Legislation Overview (December 2016)

Taxes

VAT

The State Fiscal Service of Ukraine by its letter “On the expenses of the company for free meals of its employees under the terms of “buffet” of 23.11.2016, № 25307/6/99-99-13-02-03-15 explained the rules of taxation of free meals for employees, organized under the principle “buffet” by the personal income tax and value added tax (hereinafter − VAT).

If it is impossible to determine the amount of food consumed by each individual, that is, the income received in the form of additional benefits can not be personified, therefore, the cost of such food is not the subject to taxation on income tax.

As for the VAT, the company’s transactions on the free feeding of its employees under the terms of “buffet” are called as the delivery by the tax authorities and explained:

• if the free meals costs are included in the cost of goods/services, transactions for delivery of which are the subject to VAT and related to the receipt of income by the company, these products are considered to be used in economic activities, and conditional VAT should not be accrued at them according to para. 198.5 of the Tax Code of Ukraine (hereinafter – TCU);
• if the costs of the provision of food services are not included in the price of goods/services, these products/services are recognized as such that are available free of charge within the business activity. The VAT is accrued once at them on the basis of the framework, and the compensation VAT should not be accrued.

The State Fiscal Service of Ukraine in its letter “On the reflection in the VAT tax returns of VAT amounts, which were paid by the subject to special tax regime to the suppliers when purchasing goods/services, which were involved in the production of exported agricultural products” of 07.12.16, № 26466/6/99-95-42-01-15 reminded taxpayers of value added tax (hereinafter − VAT) − subject to special tax regime about regulations on reflection of tax credit generated when purchasing goods/services, which were involved in the production of exported agricultural products. Such amounts at the taxpayer solution can be transferred from the special regime Declaration (0121) to general (0110) by reflecting in line 14 of the Declaration 0121 with the sign “-“and in line 14 of the Declaration 0110 with the sign “+“.

The negative VAT, which occurs in subject to special tax regime during exports of agricultural products, can participate in the calculation of VAT refund.

However, the amount of tax credit should be necessary transferred from the special regime Declaration (0121−0123) to the general Declaration (0110) in the period the export transaction. Otherwise, the negative VAT on export can be considered enrolled in the tax credit of the next reporting period, and it will not be the subject to transfer in future periods.

The State Fiscal Service of Ukraine in its letter “On the tax implications of the VAT when the recognition of the amount of losses from decrease in usefulness of assets” of 02.12.16, № 26145/6/99-99-15-03-02-15 informed about the tax implications of VAT when the recognition of the amount of losses from decrease in usefulness of assets. The tax officers explain that the decrease in the balance value of assets does not fall under the definition of transactions for delivery of goods/services, so such a transaction is not subject to VAT.

It should be reminded that when it is about the assets (fixed assets), it is not considered as the supply their liquidation in connection with the destruction or the destruction as a result of force majeure, and in other cases where such liquidation is carried out without the consent of the taxpayer, including in case of theft of fixed assets, or when the taxpayer provides to the controlling authorities the document on the destruction, taking parts or transformation of fixed assets in a different way, as a result, the noncurrent asset can not be used for the original purpose (sub-para. 14.1.191 of TCU).

The State Fiscal Service of Ukraine in its letter “On the determining of tax liabilities on value added tax in the case of export in 2015 of grain and industrial crops in the customs regime of export by producers of grain and industrial crops at a price below the cost of such cultures” of 25.05.16, № 11361/6/99-99-15-03-02-15 explained what VAT consequences would the transaction of export of grain and industrial crops have, if agricultural-manufacturer enterprise exported such products in 2015 at a price lower than cost. It is not necessary to charge additional payments in this case, because before 01.01.16 the export of grain and industrial crops fell under the exemption from VAT.

Also, the tax agents reminded in this letter that on 01.01.16 the grain supply to customs territory of Ukraine should be taxed in a general procedure, and 0% VAT rate influences on  export such products. In addition, from that date the regular prices were defined as the minimum base of their own manufactured products.

