Legislation overview (April 2016)

Taxes

VAT

The State Fiscal Service of Ukraine reported in subcategories 101.08 “ZIR”: after the cancellation of registration of a person as a payer of value added tax (hereinafter − VAT), the balance of the funds on the electronic account after settlements with the budget based on the results of the last reporting (tax) period should be transferred to the budget.

Monetary obligations erroneous paid and/or overpaid can be returned to the taxpayer upon his/her application according to Art.43 of TCU.

In case of cancellation of registration of the taxpayer − subject to a special tax regime or his/her exclusion from the Register of entities of special tax regime of his/her additional electronic accounts, where funds are absent, should be closed not earlier than within the next business day following the day of such cancellation/exclusion.

To close an electronic account (including additional electronic account) the State Fiscal Service (hereinafter – SFS) sends to the body, which provides treasury services of budget funds, the Register of taxpayers, where should be indicated the name or full legal name of the taxpayer, tax number or passport number and series (for individuals - entrepreneurs who have a mark in a passport on the right to make any payments for the series and passport number), individual tax identification number of the taxpayer and the tax amount payable to the budget.

The State Fiscal Service of Ukraine in its letter “On determination of tax liabilities for VAT when receipt of funds mistakenly transferred by the counterpart after the termination of the contract of supply; offsetting by the supplier of goods/services of received previous (advance) payment from the buyer to repay the debt under another contract; referring of tax invoices to a tax credit by the main company, those tax invoices that mistakenly prepared by the supplier on branches, deprived of the right of tax invoices preparation by the main company” of 15.03.2016, № 5575/6/99-99-19-03-02-15 provided explanations regarding taxation of certain VAT transactions and preparation of tax invoices (hereinafter – TI).

In particular, the controllers noted the following:

1) when receiving on the current account of funds mistakenly transferred by the contractor after termination of the contract of supply, the liabilities of the tax payer should not be accrued, accordingly, the TI should not be prepared;

2) if the seller - VAT payer on the date of receiving previous (advance) payment identified the tax liabilities of VAT, and further there were circumstances, due to which it was impossible to meet the conditions of the contract of supply of goods/services, and/or there was a change of the contract and/or other contract was signed, the seller – VAT payer has the right to make adjustments calculation to TI and reduce accrued amount of VAT liabilities. Preparation of this calculation is to be made on the date when the document was signed, under which the funds received under one supply contract of goods/services would be counted in payment for cost of goods/services under second supply contract. In this case it should be indicated in column 2: “Offset of advance payment on account of delivered goods/services under another contract № __ of __”;

3) the supplying company is entitled to prepare TI on a branch (structural unit) in case if the main company delegated  to it the right to prepare TI. If the branch has no right to prepare TI, the supplier should prepare TI on the main company.

The Ministry of Finance of Ukraine in its letter “On the deadline for registration of tax invoice/adjustment calculation in URTI” of 30.03.2016, № 31-11120-09-10/9133 states that the SFS did not execute the order of the Ministry of Finance, since the SFS did not find it necessary to reconsider its position on the issue of the deadline of the registration of TI and/or adjustment calculation to TI in the Unified register of tax invoices (hereinafter – URTI), giving arguments that according to the TCU the taxpayer has the opportunity to register TI and/or adjustment calculation to them in URTI within 15 calendar days following the date of their preparation or within 180 calendar days from the date of their preparation on condition of penalties established by Art.1201 of TCU.

However, the Ministry of Finance insists that the taxpayer has the right to register in URTI the TI/adjustment calculation within 365 calendar days from the date of their preparation, and norms of Art.1201 of TCU only establish the responsibility of the taxpayer for the absence of registration in URTI of TI and/or adjustment calculation to them over a period from the date of their preparation.

The Ministry of Finance of Ukraine by its Order of 18.03.2016, № 373 approved the amendments to the Regulation on the registration of payers of value added tax, approved by the Order of the Ministry of Finance dated 14.11.2014, № 1130 (hereinafter – Regulation № 1130), namely:

