tax amount actually paid in previous and reporting (tax) period to suppliers of goods/services or to the State Budget of Ukraine” appeared in Annex 3 “Calculation of VAT refund (D3)”.

Corporate Income Tax

The State Fiscal Service of Ukraine in its letter “On tax (reporting) period, a manufacturer of agricultural products, which from 01.01.2016 transited from the unified tax payment of the four group to the general taxation system” of 31.05.2016, № 11819/6/99-99-15-02-02-15 explained: if the manufacturer of agricultural products, which from 01.01.2016 transited from the unified tax payment of the four group to the general taxation system, received for the previous reporting (tax) year, income from the sale of agricultural products of own production in the amount of not less than 50% of total income, he/she was entitled to use the annual tax period that began on July 1 of the current fiscal year and ended on June 30 of the next fiscal year for the purposes of the income tax.

Such a payer should submit individually corporate income tax return, which form approved by the order of the Ministry of Finance of 20.10.2015, № 897 (hereinafter − the Declaration), for the period from 01.01.2016 to 01.07.2016, and since July 1, 2016 it is allowed to use the annual tax period that begins on July 1 of the current fiscal year and ends on June 30 of the next fiscal year.

In addition, in order to identify the manufacturer of agricultural products in the preparation of the Declaration in the box 9 “Special Notes” should be put a mark on his/her belonging to the respective category. In case of application by the manufacturer of agricultural products of the tax (reporting) period, which starts from the first calendar day of the tax (reporting) period and ends on the last calendar day of the tax (reporting) period, i.e. from 1 January to 31 December of the reporting year, the mark in the box 9 “Special Notes” of the Declaration of belonging to the category of the manufacturer of agricultural products should not be set. In addition, the order of calculation and payment of income tax should be conducted by such a company on a general basis.

Other Taxes and Fees

The State Fiscal Service of Ukraine in its letter “On registration as the excise tax payer on the sale of fuel when the oil is changed during maintenance and car repairs” of 30.05.2016, № 11785/6/99-99-12-03-03-15 reported: business entities that carry out the oil change of the engine during maintenance and repair of motor vehicles, are not the subject to the registration as the excise tax payers on the sale of fuel.

Controllers explained that during the provision of corresponding services, the indicated excisable goods (products) was used as expendable material, in other words directly implementation of excise goods did not occur.

The State Fiscal Service of Ukraine in its letter “On the payment of excise tax in the implementation of wholesale trade in fuel and the reflection of sales (wholesale) of fuel after 01.03.2016 in the Declaration of excise tax” of 09.06.2016, № 12691/6/99-99-12-03-03-15 reminded: according to para. 49.21 of the Tax Code of Ukraine (hereinafter − TCU) the payers defined by paragraphs 212.1.15 of TCU (i.e. persons who realize fuel) as well as taxpayers who have a valid (including suspended) licenses for the right to carrying out of activities of excisable products, which is subject to licensing under the legislation, are required to submit tax invoices for each reporting period established by TCU, regardless of whether such payers implemented business activities in the reporting period or not.

Therefore, before the entry into force of a new form of declaration, payers of excise tax defined by paragraphs 212.1.15 of TCU, regardless of whether they implemented business activities in the reporting period or not, are obliged to submit a tax invoice of excise tax at the statutory declaration form, approved by the Ministry of Finance of Ukraine of 23.01.2015, № 14, to the controlling authority at main place of registration.

In the absence of subject to the excise tax, the tax invoice should be submitted by such a payer through the filling the title page to it (without filling l. 05), filling in lines 15 and 16 of Annex 1 to the declaration with zeros and putting them to the section B of the declaration (in box 1).

In the case when subject to the excise tax arises, i.e. the availability of transactions on implementation of fuel volume over the volumes defined by paras. 213.1.12 of TCU, the taxpayers of its implementation should declare these obligations by filling the Annex 1 of the declaration and putting the amount of tax liability in the section B of the declaration (box B 1).

