Taxes
VAT
The State Fiscal Service of Ukraine in its individual tax advice “On the Procedure for VAT Taxation in the Supply of Services on Granting Access to Computational Resources” of 30.11.2017, No. 2775/6/99-99-15-03-02-15/ІПК considered the issue of imposition of the value-added tax (hereinafter − VAT) on transactions providing access to computing resources. The question concerns both hosting, cloud services and even physical access to servers.
Representatives of the fiscal department see in such services something between services in the field of informatization and telecommunication services. At the very least, they insist that the place of their supply is determined by sub-para. “д” of para. 186.3 of TCU, that is, it coincides with the place of registration of the recipient. So, when access to such resources is provided by a non-resident, the recipient-resident is obliged to impose VAT on such services.
A significant part of the consultation is devoted to the peculiarities of taxation of transactions for the supply of computer programs. In particular, the controllers reminded that such transactions are exempted from VAT (para. 261 of sub-para. 2 of sec. XX of the Tax Code of Ukraine (hereinafter – TCU). At the same time, the exemption regime can be applied only in case of the transfer of exclusive proprietary intellectual property rights to such product.
Unfortunately, the rules on access to computing resources are unclear. In addition, the controllers refused to explain what should be understood and how to tax the so-called “online service”. It’s supposedly not their competence.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On Tax Accounting of an Advertising Campaign” of 08.12.17, No. 2908/6/99-99-15-02-02-15/ІПК reported on the procedure for calculating value added tax (hereinafter − VAT) in the case of an advertising campaign such as “unit of goods as a gift”.
Taxpayers interpret the sale of six packages of water at a price of five as two separate transactions:
- supply of five packages of water on a payment basis;
- free of charge supply of one package of water.
Consequently, representatives of the fiscal department recommend to pay VAT from the promotional gift based on the purchase price (for the purchased product) or the usual price (for own products) under para.188.1 of TCU. Of course, in addition, the supplier will be forced to impose VAT and sale of five units of water
impose VAT and sale of five packages of water.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the calculation of “compensating” VAT obligations, if during the purchase of goods/services the VAT amounts were not included in the tax credit” of 13.09.17, No. 20444/6/99-99-15-03-02-15 explained to taxpayers that compensation for tax obligations on purchases, used in preferential or non-economic activity transactions, should always be charged. The fact that incoming VAT on goods/services purchased has not been included in a tax credit does not affect the appearance of contingent liabilities.
Exception − purchases made before 01.07.15, when there were other rules for a tax credit reflection.
It should be recalled that that para. 198.5 of TCU require accruing a conditional VAT on goods/services:
· purchased for use in non-taxable transactions − on the date of their purchase;
· purchased for use in taxable transactions that begin to be used in non-taxable transactions − on the date of commencement of their actual use, as defined in the primary documents drawn up in accordance with the Law of Ukraine “On Accounting and Financial Reporting in Ukraine”.
If a taxpayer has a tax invoice problem for confirming a tax credit (for example, it is blocked or it is with errors), then the conditional VAT must be accrued after receipt of a properly documented/registered document. That is, in the reporting period in which the buyer had grounds to include VAT amounts in the tax credit. Such recommendations are given by controllers in the category 101.06 ZIR.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Procedure for Taxation of VAT Transactions of Supply of Non-Residents to Residents of Advertising Services” of 08.12.17, No. 2898/К/99-99-15-03-02-14/ІПК reminded that the recipient of non-resident services are not always obliged to pay VAT. In particular, when it is about receiving advertising services, everything depends on the place of delivery. Therefore, if a resident receives advertising services abroad, there is no the subject to VAT. And if a non-resident has provided advertising services in the territory of our country, the recipient must accrue and pay VAT to the budget.
Such tax liabilities are reflected by VAT payers in line 6 of the declaration. And if the duty to pay VAT fell on the shoulder of a non-payer of VAT, he/she needs to submit Calculation of tax
obligations accrued by the recipient of services not registered as a VAT payer, supplied by non-residents, including their permanent representations, not registered tax payers, at customs territory of Ukraine. Since such a document belongs to the tax reporting, it is necessary to submit it within 20 calendar days following the month of receipt of non-resident services.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On Registration of Tax Invoice and Adjustment Calculations” of 05.12.17, No. 2817/6/99-99-15-03-02-15/ІПК clarified some issues regarding the registration of tax invoices and adjustments calculations. The main conclusion, which is based on this consultation, − the TCU norms do not provide for a mechanism for the removal of tax invoices filed for registration from URTI. The mechanism applies to tax invoices sent to URTI, but were not registered, for example, in connection with the suspension of their registration.