• in case of election or transition to the simplified taxation system, changes of unified tax rate or  rejection of the simplified taxation system, the entity should be registered by the payer of value added tax (hereinafter – VAT) not earlier than the date of change of the tax system, subject to the provisions of Art. 293 sec. XIV of TCU, which establish the unified tax rates for the third group payers that provide VAT payment without payment of this tax (paras.3.6. of Regulation № 1130);
• a new application for registration by the VAT payers in case specified by paragraphs 3.9 of Regulation № 1130, could be submitted to the supervisory authority with desired date of registration that was specified in the previous unaccepted application, if the entity, which is voluntarily registered as a VAT payer, liquidates the shortcomings, established by sec. 1 of paras.3.9 of Regulation № 1130, and this new application is submitted at least three working days before the beginning of the tax period from which such entity can be considered as a VAT payer and can have a right to a tax credit and a issuance of tax invoices;
• if the registration application submitted to the supervisory authority electronically, or refusal in registration or to proposition to submit a new application for registration should be posted in electronic form by the supervisory authority and should be sent to the email address from which this application received (paras. 3.10 of Regulation № 1130);
• if the application for cancellation of VAT registration submitted to the supervisory authority electronically, refusal to cancellation of registration or proposition to submit a new application for cancellation of registration should be posted by the supervisory authority in electronic form and sent to the email address from which this application received (paras. 5.4 of Regulation № 1130);
• decisions of the supervisory authority to cancel the decision on cancellation of VAT payer registration or his/her certified copy should be sent to the SFSU with a covering letter in 10 days after adoption (paras. 5.10 of Regulation № 1130).

PIT

The State Fiscal Service of Ukraine in its letter “On taxation of individual income tax of personal income, resulting from transfer of ownership of the mortgaged property to mortgage holder” of 08.04.2016, № 7884/6/99-99-17-03-03-15 explained: in case of acquiring of ownership of the immovable (movable) property by a bank through the including on its balance of the mortgaged property (subject of the mortgage) it should be considered that the individual - property guarantor alienated (sold) his/her own property. In addition, the income of an individual (property guarantor) is the value, which is determined at the moment of acquisition by the bank of ownership of the mortgaged property (encumbrance), to which the norms of Articles 172 and 173 are to be applied. Bank as a tax agent is obliged to perform all functions defined by sec. IV of TCU, including it should reflect specified income in the tax calculation of form № 1DP on the grounds of “104”.

The State Fiscal Service of Ukraine in its letter “On taxation of certain types of incomes by the personal income tax” of 15.04.2016, № 8587/6/99-99-17-03-03-15 noted: if the company at its own expense pays services of travel organization of the individuals that are not related to the performance of their duties of employment or under the civil law contracts (agreements) concluded with these persons, the value of the provided services is included in the total monthly (annual) taxable income of such persons as an additional benefit and should be taxable by the personal income tax on general grounds.

The State Fiscal Service of Ukraine in its letter “On taxation of the personal income tax and accrual of the unified contribution for obligatory state social insurance on the benefits amount due to temporary incapacity for work as a result of illness or injury, which is not related to the work accident” of 13.04.2016, № 8293/6/99-99-17-03-03-15 notes: if the tax agent (legal entity) accrues (pays) to the individuals (employees) temporary disability benefits for the first five days, the amount of such assistance should be included in wages and be taxable by the personal income tax (hereinafter – PIT)and is the base for accrual of the unified contribution.

In addition, if the specified assistance is paid at the expenses of the Fund, which is not the employer of persons transported from the areas of the antiterrorist operation, the amount of such assistance should be included in total monthly (annual) taxable income of the taxpayer as other incomes and to be the subject to PIT and is not the basis of accrual of the unified contribution.

Excise tax

The State Fiscal Service of Ukraine in its letter “On registration of the excise tax by the payer, registration of excise invoices in electronic administration system of fuel realization when its use for own production needs” of 24.03.2016, № 6497/6/99-99-19-03-03-15 explained: if the business entity transferred fuel to contractors to perform works/services provision of harvesting (in other words, he/she used the fuel for own production needs through machinery fuelling to work on the fields), the related transactions to be the subject to the excise tax. Because, in fact, fuel is transferred under the contracts on services production of primary products of a customer and such transactions are the fuel realizations according to the interpretation of Sec. 2 of subpara.14.1.212 of the Tax Code of Ukraine (hereinafter – TCU). Consequently, the relevant entity is obliged to be registered as the excise tax payer and in case of fuel transfer is obliged to prepare the excise invoice in electronic form under each commodity code of subcategory according to UCC FEA (Ukrainian Commodity Classification of Foreign Economic Activities) of realized (spent) fuel and register it in the Unified Register of excise invoices.