Accounting and Reporting

The State Fiscal Service of Ukraine (hereinafter − SFSU) in its letter “On the use of cash registers dated 27.05.2016, № 5585/С/99-99-22-07-03-14 provided clarification on the use of cash registers (hereinafter − CR) for individual- entrepreneurs in the simplified tax system.

Thus, controllers reminded: in case of excess of revenue of more than UAH 1.0 million in a calendar year, the use of CR for such a unified tax payer (hereinafter − unified tax payer) is mandatory. The use of cash registers begins from the first day of the first month of the quarter following the occurrence of such excess, and continues in all subsequent tax periods for validity of the certificate of unified tax payer.

At the same time, SFSU experts noted: in the case of transition of a unified tax payer of the second group to the payment of other taxes and duties, and choosing simplified tax system from the next calendar year, the income for the previous reporting period should be considered as income of such a payer.

The State Fiscal Service of Ukraine in subcategories 101.17 “ZIR” explained how should be reflected the data on returnable tare (container deposit).

Thus, it should be entered to the section A of tax invoice (hereinafter − TI) the summarizing data on transactions, on which the TI to be prepared, including:

• it should be indicated in line I the total amount of money payable taking into account the value added tax (hereinafter − VAT);
• the data on returnable tare (container deposit) should be indicated in line X.

The cost of container is defined in the agreement (contract) as returnable (deposit) and it should not be included in the tax base.

In other words, the data on returnable tare (container deposit), indicated in line X of section A, should not be accounted in the total amount of funds payable including VAT (line I of section A of TI).

The Ministry of Environment and Natural Resources of Ukraine by its Order “On approval of forms for reporting on accounting of mineral resources and instructions for their filling” of 14.03.2016, № 97 approved forms of reporting on accounting of mineral resources, including:

• the reporting form № 5-ГР (flammable solid, metallic and nonmetallic minerals) (annual) “Reporting balance of mineral resources for 20____” – should be submitted to 5 February following the reporting year to the State Service of Geology and Mineral Resources of Ukraine by the mineral resources users, determined by Art. 13 of the Code of Ukraine on mineral resources, performing the use of subsoil on the basis and within the deposit (area), determined by special permit for the use of subsoil;
• the reporting form № 6-ГР (oil, natural gas, condensate, ethane, propane, butane, helium) (annual) Reporting balance of mineral resources for 20____” – should be submitted to 5 February following the reporting year to the  State Service of Geology and Mineral Resources of Ukraine by the mineral resources users, determined by para.15 of Art.1 of the Law of Ukraine “On Oil and Gas” performing the use of subsoil on the basis and within the deposit (area) of oil and gas mineral resources, determined by special permit for use of oil and gas mineral resources;
• the reporting form № 7-ГР (underground water) (annual) “Reporting balance of use of underground waters for 20____” − should be submitted to 20 January following the reporting year to the  State Service of Geology and Mineral Resources of Ukraine by the mineral resources users, determined by Art. 13 of the Code of Ukraine on mineral resources, performing the use of subsoil on the basis and within the deposit (area) of mineral resources, determined by special permit for the use of subsoil.

The State Fiscal Service of Ukraine by its Order “On approval of the State register of cash registers” of 16.06.2016, № 535 updated the State register of cash registers (hereinafter – the State Register of cash registers).

The updated State Register of cash registers includes 71 cash registers permitted to primary registration. One specialized electronic cash register of purchase and sale of foreign currency entered into current State register of cash registers compared with its predecessor.

The State Fiscal Service of Ukraine in its letter “On practical application of norms of tax legislation” of 23.05.2016, № 5331/М/99-99-13-02-03-14 notes that in case of use of train electronic travel/transportation document, the basis for compensation of expenses for its acquisition is boarding document in hard copy (under condition of baggage transportation − transportation documents in hard copy, in case of special services order (including services using a set of bedding, seats booking) − document on services in hard copy).

Boarding document, as well as transportation document and documents of return and services in hard copies are the payment documents (transportation tickets).

Labor and Salaries

The Ministry of Social Policy of Ukraine in its letter “On unpaid leave” of 29.04.2016, № 243/13/116-16 considered the mentioned issue.