At the same time, the representatives of the fiscal department reminded: if the reduction of tax liabilities is envisaged, the obligation to register in the URTI the adjustment calculation to the tax invoices drawn up for the buyer − the taxpayer of value added tax (hereinafter − VAT), is charged on the latter (para. 192.1 of the tax Code of Ukraine, hereinafter − TCU). It is obvious that the buyer is not able to fulfil this obligation in the event that the tax invoice, to which the adjustment calculation to be made, is blocked. It will be refused to register it, as the system does not contain information on the tax invoice to which it to be drawn up.
It is this situation that relates to the second important conclusion, which is based on the consultation: in the opinion of the controllers, the adjustment calculation can be made only to the tax invoice registered in the URTI. Indeed, the only way out not to expose the buyer to fines for late registration of the adjustment calculations (para. 1201 of TCU) is to leave the case until the release of the tax invoice. But, unfortunately, the VAT payer is not always able to postpone an event that makes adjustments in accordance with the requirements of the TCU.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Formation of Tax Credit by Cash Method” of 15.12.17, No. 3007/6/99-99-15-03-02-15/ІПК explained to taxpayers applying the cash method of VA-accounting how to reflect a tax credit, taking into account recent innovations. Namely − after extending “suitability” of a tax invoice from 365 to 1095 days.
The taxpayers replied: the payer, working on the VAT cash method, is entitled to reflect a tax credit for a registered tax invoice/adjustment calculation in the reporting period in which the funds paid for the purchased goods/ services were received or in any subsequent reporting period within 1095 days from the date of the tax invoice/ adjustment calculation.
If registration of the document in URTI was delayed, then it should be included in the current declaration not earlier than during the registration period. Of course, if there is a payment.
We can conclude from the words of the controllers: the limitation period of 1095 days is valid not only for fresh tax invoices, drawn up after 03.12.17, but also for documents drawn up before the introduction of changes.
Corporate Income Tax
The State Fiscal Service of Ukraine in its Individual Tax Advice “On Taxation of Non-Residents’ Income from the Provision of Advertising Services” of 04.12.17, No. 2805/6/99-99-15-02-02-15/ІПК noted: if a non-resident renders services of online advertising in Ukraine to a Ukrainian firm, then he/she must create a permanent representation in our country.
Consequently, the payment for the services provided will be received directly by the permanent representation of the non-resident. Since he/she is taxed as a regular taxpayer for tax purposes, the resident is required to tax the payment for such services in accordance with paragraph 141.4 of the TCU. In addition, the Ukrainian company is exempt from paying tax at a rate of 20% of the amount of such payments at its own expense (para. 141.6 of TCU).
A permanent non-resident representation taxes its profit according to the general rules.
PIT and War Tax
The State Fiscal Service of Ukraine in its Individual Tax Advice “On compensation of any expenses of an individual - a taxpayer (a volunteer) who incurred them during volunteer activity” of 07.12.17, No. 2863/6/99-99-13-02-03-15/ІПК reported that a monetary compensation made by the company for any expenses incurred by a volunteer individual during the conduct of volunteering activities, should be taxed be the personal income tax and the war tax on general grounds. Such an explanation argued by para. “г” of para. 164.2.17 of TCU, according to which the property or monetary compensation of any costs or losses of the taxpayer should be taxed.
It is worth mentioning the special norm from para. “б” of para. 165.1.54 of TCU, which provides for the possibility of exemption from taxation of charitable assistance paid to volunteers for the reimbursement of documented expenses incurred by them in connection with the provision of assistance, in particular, to combatants and internal refugees.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On Taxation of the Personal Income Tax and the War Tax in the Form of Additional Benefit” of 11.12.17, No. 2919/6/99-99-13-02-03-15/ІПК emphasized: if the legal person reimburses the travel, food and accommodation expenses incurred by the individuals (participants of the forum) who are not in labor relations with such a legal person and are not members of its governing bodies, then the amount of reimbursed expenses should be included in the total taxable income of these individuals as an additional benefit and to be taxed by the personal income tax and the war tax.