Simplified tax system

The State Fiscal Service of Ukraine in its letter “On the simplified system of taxation, accounting and reporting” of 08.04.2016, № 8481/10/26-15-12-04-18 reminded: the dividends received by the unified tax payer – legal entity from other taxpayers to be not included in the income of the unified tax payer (hereinafter – unified tax payer) (sub-para.10 of 292.11 of the Tax Code of Ukraine, hereinafter – TCU).

However, the issuer of corporate rights, which makes the decision to pay dividends to its shareholders (owners), accrues and pays the advance payment of income tax to the budget (sub-para. 57.1¹.1 of TCU).

Thus, the legal entity – unified tax payer does not include dividends received from other taxpayers to the income, in addition, the legal entity (the issuer of corporate rights) in the case of a decision to pay dividends to its shareholders (owners) is required, in the manner determined by para.57.1¹ of TCU, to accrue and pay to the budget the advance payment of income tax when the payment of dividends, calculated from the entire amount of such payment.

Tax benefits

The State Fiscal Service of Ukraine reported on its official website about such reference-books updated as of 01.04.2016:

• № 78/1 reference-book of tax benefits, which are losses of budget revenues;
• № 78/2 reference-book of other tax benefits.

There are provided in the reference-books the list of benefits of income tax, taxation of non-profit institutions and organizations, land fee, VAT, state duty, etc., and the period of validity of privileges.

Accounting and Reporting

The State Fiscal Service of Ukraine in its letter “On the reflection in 3a and 3 of tax calculation f. 1ДФ of income amounts to which the coefficient is applied, provided by the para. 164.5 of Art. 164 of the Tax Code of Ukraine, namely with the taking into account the coefficient or without it” of 04.04.2016, № 7309/6/99-95-42-02-16 reports: according to p. 164.5 of the Tax Code of Ukraine(hereinafter − TCU) during accrual (provision) of revenues in any non-monetary form, the taxation base is the value of such income, calculated at regular prices, rules of which are established in accordance with the TCU, multiplied by the coefficient which is calculated by the following formula:

C = 100 ÷ (100 - Tr),

Where

C is coefficient;

Tr is tax rate established for such revenues at the time of their accrual.

The tax rate 18% valid in 2016 is applied to the formula (coefficient of 1.21951 is for tax rate 18%).

Considering that the coefficient, provided for by para. 164.5 of TCU, is used to determine the tax base, in case of provision to the taxpayer of revenues in kind, amounts of accrued income should be reflected on the basis of this coefficient in columns 3a “The amount of accrued income” and 3 “The amount of paid income” of tax calculation in form № 1 ДФ.

The Ministry of Finance of Ukraine on its official website posted a draft order “On amendments to the current order of the Ministry of Finance of Ukraine “On Approval of form of tax return about the property state and incomes and Regulations for filling in the tax returns about the property state and incomes” of 02.10.2015, № 859.

The draft, in particular, provides for:

• to expand the content of Section II “Incomes received in the reporting (tax) year” of the Declaration by three lines in a part of obligation of the payer to reflect investment income, net profit entrepreneurs and entities of independent professional activities that are the subject to taxation;
• to clarify the content of Section IV “Tax liabilities on individual income tax/war tax” in the Declaration in the part of the cancellation of obligation of the fiscal service to return the tax from the budget overpaid during the previous year by the taxpayer – entrepreneur in case of excess of the amount of advance payments over the amount of tax obligation from the net profit;
• to cancel the current Annex F1 to the Declaration, where  before 1 January 2016 there was carried out recalculation of tax withheld from the labor revenues of an individual during two years or more by the tax agents, and at the same time the total annual amount of  paid incomes exceeded 120 minimal salaries. In this regard, the current Annex F2 is considered to be Annex F1, and the number of Annexes should be reduced from four to three;
• to clarify the content of Section I “Calculation of investment income” in Annex F1 in a part of obligation to identify by the individual the name of the legal entity/full legal name of the individual, code of EDRPOU (Unified State Register of Businesses and Organization of Ukraine)/registration card, which acquired investment assets in declarant;
• to make appropriate amendments to Regulations for filling in Declaration and its annexes.

The State Fiscal Service of Ukraine in subcategories 101.17 “ZIR” explained how to fill in the requisite “Supplier (seller)”/ “Recipient (buyer)” in tax invoice (hereinafter – TI), if the supplier or the recipient to be a branch (structural unit), which to be delegated the right to issue TI by the main company.