In particular, para.2 of Art.4 of the Law of Ukraine “On leave” of 15.11.1996, № 504/96-VR (hereinafter − the Law on leave) provides for: law, collective agreement and employment contract are entitled to establish other types of vacations. This norm does not apply to unpaid leave, because this type of leave is defined by the Law on leave, and particular duration of such leaves is established.

At the same time, according to para.3 of Art.23 of the Law on leave, other types of leave provided for by a collective agreement and employment contract should be paid. Establishing of other types of unpaid leaves is a violation of labor legislation.

The Ministry of Social Policy of Ukraine in its letter “On keeping of time sheet of mobilized worker and duration of holidays for certain categories of workers” of 05.06.15, № 225/06/18615 reported: if an employee who is entitled to a social additional leave under Art.19 of the Law on leave, did not expressed the desire to use it for several years, there is not any violations of the legislation on leave by the employer, therefore, there is no reason to bring the latter to justice. The ban on the failure to leaves of full duration for two consecutive years (see ch.5, Art. 11 of the Law on leave) only applies to annual leave.

At the same time, the failure to use social leave for a few years at own will of an employee does not deprive him/her of the right to use such leave from previous years, and in the case of dismissal irrespective of the reason, he/she should be paid compensation for all unused vacation days, according to Art. 24 of the Law on leave.

The legislation of Ukraine does not provide the limitation period, after which it is lost the right to additional social leave to employees, who have children or adult disabled child.

Concerning the use of unused social leave by an employee for the previous few years in the current year in a row, the issue should be solved by consent of employee and employer.

Mobilization and ATO

The Ministry of Social Policy of Ukraine in its letter “On provision of explanation” of 18.05.2016, № 565/13/84-16 notes that the day of the actual demobilization is considered to be the day of exclusion of a person from the list of military personnel in connection with the dismissal of military service (issued by order of the military unit, about what should be made an entry in the military ticket).

Thus, before the day of actual demobilization, preservation of average pay should be carried out in accordance with Article 119 of the Labor Code.

The employee must come to work after his/her dismissal from military service, registration for military service and if necessary transportation to the place of residence (stay). During this period, preservation and payment of average wages are performed according to Art.21 of the Law of Ukraine “On military obligation and Military Service”. During these days the average wages for employee is calculated taking into account the provisions of the Procedure № 100 with the same average wage, under which the payment was carried out during the period of military service.

Control and Responsibility

The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On amendments to some legislative acts of Ukraine concerning the management of state and communal property” of 09.09.2015, № 3062, having made proposals of the President of Ukraine.

According to the Law, annual statements and consolidated statements, reporting of state unitary enterprises and enterprises with state share in the authorized capital of more than 50% are the subject to statutory audit.

In addition, the following is the subject to statutory disclosure under the law:

• quarterly and annual financial statements of the company for the last three years;
• annual audit report for the last three years;
• biographical information of members of the supervisory board and head of the company;
• annual reports of the supervisory board;
• decision of government corporation concerning the company;
• information about contracts, details of which should be made public in accordance with the law.

The company also promulgates annual and annual consolidated financial statements together with the audit report before 30 April of the year following the reporting one.

The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to the comprehensive list of grounds under which inspection (re-examination) of goods, transport vehicles for commercial purpose by the customs authorities of Ukraine could be conducted, approved by resolution of Government dated 23.05.2012, № 467” (hereinafter − list № 467 ) of 25.05.2016, № 341 made amendments to this list.

Taking into account the amendments, one of the grounds in cases established by the legislation should be recognized the obtaining of letters of attorney from law enforcement authorities in the context of criminal proceedings, operational and investigative or counterintelligence cases.

First of all (but not exclusively) initial and amended wording of para.14 of the list № 467 are different in the following:

1) before the amendment  it was about  written request but not about the letter of attorney in para.14 of the list № 467;

2) there were not established any forms of address but there were only demands to its content;

3) there was no warning that appeal should be issued under criminal proceedings, operational and investigative or counterintelligence cases.