It should be recalled that the Instruction on business trips within Ukraine and abroad, approved by the order of the Ministry of Finance of Ukraine of March 13, 1998, No. 59, applies only to state bodies and enterprises financed from the budget. Definition of the term “business trip” is contained only in this document. Accordingly, economic accounting companies independently define this concept for themselves.
At the same time, the fiscal service does not give them much freedom in this and even does not mention business trips, answering the question of how to tax reimbursement of travel, food and accommodation costs for individuals who are not employees of a company. Therefore, before the business trips, the representatives of the fiscal department can only refer to the official trips of employees and members of the governing bodies of the company. For other individuals, the amount of reimbursement of such costs will be recognized as an additional benefit with appropriate taxation.
Excise Tax
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the emergence of tax obligations on excise tax on transactions for writing off the amount of fuel lost during transportation” of 15.12.17, No. 3022/6/99-99-15-03-03-15/ІПК responded to questions about the emergence of tax liability for excise duties on transactions for cancelling the amount of fuel lost during transportation.
The main argument of the controllers: the total amount of fuel sold and written off by the business entity does not exceed the amount of the received fuel from other tax payers for which the excise tax has been paid. Consequently, such a taxpayer of excise tax has no taxable object in the reporting period, defined by para. 213.1.12 of TCU.
At the same time, despite the absence of an obligation to pay a fuel excise tax, the taxpayer must be accounted for excise taxes on all types of received and sold (spent) fuel. At the same time, information on the total amount of fuel lost both within and beyond the established rates of losses is indicated in columns 9 and 10 of Annex 11 to the declaration.
Accounting and Reporting
The Ministry of Finance of Ukraine by its Order “On approval of standard forms of memorial orders, accounting registries of other public sector entities and their preparation procedure” of 08.09.17, No. 755 approved new standard forms of memorial orders and other accounting registers and established the procedure for their compilation. The new forms will consist of:
· Memorial Order No. 1 “Accumulative Statement for Cash Transactions”;
· Memorial Order No. 1- авт “Accumulative Statement for Cash Transactions”;
· Memorial Order No. 2 “Accumulative Statement of Cash Flows of the General Fund in Accounts Opened by the Bodies of the State Treasury Service of Ukraine (banks)”;
· Memorial Order No. 2- авт “Accumulative Statement of Cash Flows of the General Fund in Accounts Opened by the Bodies of the State Treasury Service of Ukraine (banks)”;
· Memorial Order No. 3 “Accumulative Statement of Cash Flow of a Special Fund in Accounts Opened by the Bodies of the State Treasury Service of Ukraine (banks)”;
· Memorial Order No. 3- авт “Accumulative Statement of Cash Flow of a Special Fund in Accounts Opened by the Bodies of the State Treasury Service of Ukraine (banks)”;
· Memorial Order No. 4 “Accumulative Statement on Settlements with Debtors”;
· Memorial Order No. 4- авт “Accumulative Statement on Settlements with Debtors”;
· Memorial Order No. 5 “Summary of Payroll Information and Scholarship”;
· Memorial Order No. 5-авт “Summary of Payroll Information and Scholarship”;
· Memorial Order No. 6 “Accumulative Statement on Settlements with Creditors”;
· Memorial Order No. 6-авт “Accumulative Statement on Settlements with Creditors”;
· Memorial Order No. 7 “Accumulative Statement on Settlements in Order of Scheduled Payments”;
· Memorial Order No. 7-авт “Accumulative Statement on Settlements in Order of Scheduled Payments”;
· Memorial Order No. 8 “Accumulative Statement on Settlements with Accountable Persons”;
· Memorial Order No. 8-авт “Accumulative Statement on Settlements with Accountable Persons”;
· Memorial Order No. 9 “Accumulative Statement on Retirement and Replacement of Non-Current Assets”;
· Memorial Order No. 9-авт “Accumulative Statement on Retirement and Replacement of Non-Current Assets”;
· Memorial Order No. 10 “Accumulative Statement on Retirement and Replacement of low value items”;
· Memorial Order No. 10-авт “Accumulative Statement on Retirement and Replacement of low value items”;
· Memorial Order No. 11 “Set of Accumulative Statement on Food Receipts”;
· Memorial Order No. 11-авт “Set of Accumulative Statement on Food Receipts”;
· Memorial Order No. 12 “Set of Accumulative Statement on Food Spending”;
· Memorial Order No. 12-авт “Set of Accumulative Statement on Food Spending”;
· Memorial Order No. 13 “Accumulative Statement on Spending of Production Reserves”;
· Memorial Order No. 13-авт “Accumulative Statement on Spending of Production Reserves”;
· Memorial Order No. 14 “Accumulative Statement of accruing the Income of a Special Fund of Public Sector Entities”;
· Memorial Order No. 14-авт “Accumulative Statement of accruing the Income of a Special Fund of Public Sector Entities”;
· Memorial Order No. 15 “Accumulative Statement for settlements with Parents for the Maintenance of Children”;
· Memorial Order No. 15-авт “Accumulative Statement for settlements with Parents for the Maintenance of Children”;
· Memorial Order No. 16 “Accumulative Statement of off-balance sheet accounting”;
· Memorial Order No. 16-авт “Accumulative Statement of off-balance sheet accounting”;
· Memorial Order No. 17;
· Memorial Order No. 17-авт;
· Book of analytical accounting of deposited wages and scholarships;
· Register of deposited sums;
· The accounting information;
· The book “Zhurnal-holovna”.