Thus, referring to para.1 of the Procedure of filling a tax invoice, approved by the Ministry of Finance of Ukraine of 31.12.2015, № 1307, controllers emphasize that:

• when the preparation of TI by the branch or other structural subdivision of the taxpayer in column “Supplier (seller)” of TI, firstly it should be indicated the name of the main company registered as a taxpayer, defined by statutory documents, and separated by a comma - the name of this branch (structural subdivision);
• in case of supply of goods/services to the branch (structural subdivision) of the taxpayer when TI preparation in column “Recipient (buyer)” firstly it should be noted the of the main company, registered as a payer of value added tax (hereinafter – VAT), and separated by a comma – the name of this branch (structural subdivision), which on behalf of the main company (buyer) is actually a party to the contract.

The State Fiscal Service of Ukraine on its official website released the draft order of the Ministry of Finance “On Amendments to certain legislative acts of the Ministry of Finance of Ukraine”.

It provides for to make amendments to:

• the Procedure of filling a tax invoice, approved by the Ministry of Finance of 31.12.2015, № 1307;
• the form of tax return of VAT, approved by the Ministry of Finance of 28.01.2016, № 21;
• the Regulations on registration of VAT payers, approved by the Ministry of Finance of 14.11.2014, № 1130.

Thus, with the adoption of such an order, the Annex to the Registration application of VAT payer – Reasons for registration by the payer of value added tax or the criteria by which the taxpayer meets the requirements of section V of the Code – should not be submitted to the supervisory authority.

Separately there will be determined the compilation of consolidated tax invoices for continuous and rhythmic supplies by the VAT payers, which carry out deliveries (including wholesale), transfer, distribution of electricity and/or thermal energy, the supply of coal and/or products of enrichment of commodity items 2701, 2702, 2703 00 00 00, 2704 00 according to UCC FEA and which determine the date of the tax liability and the tax credit on a cash basis (para. 44 of subsection 2 of sec. XX of TCU).

There will be set out a new version of Annex 2 to the VAT declaration – the certificate of the amount of the negative value of the reporting (tax) period, which is included in the tax credit of the next reporting (tax) period (A2) and Annex 3 - Calculation of the budgetary compensation (A3).

The Ministry of Finance of Ukraine by its Order “On Amendments to the Ministry of Finance of Ukraine of September 28, 2015, № 841” of 10.03.2016, № 350 approved a new form of the report on the use of funds granted for a business trip or on account.

The form was not significantly amended, only calculation of the amount of money spent in excess was clarified. Now, there will be one line to reflect not returned amount of money spent in excess. In particular, the amendments in the form of advanced report caused by the use in 2016 of 18% tax rate on personal income tax (hereinafter – PIT)  to the amount spent in excess (not returned) funds.

The State Fiscal Service of Ukraine (hereinafter – SFSU) in its letter “On providing of tax advice” of 08.04.2016, № 7889/6/99-99-21-05-15 noted: only fuel should be reflected in the inventory report of fuel consumption specified in subpara.215.3.4 of TCU according to UCC FEA. In addition, the tax officers noted: according to para.9 of subsec.5 of sec. XX of TCU, the data of taking inventory of volumes of fuel consumption remaining could be verified by the supervisory authority in the prescribed manner within six calendar months from the date of its submission. In case of inconsistency of fuel amounts by results of verification, specified in the act of inventory, actual data and/or accounting data of the company the supervisory authority makes appropriate adjustments in the Unified Register of excise electronic invoices on the basis of the inspection report.

The Ministry of Finance of Ukraine in its letter “On peculiarities of the expenses reflection in the accounting” of 22.04.2016, № 31-11410-06-5/11705 gave the explanation on the peculiarities of reflection in accounting of the expenses that to be not confirmed by the primary documents of counterparties.

The Ministry of Finance concluded in the letter that expenditures, under which there were not received primary documents from counterparties at the moment of preparation of financial statements, should be recognized in the period of income for which they to be implemented, or their actual origin, if the expenses could not be directly linked to the income. At the same time, it is enough before the receipt of the primary documents from the counterparty to use the primary documents prepared by the company independently in any form in compliance with the requirements of the Law of Ukraine “On Accounting and Financial Statements” of 16.07.1999, № 996-ХІV regarding the mandatory details of the primary document.

Upon receipt of primary documents after the preparation and approval of the financial statements, the actual amount of expenses specified in these documents could be different from calculated amount previously recognized in the period of their origin. These differences are the basis for the adjustments of previously recognized expenses amount, except for the case when such a difference is an error and has a significant impact on the financial statements of previous periods.