Corporate Income Tax

The State Fiscal Service of Ukraine in its letter “On the payment of the advance contribution in the amount of 2/9 of the income tax with the monetary means, if it is taken into account the overpayment of the tax in the integrated card of he taxpayer” of 30.11.16, № 25825/6/99-95-42-01-15 reported that a one-time advance payment of 2/9 of income tax, accrued in the declaration for first three quarters of 2016, should be transferred by the companies to the budget accounts in the budget classification codes provided for accounting of the company income tax.

Therefore, the taxpayer is entitled to include the overpayment of income tax in payment of advance payment up to this amount. Such overpaid liabilities for income tax should be credited in payment of advance payment in the automatic mode (without application of the payer).

The State Fiscal Service of Ukraine by its letter “On the reflection in the tax return of the company income tax, which form was approved by the Ministry of Finance of 20.10.2015, № 897, the amount of advance payments due to the payment of the dividends paid in the current year, including reduction in the amount of accrued income tax in the current reporting (tax) period” of 07.12.16, № 26467/6/99-95-42-01-15 reported: the amount of accrued and paid dividend advance payment on income tax n the first quarter of 2016, which is not counted in the reduction of income tax for the reporting period, could be considered as decrease in tax liability from the tax declared in subsequent reporting periods of 2016.

Thus, the tax authorities confirmed the right of those who have profits on the annual enrollment of dividend advances and also transfer of amounts of uncounted dividend advances in the reduction of income tax accrued in subsequent reporting periods within the year.

The State Fiscal Service of Ukraine by its letter “On adjusting the financial result before tax on the provision formed for payments related to salaries” of 30.11.16, № 25818/6/99-99-15-02-02-15 reported that payments related to salaries, included the costs of the company under the programs of pension provision (including short-terms payments to the employees, post-employment benefits, other long-term benefits of employees, payments in case of dismissal, etc.).

If the provision (reserve) is created for the compensation for future expenses under other payments related to salaries (including under mentioned above), the costs for the formation of such a provision does not increase the financial results for the purposes of taxation on the income tax.

PIT

The State Fiscal Service of Ukraine by its letter “On the expenses of the company for free meals of its employees under the terms of “buffet” of 23.11.2016, № 25307/6/99-99-13-02-03-15 explained the rules of taxation of free meals for employees, organized under the principle “buffet” by the personal income tax and value added tax (hereinafter − VAT).

If it is impossible to determine the amount of food consumed by each individual, that is, the income received in the form of additional benefits can not be personified, therefore, the cost of such food is not the subject to taxation on income tax.

As for the VAT, the company’s transactions on the free feeding of its employees under the terms of “buffet” are called as the delivery by the tax authorities and explained:

• if the free meals costs are included in the cost of goods/services, transactions for delivery of which are the subject to VAT and related to the receipt of income by the company, these products are considered to be used in economic activities, and conditional VAT should not be accrued at them according to para. 198.5 of the Tax Code of Ukraine (hereinafter – TCU);
• if the costs of the provision of food services are not included in the price of goods/services, these products/services are recognized as such that are available free of charge within the business activity. The VAT is accrued once at them on the basis of the framework, and the compensation VAT should not be accrued.

The State Fiscal Service of Ukraine by its letter “On the taxation of income from the provision of real estate for rent” of 22.11.16, № 12467/Т/99-99-13-02-03-14 reminded: if the income was accrued, but was not paid, so the income tax should be transferred to the budget within the deadlines established for the month the tax period (paras.168.1.5 of TCU). The income tax should be paid from accrued and unpaid rent payment within 30 calendar days after the end of the month of accrual.

In the case of agricultural land lease, land share, the subject to taxation is determined from the amount of rent specified in the contract, but it could not be less than the minimum amount of lease payment, established by the legislation.

The State Fiscal Service of Ukraine in its letter “On the exchange of property by the individual” of 06.12.16, № 26376/6/99-99-13-02-03-15 noted that when changing the land plot, an individual should not pay income tax only in case of simultaneous adherence of two conditions (para. 172.1 of the tax Code of Ukraine, hereinafter − TCU):

• the following exchange took place no more than once during the year;
• land plot was owned by an individual over three years (other than property received by inheritance).