It should be recalled that current forms and the procedure for their filling is regulated by the Guidelines on the forms of memorial orders of budgetary institutions and the procedure for their drawing up, approved by the order of the State Treasury of Ukraine dated 27.07.2000 No. 68.
The State Fiscal Service of Ukraine in its Individual Tax Advice “On the adjustment of the financial result before tax in the event of the liquidation of a part of a separate object of fixed assets” of 11.12.17, No. 2926/6/99-99-15-02-02-15/ІПК reported: in the case of liquidation of a part of a separate object of fixed assets (hereinafter − FA) for the company, correcting the financial result on the difference under sec. III of TCU, it is necessary to apply the difference under para. 138.1 and 138.2 of TCU.
The Ministry of Finance of Ukraine by its Order “On Approval of the National Public Sector Accounting Standards 136 “Biological assets” of 15.11.17, No. 943 approved the National Public Sector Accounting Standards 136 “Biological assets”, which defined the procedure for accounting for biological assets related to agricultural activity, and obtained in the course of their biological transformation of additional bio assets and agricultural products, as well as disclosure of financial information about them.
This standard will apply to public sector accounting entities.
New National Public Sector Accounting Standards 136, in particular, determines that a biological asset is an animal or plant that, in the process of biological transformation, is capable of providing agricultural products and/or additional biological assets, or otherwise contributes to the economic benefits.
A biological asset and/or agricultural product will be recognized as an asset if the entity of public sector controls the assets as a result of past events, there is a likelihood of future economic benefits and/or utility benefits associated with their use and their value can be reliably determined.
Control and Responsibility
The President of Ukraine signed the Law of Ukraine “On Amendments to Certain Legislative Acts to Ensure Compliance with the Rights of Participants in Criminal Proceedings and Other Persons by Law Enforcement Bodies during the Pre-trial Investigation” of 16.11.17, No. 2213-VIII designed to protect business from the failure of production processes during fighting crime.
The law came into force on December 7, 17. From now on:
· any person has the right to receive an extract from the Unified Register of Pre-trial Investigations (hereinafter − URPI) regarding his/her application or notification of a criminal offense. Investigator, prosecutor are required to provide such an extract within 24 hours from the moment the information is submitted to the URPI;
· a person, who is not a party to criminal proceedings, but concerning the person (his/her property) it is carried out procedural actions, has the right to file a request for criminal proceedings within a reasonable time and to contest violations of such terms;
· the prosecution party must justify the need to remove the originals of documents or their copies and make copies of the necessary information with the involvement of a specialist. But the removal of electronic information systems is prohibited.
In addition, a compulsory video recording of a search was introduced. Video recording is an integral part of the search protocol. In addition, the security guard has the right to make video of the search. If a search is carried out in housing, such person has the right to use the lawyer’s assistance at any stage of its implementation.
The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Audit of Financial Reporting and Auditing Activities” (hereinafter − the Law). It brings the norms of national legislation in the field of auditing in line with EU legislation, in particular with the provisions of Directive 2006/43/ЄС and Regulation 537/2014.
The Law also clarifies the mechanism for financing the public oversight body (hereinafter − POB), the Audit Chamber of Ukraine (transition to a mixed financing model at the expense of a fixed contribution (3 minimum wages for financing of POB and 0.3 minimum wages − ACU) and the variable component (no more than 2 % of the remuneration amount under the contract from the obligatory audit of the relevant entity).