The Cabinet of Ministers of Ukraine approved the Resolution “On approval of Procedure of photo and video fixation of customs and other formalities, which are carried out by the supervisory authorities” of 08.06.2016, № 370 (hereinafter − Resolution № 370), which should come into force 01.07.2016.

Resolution № 370 provides for the introduction of photo and video fixation of customs formalities, including examination (re-examination) of goods, vehicles and other formalities, which are carried out by the supervisory authorities.

Thus, the mandatory photo and video fixation during the customs formalities and other regulatory authorities will be implemented in stages through the use by customs officers of individual camcorders (video recorders) with their provision to respective divisions.

In total it is provided the implementation of mandatory video fixation of examination (re-examination) of goods, vehicles at crossing points across the state border, in the areas of customs control of internal customs, and during the execution of interagency mobile groups of measures to prevent and detect violations of the law on state customs.

It is also provided the attachment of video recordings to customs declarations by means of functional automated system of customs clearance of the State Fiscal Service of Ukraine (hereinafter − SFSU). In particular by the results of examination (re-examination) of goods, vehicles, during which photo and video fixation to be made, the official agency of revenues and duties should provide:

• entering to the examination acts of their electronic copies of reliable and complete information on the implementation of photographing, video recording;
• saving files with the results of the implementation of photo and/or video recording on the server of SFSU and attachment of such files if technically feasible to customs declarations or to information on transfer of goods and vehicles through the customs border of Ukraine.

The Ministry of Finance of Ukraine by its Order “On Amendments to the Procedure for the submission of reports on the opening/closing of accounts of taxpayers in banks and other financial institutions to supervisory authorities” of 18.05.2016, № 488 amended the Procedure for submission of reports of opening/closing the accounts of taxpayers in banks and other financial institutions to the supervisory authorities, approved by the Ministry of Finance dated 18.08.2015 p., № 721.

Upon entry into force of amendments, information discrepancy on:

• tax number or passport number and series (for the individual, who has a mark in the passport on the right to make any payments upon the series and passport number);
• name (full legal name);
• tax address of the taxpayer, submitted in notification of opening or closing of accounts, this information in the State Register of individuals of Ukraine, the Unified State Register of Legal Entities and individuals-entrepreneurs and community groups (hereinafter – USR) and single data bank of taxpayers-legal entities will not be recognized as the ground for refusing to register the account by the supervisory authority.

The Ministry of Justice of Ukraine by its order “On approval of the Procedure of provision of information from the Unified State Register of Legal Entities and individuals − entrepreneurs and community groups” of 10.06.2015, № 1657/5 approved the procedure for providing information from the Unified State Register of Legal Entities and individuals-entrepreneurs and community groups (hereinafter – Procedure).

Thus, it is determined in para. 3 of the Procedure that information from the USR provided in hard copy or soft copy, both equally valid and contain Obligatory Reference to the USR, except documents contained in the registration case and provided in hard copy.

The following should be provided in hard copy:

• extract from the USR;
• entry from the USR;
• documents contained in registration case of the legal entity, community groups, which has no legal status, an individual − entrepreneur (hereinafter – registration case) that are provided by the state registrar of the subject to the state registration, which is authorized according to the law to keep registration cases in hard copy by making copies of documents stamped with the seal and signature of the state registrar on each page.

The following should be provided in soft copy:

• information from the USR through the portal of electronic services;
• information from the USR in database format or in another format in real time on the basis of contracts concluded with the technical manager of the USR.

Extract from the USR in hard copy will be provided at the request of the applicant by reference to the authorized subject to the state registration, centre of administrative services or notary. An authorized person to state registration, centre of administrative services, notary using the software means of the USR should form and print the request, where the applicant should put his/her own signature (in the absence of comments to the information given in it).

Financial Market

The Deposit Insurance Fund (hereinafter − the Fund) in its letter “On calculation of time limits for acceptance of creditor claims” of 25.05.2016, № 27­24709/16 explained: creditors have the right to declare to the Fund their claims to the bank within 30 days after the date of publication of information about the revocation of the banking license, bank liquidation.