5% of the income tax and 1.5% of the war tax should be paid only that party (or both) for which the above conditions are not met. Such amounts are determined considering the value recorded in the contract exchange, but not less than the estimated value.

It should be recalled that if the exchange takes place between two individuals, the tax should be paid to the notarization of the contract of exchange of land plot (para. 172.5 of TCU).

The State Fiscal Service of Ukraine by its letter “On taxation of gifts provided to employees with the personal income tax” of 14.12.16, № 21695/5/99-99-13-02-03-16 reminded about the following: non-taxable value of the gift is half of the minimum wage established on January 1 of the reporting year (UAH 689 in 2016), except for cash payments (sub-para. 165.1.39 of TCU). If its cost is greater than this limit, the employee has the form of additional benefits in the amount of such excess (sub-para. “e” of para.164.2.17 of TCU). The natural rate of 1.219512 should be used for calculation of tax base. 1.5% of the war tax should be calculated from the size of the excess over the non-taxable value excluding natural coefficient and withhold the cost of other monetary income of the employee.

The tax-free part of gift should be reflected in form № 1DF with the sign of income “160”, and the taxed one – “126”.

Unified Social Contribution

The State Fiscal Service of Ukraine in its letter “On accrual of the unified contribution for obligatory state social insurance on the amount paid to a foreign citizen who does not live in Ukraine, fees for consulting services under the civil law contract” of 01.12.16,  № 26021/6/99-99-13-02-03-15 concluded: if the company pays a fee under a civil law contract (on consultancy services) to foreign citizen who does not live in Ukraine, the amount of compensation is not the basis for accrual of the unified contribution. It is explained by the fact that the foreigner is not an insured person according to the current legislation of Ukraine, and the mentioned company is not his/her employer-insured.

Other Taxes and Fees

The State Fiscal Service of Ukraine in its letter “On the procedure for declaration of the excise tax due to the entry into force by the order of the Ministry of Finance of Ukraine dated 26.09.2016 № 841” of 09.12.16, № 39423/7/99-99-15-03-03-17 explained the main innovations regarding the form and filling in procedure of declaration of the excise tax. In particular, the following Annexes were added to the excise declaration:

• “Calculation of the amount of the excise tax for the sale of fuel under subparagraph 213.1.12 of paragraph 213.1 of Article 213 of the Code” (Annex 11);
• “Application on the violation by a person that sells the fuel, procedure of filling in and/or the registration procedure of excise invoice/adjustments calculation” (Annex 9, due to which Annex 9 of the previous version became Annex 10 of a new form).

Annex 11 is necessary to be filled in by all taxpayers (legal entities and individuals) of the excise tax for the sale of fuel (including producers), regardless of whether it was the object of taxation in the reporting period.

The amount of tax liability determined in Annex 11 (gr. 20) should be transferred to line B2, which supplemented chapter B “Tax liabilities for the sale of fuel” of the Declaration.

Annex 9 should be filled in by the person that receives the fuel and submits it along with the Declaration and copies of documents required by paragraph 231.10 of the Tax Code of Ukraine (hereinafter − TCU), to the controlling authority at the place of registration of the taxpayer within the deadline established for the submission of the tax declaration.

It is required to provide a report in a new form for the first time for December 2016 not later than on January 20, 2017.

Accounting and Reporting

The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to Certain Laws of Ukraine regarding the elimination of administrative barriers to the export of services” of 03.11.16, № 1724-VIII having made amendments to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” of 19.07.99, № 996-XIV on the requirements to the primary documents.

Thus, the law does not already mention that the primary documents confirm and record the performance of the economic transaction. The norm that they should contain information about it remained unchanged.

In addition, there were removed the requirement that the original documents should be in the implementation of economic operation or immediately after its completion.

According to the amendments, it is not necessary to indicate the place of their preparation.

The State Fiscal Service of Ukraine by its order “On approval of the State register of payment transaction registers” of 14.12.16, № 1019 approved a new state register of payment transactions registers (hereinafter − the State Register of PTR).

It is possible to view the new State Register of PTR on the official website of SFSU.