In addition, the Law defines the requirements for auditors, who have the right to conduct a statutory audit of financial reporting, including a mandatory audit of state unitary enterprises and economic partnerships, in the authorized capital of which more than 50% of the shares belong to the state, political parties (application of the rules and regulations, determined exclusively by this Law).
The law also:
· delayed imposition of penalties and reduced the size of the responsibility of auditors (from 200 minimum wages to 200 non-taxable minimum incomes), as well as penalties for liability for non-publication of financial reporting together with an auditor’s report;
· specified the mechanism of insurance of professional liability of auditors, namely: instead of compulsory insurance, the introduction of civil liability insurance, as required by Directive 2006/43/ЄС;
· specified the list of non-audit services (clarified limits on the simultaneous provision of services for statutory audit and non-audit services);
· implemented requirements of European legislation regarding the certification of auditors (clarified the mechanism for crediting theoretical knowledge to a person who is certified, the requirements for certification are specified depending on the experience of the applicant, etc.).
The law will come into force on 01.01.18 and will be put into effect on 01.10.18, except for sub-para. 1 of para. 9 of sec. X “Final and Transitional Provisions” of this Law on amendments to the Code of Ukraine on Administrative Offenses, which should come into force 12 months after the effective date of this Law.
The Cabinet of Ministers of Ukraine adopted the Resolution “On approval of the list of goods, the export and import of which to be the subject to licensing, and quotas for 2018” of 20.12.17 No. 1018 approved for 2018:
1) volume of the quota of goods, export of which is subject to licensing;
2) a list of goods (ozone-depleting substances), the export and import of which are subject to licensing;
3) a list of goods that may contain ozone-depleting substances, the export and import of which are subject to licensing (except for goods transported in containers with personal property);
4) a list of goods, the import of which from the Republic of Macedonia is subject to licensing within the tariff quota in accordance with the provisions of the Free Trade Agreement between the Republic of Macedonia and Ukraine of January 18, 2001;
5) a list of goods, the export of which is subject to licensing.
In addition, government officials found that the licenses for export and import of goods specified in the resolution of the Cabinet of Ministers of Ukraine dated December 28, 2016, No. 1009 that were not used by foreign economic operators in 2017, would be valid until 01.03.18, unless otherwise provided relevant international treaties of Ukraine.
Budgetary Relations
The Verkhovna Rada of Ukraine approved the main budget of the state − the state budget for 2018.
Note the following important points of the State Budget:
1) minimum wage in the monthly amount will be UAH 3.723 from January 1, and in the hourly amount UAH 22.41 from January 1;
2) subsistence minimum:
· from 01.01.18 will amount to UAH 1 700 per person for a month, from July 1 − UAH 1 777, from December 1 − UAH 1 853;
· for children under 6 years of age: from 01.01.18 − UAH 1 492, from July 1 − UAH 1 579, from December 1 − UAH 1 626;
· for children aged 6 to 18 years: from January 1, 2018 − UAH 1 860, from July 1 − UAH 1 944, from December 1 − UAH 2 027;
· for able-bodied persons: from January 1, 2018 − UAH 1 762, from July 1 − UAH 1 841, from December 1 − UAH 1 921;
· for persons who have lost their ability to work: from January 1, 2018 − UAH 1 373, from July 1 − UAH 1 435, from December 1 − UAH 1 497.
Also, in 2018, the level of maintenance of the subsistence minimum was approved for the purpose of allocating assistance to low-income families in percentage terms to the subsistence minimum for the main social and demographic groups of the population. It is for able-bodied persons − 21%, for children − 85%, for disabled people and invalids − 100% of the subsistence minimum.
The upper limit of state aid for low-income families is established. In 2018, it can not exceed 75% of the level of the subsistence minimum for the family.
Financial Markets
The National Bank of Ukraine simplified the rules for banks to execute documents for foreign currency transactions. This is stated on the official site of the regulator.
Namely: customers are entitled not to certify by a seal the copies of documents provided to the bank for currency transactions. Now, for the assurance that the provided copies of the documents are valid, it is enough for banks to see only the signature of the client or the authorized person on them.
In addition, softening also affected the requirements for banks to report on foreign exchange transactions. Thus, from January 1, 2018, banks no longer need to send a daily information file to the NBU with data on its foreign exchange transactions of clients.