Since the course of the period starts from the day following the calendar date or an event related to its beginning, and the claims of creditors should be accepted of the day following the publication of information about the revocation of the banking license, bank liquidation.

The Fund terminates acceptance of the claims of creditors after 30 days from the date of publication of information about the revocation of the banking license, bank liquidation. Therefore, the last day for claiming of such claims is the last day of this 30 days period.

However, if the last day of the period falls on the weekend, holiday or another day off determined by the law, the expiry day is the first working day.

The National Bank of Ukraine approved the Resolution “On the regulation of the situation in the monetary and foreign exchange markets of Ukraine” of 07.06.2016, № 342. This document:

1. Reduced the rate of mandatory sale of revenues to Ukraine in foreign currency in favor of legal entities from 75% to 65%.

2. Increased the maximum amount of sales of cash foreign currency and banking metals from UAH 6 to 12 thousand in equivalent. In addition, the limit on the amount of the transaction for the sale of banking metals would not apply to coins made from precious metals (including investment coins of Ukraine).

3. Clients of banks are allowed to withdraw cash in foreign currency and banking metals from accounts in the amount of up to UAH 100 thousand per day instead of 50 thousand. Also, the restriction on withdrawals of cash in national currency is removed, which up to now amounted to UAH 500 thousand per day.

4. It was made a decision to allow the repatriation of dividends accrued to foreign investors for 2014-2015.

The above-mentioned standards, except changes on the dividend repatriation, come into force 06.09.2016 and valid until 14.09.2016 inclusive. Norms on the dividend repatriation will be valid from 13.06.2016.

The National Bank of Ukraine (hereinafter − the NBU) by the Resolution of the Board “On Amendments to Certain legal acts of the National Bank of Ukraine” of 07.06.2016, № 341 (hereinafter − the Resolution № 341) simplified the procedure for currency exchange transactions. Amendments indicated in the above Resolution enter into force on 15.06.2016.

Thus, banks and financial institutions that carry out currency exchange now can change the rate of purchasing and selling foreign currencies during the operational (working) day. This will lower the risks for them, which may arise as a result of changes in market during the day, and, as a consequence, reduce the spread between buying and selling rates of foreign currency.

Now it will be allowed to establish different rates of purchase and selling foreign currencies at the bank cash desk, financial institutions and their separate subdivisions, currency exchange offices located at different addresses. Due to this, banks and financial institutions will be able to respond better to regional particularities of the currency market.

In the implementation of cash transactions conversion of one foreign currency to another, the bank is allowed to use its own commercial rate rather than the official rate of the NBU.

In addition, the list of foreign currencies, which banks and financial institutions can convert, is extended. Now they are entitled to carry out the conversion of cash in foreign currency, not only in Group 1 but also in Group 2 of the Classifier of foreign currencies.

Also, the Resolution № 341 simplified document flow in conducting of foreign exchange transactions. As before, an individual wishing to purchase foreign currency should present a personal identification document and residency. But now the cashier should copy the relevant pages of the document and keep copies of the day’s documents only in cases when the amount of foreign currency purchases in excess of UAH 150 thousand. This would reduce costs of banks and financial institutions to conduct foreign exchange transactions and to accelerate them for clients.

The National Bank of Ukraine adopted the Resolution “On Amendments to Certain legal acts of the National Bank of Ukraine” of 07.06.2016, № 339, having liberalized some requirements for foreign exchange transactions for payment of works, services and intellectual property rights of non-residents. The resolution came into force 09.06.2016.