It should be recalled that at the time of payment transactions in trade, catering and services it can be used only the models of PTR, which are included in the State Register.

The State Fiscal Service of Ukraine (hereinafter − SFSU) in its letter “On the procedure for declaring the incomes of individuals” of 12.12.16, № 39537/7/99-99-13-01-03 reminded that income declaration campaign begins on January 1, 2017. It is for those who are obliged to submit the declaration in accordance with the law, and those who have a right to receive capital allowances. Tax authorities note that the updated declaration form should be applied.

The SFSU also pays attention: receiving the incomes from two or more tax agents in excess of 120 minimal wages does not require submission of the declaration (in fact in 2016 a progressive scale was dormant, and the general rate was 18% of tax).

The State Fiscal Service of Ukraine in its letter “On the representation of specifying a calculations” of 12.12.16, № 39533/7/99-99-12-03-05-17 reported that legal entities submit a declaration for the tax on real estate in the period until 20 February. If, after the deadline for the declaration submission, the payer detected an error, then he has the right to correct it by submission of a declaration of the type “Specifying”. In order to correct the liabilities on tax on real estate, the taxpayer should submit two clarifying declarations separately for residential and non-residential real estate.

A taxpayer, who independently reveals the fact of understatement of tax liability of past tax periods, in accordance with sub-paragraph “a” of para.50.1 of the Tax Code of Ukraine (hereinafter – TCU), is obliged to pay the amount of underpayment and a fine.

The Ministry of Finance of Ukraine by its order “On Amendments in the tax declaration form for the rental payment” of 07.11.16, № 927 approved an updated form of Tax declaration for the rental payment.

The order of the Ministry of Finance, which approved a new form of the declaration, should enter into force from the date of official publication and scheduled for publication in the “Official Journal of Ukraine” for 30.12.16. If the entry of the document will be on 30.12.16, it should be given the report for the first time for January 2017.

Labor and Salaries

The Ministry of Social Policy of Ukraine in its letter “On the sending of employees on professional development” of 29.06.16, № 813/13/84-16 reminds basic rules of registration of training of employees.

Thus, the basis for the employee sending to training courses is the order of the head. The period such education should be reflected in the attendance records of working time with a mark “Ин” − other time not worked as provided by the law.

The information about the passage of professional development should be make in the employment book when dismissal of the employee for the last two years before dismissal (para. 4.1 of Regulations on procedure for introduction of employment books of workers, approved by order of the Ministry of Labor of Ukraine, the Ministry of Justice of Ukraine, the Ministry of Social Protection of the population of Ukraine of 29.07.93, № 58).

During the education period, the average earnings are to be accrued to the employee. In addition, the travel and per diem allowance on the way should be compensated (Art. 122 of the Labor Code of Ukraine, para.1 of the Resolution of Cabinet of Ministers “On guarantees and compensations for employees sent to professional development, training, retraining, training other professions work-based” of 28.06.97, № 695).

The employer should not provide other days of rest for training days at the weekend.

The Ministry of Social Policy of Ukraine in its letter “On the payment of the days of business trip for employees who are not civil servants” of 11.11.16, № 1564/13/84-16 reminds that the days of business trip should be paid at the one of the values that is greater:

• or at the average wages (calculated for two months preceding the month of business trip direction);
• or at the size of the usual daily wage.

If the business trip is accounted for two different months, the amount of daily payment (compared with average daily wage) should be determined separately for each of the months. As a result, it is possible that a part of the same business trip will be paid at the average wages, while another part (that is accounted for another month) – at the usual daily wages.

The Social Insurance Fund for Temporary Disability (hereinafter – SIF for TD) by its letter “Who has the right for free trips to rehabilitation department of sanatorium and resort facilities” of 15.12.16, № 2.4-46-2241 reminded that today it is allowed to receive social insurance ticket only for treatment in rehabilitation department of sanatorium and resort facilities after the disease or injury directly from the hospital. Medical rehabilitation as a health resort stage of treatment should be prescribed to patients after acute period of disease in the presence of disability and carried out at medical reasons. So, sanatorium rehabilitation should be exercised immediately after hospital treatment and the patient should be sent to a sanatorium with the open work incapacity certificate.