Banks will provide information on foreign exchange transactions of clients to the NBU in updated forms of statistical reporting in accordance with the Rules of the organization of statistical reporting submitted to the National Bank of Ukraine, approved by the NBU resolution dated 01.03.16, No. 129.
The National Bank of Ukraine by its Resolution “On Amendments to Certain Legal Acts of the National Bank of Ukraine” of 21.12.17, No. 137 approved a new version of the Regulation on the Procedure for Granting to Non-Bank Financial Institutions (hereinafter − NFI) and the National Postal Operator of General Licenses on realization of foreign exchange transactions (hereinafter − Regulation).
In particular, the NBU softened the conditions for issuance general licenses for foreign exchange transactions. Namely:
· minimum amount of equity capital of NFI for the conduct of currency exchange activities was reduced by half − to UAH 10 million, provided that such an institution will operate with no more than 50 structural subdivisions. Each subsequent increase in the number of structural subdivisions by 50 units will require an increase in the minimum equity capital by UAH 10 million;
· period of work of NFI in the national currency was reduced from three years to one for obtaining a general license for the execution of the corresponding transactions in foreign currency.
At the same time, the new Regulation sets more stringent requirements for the financial condition, business reputation of managers and owners of significant participation in NFI.
Therefore, in order to be eligible for foreign exchange transactions, non-bank financial institutions will have to meet the requirements for the absence of a cyclical ownership structure and the availability of approval by the competent authority to acquire or increase a significant participation in NFI.
Also, in the event of NFI committing a certain number of material violations or in the event that employees authorized by the NBU are prevented from carrying out a verification of NFI structural unit, the regulator will be able to terminate the general license of the institution.
For non-bank financial institutions that already have general licenses for foreign exchange transactions, it is established a transition period to bring their activities into line with the new requirements. Thus, existing licensees are required to:
· submit to the NBU a questionnaire containing information on the financial position and financial obligations of NFI, the business reputation of managers and owners, relations with other persons during two months from the date of entry into force of the amendments;
· ensure that its activities are in line with the new requirements of the Regulation and submit written assurances to the NBU regarding the compliance of their activities with the requirements of the Regulation during six months from the day of the entry into force of the amendments.
The Ministry of Finance of Ukraine by its Order “On approval of the procedure for transferring to the state budget customs and other payments made before/during customs clearance” of 01.11.17, No. 898 introduced a new unified account for payment of customs duties.
Representatives of the financial department offered a phased transition to the unified deposit account:
· from January 15 to July 16, 2018 − transitional period (at the request of the company);
· from July 17, 2018 − to pay customs duties to a new account is required on a permanent basis.
The introduction of the new deposit account, which will be opened in the State Treasury in the name of the State Fiscal Service of Ukraine, will enable companies to pay customs duties to one account, regardless of which customs will carry out customs clearance.
It should be recalled that every customs has its own treasury account. Therefore, companies at the time of customs clearance of goods should transfer customs payments to the account of the customs that conducts it.
It should be noted that it is not allowed to transfer funds from treasury accounts of customs to a new account of the SFSU. But taxpayers will have the opportunity, as before, to return the transferred funds if necessary.
The order enters into force from the day of its official publication (except para. 2, which will come into force on 10.10.2018).
Labor and Salaries
The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to the Procedure for the Implementation of Measures to Promote Employment, Refunds for the Financing of Such Measures in the Case of Breaking the Guarantees of Employment for Internally Displaced Persons” of 06.12.17, No. 935 introduced adjustments to the procedure for reimbursement of expenses of employers for the salary of migrants employed by the direction of the employment centre. If earlier compensation could be received for six months in a row, according to the new rules it will be paid in a month - for odd months of work during the year. In general, as before, the salary will be reimbursed in no more than six calendar months (if the person belongs to categories with additional guarantees of employment assistance − no more than 12 months).
It was also clarified that the payment of funding would be discontinued in the event of cancellation of the certificate of registration of internally displaced persons, and added that no compensation is paid in the case of employment of the person for whom compensation has already been paid.
The Ministry of Social Policy of Ukraine in its letter “On the Employment of Workers with Recordings from “LNR” and “DNR” of 18.10.17, No. 447/0/22-17/134 explained that the legislation does not provide for the possibility of refusing to employ with the presence in the workbook of recordings made by organizations that were illegally created in the territory of Ukraine. At the same time, the employer should not invalidate or correct the previous records in the work book during the acceptance at a new place of work (in such a situation, the records are declared invalid by the court).