This regulation amended the Resolution of the NBU Board “On the transfer of funds in national and foreign currency in favor of nonresidents on certain transactions” of 30.12.2003, № 597 and approved the Regulation on the procedure of issuing to the residents of the NBU coordination on some transactions, in accordance with the following:

a) exempt from the requirement to receive an act of pricing expertise of the State information and analytical monitoring centre of external commodity markets, certifying compliance with contract prices for works, services, intellectual property rights, which are the subject of the contract, market conditions, or NBU coordination to carry out certain transactions:

• payments of resident-borrowers in favor of the European Bank for Reconstruction and Development (hereinafter − of EBRD), the International Bank for Reconstruction and Development (hereinafter − IBRD) under agreements on the preparation of projects in the state, municipal or private sector, under which these banks consider the possibility of financing, and in the implementation of any other (not only credit) transactions with EBRD and IBRD;
• payments of resident-borrowers under contracts for the execution of works and/or services for the needs of these projects at the expense of IBRD financing, as well as for the needs of relevant projects at the expense of EBRD financing concluded in accordance with the policies and rules of EBRD on procurement;

b) exempt from the need for mandatory translation into Ukrainian and notarization of documents submitted by residents in banks to conduct transactions on payment of works, services, intellectual property rights of non-residents, and the documents that submitted by residents to the NBU for coordination obtaining;

c) reduced list of documents required for NBU coordination obtaining by a resident to carry out certain transactions on payment of works, services, intellectual property rights of non-residents. In particular, there were withdrawn from such a list an original or a copy of cost calculations of provided services, performed works and certified by the non-resident (should not be submitted for coordination obtaining for payment and use of intellectual property rights).

The National Bank of Ukraine adopted the Resolution “On approval of amendments to the Regulations on the procedure for opening, use and closure of accounts in local and foreign currencies” of 14.06.2016, № 346 (hereinafter − Resolution № 346), under which:

• it is given the norms of Regulation on the procedure for opening, use and closure of accounts in local and foreign currencies, approved by the Resolution of NBU Board of 12.11.2003, № 492, according to new requirements of the legislation of Ukraine;
• it is annulled the requirements on the submission to the bank when opening accounts:

a) by legal entities which are registered after January 1, 2016 − copies of constituent documents;

b) parties/local organizations of the party − copies of their certification of the registration;

• it is determined the procedure for opening of a current account by the liquidator in the name of individual − bankrupt;
• it is given the right to the individual while receiving the administrative services to use  their own identification data received by servicing bank in the implementation of its identification and verification.

The Resolution № 346 comes into force 16.06.2016.

Summary of Court Rulings

The Judicial Chamber on Civil Cases of the Supreme Court of Ukraine in its Resolution of 08.06.2016 in the case № 6-330цс16 concluded that taking into account Art. 18 of the Law of Ukraine “On Protection of Consumer Rights” of 12.05.1991, № 1023-XII conditions of the contract to be qualified as unfair, if they:

• violate the principle of good faith;
• lead to substantial imbalance of contractual rights and obligations of the parties;
• cause harm to consumer.

The Other Things

The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On the Judicial System and Status of Judges” of 30.05.2016, № 4734.

This act changed the procedure for appointment of judges to their positions and their dismissal from positions, and also provides for the positions of judges only in perpetuity. Also, this law transferred the right to the Supreme Council of Justice to give consent for arrest of a judge or detention him/her in custody until verdict of guilty by the court. The law introduced a limited immunity of a judge. Thus, the judge will have a legal responsibility for acts committed beyond professional judicial activities on general principles.

It should be emphasized that in general the judicial system has been amended. It includes local courts, courts of appeal and the Supreme Court. In addition, procedures for formation and renewing of judiciary system were improved.

The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Financial Restructuring” (draft bill № 3555).

The mentioned above Law defines the conditions and procedures for the procedure conducting of voluntary financial restructuring of the debtor and the peculiarities of the procedure conducting of pre-judicial restructuring of the debtor with applying measures provided by relevant Law.

Also the Law provides that financial restructuring is carried out in order to:

• promoting recovery of economic activity of debtors, who are in critical financial condition, through the restructuring of their financial obligations and/or their business;
• support of stability of the financial system; 
• providing access of debtors to financing to recover their business.

Financial restructuring procedure is applied to restructuring of economic activity and assets of the debtor, including those located outside the territory of Ukraine, and to monetary obligation of the debtor, including one that arose on the basis of contracts governed by foreign law.