The period of treatment in the rehabilitation department of sanatorium and resort facility at the social insurance ticket is 24 days. It is prohibited to divide the ticket. Only one ticket for rehabilitation can be provided to the insured person at the expense of SIF for TD during the calendar year.

Control and Responsibility

The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to the Procedure of competition for lease rights of the state property” of 07.12.16, № 923 amended the Procedure for providing of competition for lease rights of the state property, approved by the Cabinet of Ministers of Ukraine dated 31.08.11, № 906. Now, the announcement about the start of the competition for lease rights of the immovable property will be published at least 10 days (previously 20 days) before the start of the competition. After its completion, a draft of lease contract is to be sent to the winner within three working days (previously − 15 calendar days).

It is possible to learn more about the lease of integral property complexes of companies, organizations and their structural divisions from the publication 40 days prior to the competition. This increase in term (previously 20 days) will give enough time for receiving a decision on concentration from the authorities of the Antimonopoly Committee of Ukraine.

According to government officials, as a result, the transfer time of state property on the basis of competition should be reduced by 20 days.

The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On the State Budget of Ukraine for 2017” (bill № 5000). In addition, at evening session of parliament there was approved a tax reform, which should be expected in 2017. In particular, there were adopted:

• The Law of Ukraine “On Amendments to the Tax Code of Ukraine and certain laws of Ukraine to ensure the balance of budget revenues in 2017” (bill № 5132);
• The Law of Ukraine “On Amendments to the Tax Code of Ukraine on improving the investment climate in Ukraine” (bill № 5368);
• The Law of Ukraine “On Amendments to the Budget Code of Ukraine concerning improvement of budget forming and budget execution” (bill № 5131);
• The Law of Ukraine “On Amendments to the Budget Code of Ukraine concerning transfer of rent for subsoil use for oil extraction, natural gas and gas condensate” (bill № 3038);
• The Law of Ukraine “On the High Council of Justice” (bill № 5180) etc.

The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to the Tax Code of Ukraine on improving the investment climate in Ukraine” (bill № 5368 of 07.11.2016).

This piece of legislation introduced comprehensive changes to sections of the Tax Code of Ukraine concerning the administration of taxes and fees, as well as company income tax, tax on personal income tax (hereinafter − PIT), value added tax (hereinafter − VAT), excise tax, rent and property tax, special tax regimes; liquidation of the tax police etc.

The law comes into force on 01.01.17. The legal act provides for before July 1, 2017:

• to ensure the development, creation and implementation of electronic office software;
• to develop and submit the draft law on the introduction of a single account for payment of taxes and fees to the Verkhovna Rada of Ukraine;
• to develop and submit the draft law on the introduction of the tax on deduced capital to the Verkhovna Rada of Ukraine.

The Cabinet of Ministers of Ukraine by its Resolution “On approval of the Procedure for the control in the sphere of state registration” of 21.12.16, № 990 identified the mechanism of monitoring of subjects of the state registration. The Ministry of Justice of Ukraine will use two mechanisms for the control of the activity of subjects to the state registration and the state registrars:

• consideration of complaints against decisions, actions or inaction in the field of state registration;
• constant monitoring of registration actions in the Unified State Register of legal entities, individuals-entrepreneurs and public organizations and in the State Register of real rights on immovable property.

The Government identified bases and criteria for such monitoring. Revealed violations will become the basis for the desk audit of the state registrars and/or state registration subjects by the Ministry of Justice.

Also, in the case of detection of failure to provide by a legal entity to the state registrar of information on the ultimate beneficial owner (controller) of the legal entity, the executive officer of the Ministry of Justice should make up a protocol on administrative offense under Art. 16611 of the Code on Administrative Offences (hereinafter – CAO) against the head of the legal entity or person authorized to act on behalf of the legal entity (executive body).