Consequently, if the work book is “polluted” with similar recordings, then this does not mean that it is corrupted: only such separate information will be invalid. Therefore, do not pay attention to such data. The work book should be kept in the usual order.
Land Relations
The Cabinet of Ministers of Ukraine by its resolution “Some issues of improving the mechanisms for the protection of property rights to land plots” of 06.12.17, No. 925 determined that the state registration of ownership of a land plot, which was not registered before January 1, 2013, in accordance with the legislation acted at the moment of its acquisition, would be carried out, if it establishes the fact of transfer of rights from the person whose information to be contained in the State Land Cadastre, to the person claiming his/her rights. Partly the resolution will come into force from the day of its official publication, and part of the rules - from 01.03.2018.
Summary of Court Rulings
The Supreme Economic Court of Ukraine by its resolution of 04.12.17 in the case No. 11/173-06 named one of the methods of legalizing of unauthorized constructions the recognition by the court of the right of ownership to self-constructed real estate. For this, the owner of the land plot provides it in the prescribed manner to a person under the already built real estate.
However, such a way of legitimizing self-construction does not always work. For example, judges of the Supreme Economic Court of Ukraine in its decision of 04.12.17 in the case No. 11/173-06 refused to recognize the ownership of self-construction, despite the lack of objections of the owner of the plot and building construction standards compliance.
This was substantiated by the fact that the developer did not comply with the legal procedure for the execution of construction works and the commissioning of the facility. That is, he/she did not provide the court with any evidence of the existence of his/her permit documents for the right to perform construction works, did not comply with the established procedure for resolving land development issues.
The Supreme Economic Court of Ukraine by its resolution of 04.12.17 in the case No. 908/320/17 recognized: the lack of budgetary funds is not the reason for the dismissal of labor departments and social protection from fulfilling obligations to compensate for the average earnings of workers called for military service. It is about compensation for 2014-2015, since from January 1, 2016, the average earnings of workers mobilized should be paid by companies at their own expense (Art. 119 of the Labor Code of Ukraine).
However, some companies are still trying to get compensation for 2014-2015. Thus, the Economic Court of Zaporizhzhia region by a decision of 13.04.17 in the case No. 908/320/17 satisfied the company’s claim to recover from the city labor and social protection of compensation of average earnings to mobilized workers, which was paid back in October-December 2015. The court determined that the company fulfilled its obligations to save the place of work and payment of average earnings to mobilized workers and informed the labor administration of the amount of such payments by submitting reports in the prescribed form.
Consequently, the Supreme Economic Court of Ukraine agreed with the findings of the local court and left its decision on the satisfaction of the claim unchanged.
The Other Things
The President of Ukraine signed the Law of Ukraine “On the Accession of Ukraine to the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin” of November 8, 2017, No. 2187-VIII.
The Convention establishes identical provisions on the origin of goods traded by states under free trade agreements, and provides for the possibility of diagonal cumulation. This Agreement allows its member countries to use raw materials and components to each other, and not only national ones, in order to preserve the preferential terms of trade.
Today there are 24 Contracting Parties of the Convention, 6 of which already have free trade agreements with Ukraine (EU, EFTA, Montenegro, Macedonia, Moldova, Georgia). Two more countries that are parties to the Convention are still negotiating free trade, namely, Turkey and Israel.
The Ministry of Education and Science of Ukraine by its Order “On Approval of Certain Regulatory Acts on Entrance the Higher Education Institutions” of 13.10.17, No. 1378 approved the conditions for conducting of campaign of the entrance the higher education institution in 2018.
Thus, from July 2 to 25, entrants must register their electronic cabinet and download there the necessary documents for entrance. A direct reception of applications will begin on July 12.
One of the innovations of the entrance campaign − 2018 was the reduction in the number of applications that can be submitted by entrants. Under the new conditions, the applicant can submit 7 applications maximum (in 2017, it was allowed to submit 9 applications) for no more than 4 specialties.
Higher educational institutions should develop and publish their own rules for admission of entrants before 31.12.17. These rules will include a list of educational programs, as well as bids, which will be followed by enrolment of entrants, the procedure for conducting competitive selection, a list of competitive subjects for which the entrants will submit an EIT certificate.
In addition, in 2018, the cost of education can still be paid for vouchers. They are issued to entrants by the employment centres, older than 45 years, with a minimum of 15 years’ insurance experience.