The State Fiscal Service of Ukraine in its letter “On the maximum amount of cash settlements” of 19.12.16, № 13583/М/99-99-13-04-02-14 explained that entrepreneurs should not be brought to the financial responsibility for violation of cash discipline for the failure to comply with the requirements on restriction of cash payments businesses (entrepreneurs) between them in the amount of over 10 UAH thousand. The entrepreneur will not go unpunished – he/she should be brought to administrative responsibility for violation of the procedure of cash payments for goods (services), including the excess of the maximum amount of cash settlements (Article 1651 of the Administrative Code).

Thus, the administrative fine in the amount of from UAH 1.7 to 3.4 thousand will be imposed on the individual-entrepreneur and officials of the legal entity (director and chief accountant). Actions committed by a person, who in the course of the year was subjected to administrative penalties for the same violation, entail the fine imposing from UAH 8.5 to 17 thousand.

The State Fiscal Service of Ukraine by its letter “Is the controlling authority entitled to conduct unscheduled inspections of the documentary on the issues that have been covered during the documentary planned field audits” of 23.12.16, № 27825/6/99-99-14-03-03-15 reminded when it was prohibited to the controlling authorities to conduct documentary unscheduled inspections, if the issues that to be the subject to such audit were covered during the previous audits of the payer.

These cases include situations when the bases for the inspections are:

• obtaining of tax information indicating the violation of the payer of the currency and other legislation, the control of compliance of which is entrusted to the regulatory authorities, if the payer has not provided an explanation and documentary confirmation on mandatory written request of the controlling authority within 10 working days of receipt of request (sub-para. 78.1 .1 of TCU);
• detected data inaccuracy contained in the tax declarations submitted by the taxpayer, if the taxpayer fails to provide an explanation and documentary confirmation on the written request of controlling authority, which indicates the detected data inaccuracy and appropriate declaration, within 10 working days from receipt of the request (paragraphs. 78.1.4 of TCU);
• if the taxpayer submitted the declaration, which  stated to compensation from the budget of the value-added tax (hereinafter − VAT), if there are grounds for inspection and/or with a negative value for VAT over 100 thousand UAH (paragraphs 78.1. 8  of TCU).
• in case of receipt of the decision of the court (the investigating judge) on the appointment of verification or authority regulations engaged in the investigative activities, issued by them in accordance with the law (paras.78.1.11 of TCU).

The Ministry of Finance of Ukraine and the Ministry of Justice of Ukraine by its joint order “On approval of the provision of information of the State Fiscal Service of Ukraine on the requests of state executive service and private executors” of 13.12.16, № 3639/5/1085 defined the mechanism for obtaining the following information by the state executive service and private performers about:

• registration numbers of accounting cards of taxpayers − debtors – individuals or series (if any) and passport number, individuals debtors who by their religious beliefs refuse to accept the registration number of the taxpayer registration card and officially reported it to the appropriate controlling authority, and also have a stamp in their passport;
• existing accounts of debtors-legal entities and/or individual entrepreneurs, as well as accounts opened by the debtor-legal entity, through its subsidiaries, representative offices and other subdivisions;
• sources of income of individuals-debtors.

Such information should be provided by the tax authorities. For this purpose the both private and public performers should submit a request through an automated system of enforcement proceedings.

According to sec.5 of Art.18 of the Law of Ukraine “On Enforcement Proceedings” of 02.06.16, № 1404-VIII, the performer in the performance of the decisions has the right to immediate access to information about debtors and their property, revenues and resources, including confidential contained in state databases and registries, including electronic.

Budgetary Relations

The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to the Budget Code of Ukraine” of 20.12.16, № 1789-VIII and provided the state support to agricultural producers. In particular, they will annually receive funds from the state budget in the amount of not less than 1% production output in agriculture. At the same time, they should send 20% of such support to purchase at the producers of agricultural machinery and equipment (in 2017 − 10% and in 2018 − 15%).

The Verkhovna Rada of Ukraine regulated relations between the state and local budgets by this law. Also, there were clarified directions of use of educational and medical subventions that to be provided from the state budget to local budgets, and the list of expenses provided for transmission to the financial support from the local budgets.

Mobilization and ATO

The Cabinet of Ministers of Ukraine (hereinafter − CMU) by its Resolution “On Amendments to the procedures approved by the Cabinet of Ministers of Ukraine dated March 20, 2013 № 198 and on April 15, 2013 № 347” of 30.11.16, № 879 determined that employers, who gave employment to jobless participant of the antiterrorist operation (hereinafter − ATO) not less than for two years, would receive compensation of the unified contribution for one year.

In addition, representatives of the government determined that the ATO participants in order to obtain the unemployed status should submit the following additional documents to the employment centre:

• a veteran identification card;
• a copy of the certificate of the direct participation of a person in ATO, providing its implementation and protection of the independence, sovereignty and territorial integrity of Ukraine.

The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to paragraph 5 of the resolution of the Cabinet of Ministers of Ukraine dated November 7, 2007 № 1294” of November 30, 2016 № 883 established additional payment of servicemen of the Special Operation Forces of the Armed Forces of Ukraine (hereinafter − AFU) in the amount up to 100% of the subsistence minimum for able-bodied persons. It will be included in the monthly additional kinds of cash security of military personnel. The corresponding norm complemented para.5 of the Resolution of the Cabinet of Ministers “On regulation of the structure and conditions of cash security for military personnel, persons of ordinary and commanding structures and some other persons” of 07.11.07, № 1294.

The introduction of additional payment is due to the increased risk for life and the characteristics of the performance of combat (special) tasks typical of this subdivision of AFU.

The Ministry of Social Policy of Ukraine in its letter “On additional leave for civil service length for the period of military service” of 16.11.16, № 691/13/116-16 mentioned: the mobilization period should be included in the civil service length three-fold amount (one month for three). However, the employee has no the right to additional leave for the years of service. For example, in July 2015 the civil service length of employee during the stay on military service reached 19 years, but the days of additional leave will not be charged. Only after the mobilization in 2016 and when the employee starts his/her work, he/she can take additional leave for the length of service of 20 years.

Summary of Court Rulings

The Supreme Economic Court of Ukraine passed the Resolution “On the error in the payment order to the payment of the court fee” of 09.11.16, in the case № 910/10286/16, mentioned: if the EDRPOU (the Unified State Register of Businesses and Organizations of Ukraine) code of the defendant or the claimant name in the case was indicated incorrectly in the payment order for the payment of the court fee in the purpose of payment − the court should not immediately return such appeal.

The absence of information in the payment about what kind of a statement exactly (claim, action) to be paid by the court fee is not the basis for returning the statement of claim (complaint), because the court independently verifies the payment an appropriate amount of court fee by the plaintiff (the applicant, the appellant).

If the court has any doubts regarding the receipt and transfer of the amounts of court fee to the State Budget of Ukraine, it can and should demand from the person who filed the appeal, a confirmation of the territorial body of the State Treasury of Ukraine.

Financial Markets

The Cabinet of Ministers of Ukraine by its Resolution “On Approval of Licensing Conditions for the conduction of business activity on providing of financial services (excluding professional activities in the securities market)” of 07.12.16, № 913 approved Licensing Conditions for the conduction of business activity on providing of financial services (excluding professional activities in the securities market).

This document established the procedure for obtaining a license and also requirements for conduction of business activity of financial institutions such as guarantees and warranties of trust management of financial assets, leasing, factoring, insurance, attraction of financial assets with an obligation to return, money provision to loan, administration of private pension funds, purchase of goods in groups, property management to finance the construction and/or transactions with real estate etc.

Licensees that have licenses of NKRRFP (the Financial Services Authority) for conduction of mentioned economic activity should bring it in compliance with the License Conditions within two months from the date of publication of the resolution of the Government.

The National Bank of Ukraine by its Resolution “On the regulation of situation in the monetary and foreign exchange markets of Ukraine” of 13.12.16, № 410 extended existing temporary restrictions in the monetary and foreign exchange markets due to the presence of risks for price and financial stability. Majority of restrictions became permanent.

In particular, such restrictions continue to have effect as mandatory sale of foreign exchange earnings in favor of legal persons at level of 65%; 120-day term of settlements for transactions for export and import of goods; one-day period of reservation the national currency to purchase foreign currency in the interbank market; a ban on advanced repayment of loans from non-residents; purchase of currency by individuals amounting to 2 thousand hryvnia per day; limit on cash withdrawals from foreign currency accounts amounting to 250 thousand hryvnia per day etc.

Now, currency restrictions are permanent. An exception is the mandatory sale of foreign exchange earnings and a 120-day term for settlements of transactions for exports and imports of goods − their effect is limited to June 15, 2017 inclusive.

The Other Things

The Cabinet of Ministers of Ukraine by its Resolution “On Approval of the Procedure of introduction of digital signature on contactless electronic media, which is in the passport of citizen of Ukraine, and the provision of services of electronic digital signature using the passport of citizen of Ukraine with the implanted contactless electronic media” of 30.11.16, № 869 established the procedure for introducing of means of electronic digital signature (hereinafter − EDS) on contactless electronic media, which to be contained in the passport of citizen of Ukraine. It is also approved the procedure for the provision of services of EDS using of the passport of citizen of Ukraine with the implanted contactless electronic media. These services will be provideв by the accredited center certification of keys of the Ministry of Internal Affairs of Ukraine.

Thus, this resolution actually established a regulatory basis for the possibility of using electronic signature services with ID-passport, as well as established the procedure and technical details of the process.

The Ministry of Justice of Ukraine in its letter “On the certain issues relating to the application of the Law of Ukraine “On the condemnation of the Communist and National Socialist (Nazi) totalitarian regimes in Ukraine and the prohibition of their symbolism propaganda” of 08.11.16, № 38779/31702-0-33-16/8 explains: in the event of a change of identification of the subject data, it is necessary to amend the records of the State Register of real rights on real estate at the request of the owner or other legal owner.

Identification data for legal entities (resident and non-resident) is its name and tax number. So, if a legal entity name changed due to decommunization – the appropriate changes should be reflected in the State Register of real rights on immovable property.

The Cabinet of Ministers of Ukraine by its Resolution “On approval of provisions on the supervisory board at state scientific institution” of 14.12.16, № 953 approved the typical position on the supervisory board at state scientific institution.

The Supervisory Board at the state scientific institution should be formed by the decision of the owner or founder. It may include foreign scientists. The main purpose of the supervisory board is independent assessment of scientific results (i.e. scientific, technical, scientific and educational, scientific and organizational) of activities of state scientific institutions.

The Auditors' Chamber of Ukraine by its decision “On establishment of fees for certification and inclusion in the Register of audit firms and auditors” of 01.12.16, № 334/16 increased the fee for certification and inclusion in the Register of audit firms and auditors.

Thus, it is established the fees for certification of individuals for the right to carry out audit activities:

• for each stage of the qualifying examination in order to obtain the certificate of the auditor – at the rate of UAH 4 800.00 (including VAT of UAH 800.00). Previously the payment was UAH 3 600, including VAT;
• for the annual control test on the basis of improvement of professional skills of auditors − in the amount of UAH 720.00 (including VAT UAH 120.00);
• for the extension of the duration of the certificate – in amount UAH 4 800.00 (including VAT UAH 800).

The payment for inclusion in the Register of audit firms and auditors is established:

• for the inclusion in the Register of audit firms and auditors – in the amount of UAH 12 000.00 (including VAT UAH 2 000.00);
• for the extension of the certificate of registration in the Register of audit firms and auditors − in the amount of UAH 7 200.00 (including VAT UAH 1 200.00).

The Cabinet of Ministers of Ukraine by its Resolution “Certain issues of social protection of disabled children and persons with disabilities” of 14.12.16, № 978 stated the Standard Regulations on the orphanage-residential care facility in a new version. The updated document, among other things, provides for the establishment various innovative departments (groups) at the orphanages: day care, a five-day hospital care, transit accommodation, supported living, palliative care. Children can stay in the institution, not only around the clock, but during the day, they have the right to temporarily drop out from the institution for six months (but not for two as before).

New Standard Regulations defines the indications and contraindications for placement of children in the orphanage, provides the social services by concluding a contract.