The Ministry of Social Policy of Ukraine by its Order “On approval of standard forms of documents” of 13.04.2016, № 391 in order to plan and control effectively over the targeted use of budgetary funds in the framework of the budgetary program КПКВК 2501200 “Social protection of citizens affected from the Chernobyl disaster” approved the following standard forms of documents:

• The report on payment of compensations, allowances and benefits provision to the citizens who affected from the Chernobyl disaster, “ВК 7” (form № 1);
• Passport of the data of company, which employees get compensation and assistance relating to wages or scholarships, according to the Law of Ukraine “On the status and social protection of citizens affected from the Chernobyl disaster” (form № 2);
• Calculation of expenses associated with the payment of compensation and assistance and benefits provision according to the Law of Ukraine “On the status and social protection of citizens affected from the Chernobyl disaster” (form № 3).

Public Procurement

The Ministry of Economic Development and Trade of Ukraine approved the Regulations on the tender committee and the authorized person(s) (the Order “On Approval of Regulations on the tender committee or an authorized person(s)” of 30.03.2016, № 557).

The tender committee should include at least five persons. If the number officers (officials) people in the staff of the customer are less than five persons, the tender committee should include all official persons of the customer. The management of the work of the tender committee provides its head. The head of tender committee should be appointed by the customer, organizes the work of the committee and be responsible for the performance of functions of the Committee. In the case of determining of the authorized person(s) by the customer, the organization of work is carried out by him/her (them) independently under the terms of the employment agreement (contract) or regulation.

The head, the secretary and other members of the tender committee, authorized persons can receive training on the organization and implementation of procurement.

The tender committee or authorized person(s):

• plans procurements, prepares and approves the annual procurement plan;  
• makes a choice of procurement procedure;
• conducts procurement procedures;
• provides equal conditions for all participants, objective and fair selection of the winner;
• provides a preparation, approval and storage of relevant documents on public procurement determined by the Law of Ukraine “On public procurement” of 25.12.2015, № 922-VIII (hereinafter − the Law on public procurements);
• provides a publication of information and report on public procurement under the Law on public procurements;
• conducts other actions provided for by the Law on public procurement.

The Ministry of Economic Development and Trade of Ukraine by its Order of 13.04.2016, № 680 approved an approximate tender documentation for procurement procedures – open biddings and competitive dialogue.

Approximate tender documents should be formed and submitted electronically.

It includes:

• mandatory information specified by Art. 22 of the Law of Ukraine “On public procurement” (hereinafter – the Law), which should be issued as a table consisting of three columns and submitted by a consumer as a separate file. The numbers should be indicated in column “1”, in column “2” – a list of the components of the tender documentation, in the column “3” - requirements for their filling according to the Law;
• information that is formed by the customer by means of filling of certain sidelines of electronic forms of electronic procurement system;
• annexes downloaded to electronic procurement system in separate files.

The contents of each section of the approximate tender documentation should be defined by the customer.

The Ministry of Justice of Ukraine in its letter “On submission of data on the final beneficiaries of owners” of 27.11.2015, № 1032/1375-0-2-15/8 noted that responsibility for the failure of information about the owners of substantial participation was not provided by the Law. In addition, it should be necessarily filled and submitted the first page of the relevant registration card (form approved by the Ministry of Justice of 06.01.2016, № 15/5) indicating the number of submitted pages and other filled pages.

Unfilled pages should not be submitted as required earlier.

In order to submit the information about the final beneficial owners it is required to fill in the application for state registration of changes to information on the legal entity, which is in the Unified State Register of Legal Entities and individuals – entrepreneurs and community groups. In the absence of the final beneficial owner (controller) of participant (founders) of the legal entity, if the participant (founder) is a legal entity, it should be an appropriate note in section 5 of the registration card.

Financial Market

The State Fiscal Service of Ukraine in its letter “On determination of incomes in the form of funds transferred to the current account of the bank, which to be liquidated” of 25.03.2016, № 6574/6/99-99-19-02-02-15 considered the mentioned complicated issue.

The SFS stated that transactions on receipt of funds for provided services on the current account of the bank under liquidation, which remained in the bank should be reflected according to the accounting rules in the formation of financial result before tax.

The National Bank of Ukraine officially informed that today only revenues of the following origin are counted on the foreign exchange current account of an individual:

• interests accrued on rest of the money on own or deposit accounts;
• funds received from another personal account of the individual;
• funds paid in cash by the owner of the account.

Crediting of other revenues within Ukraine (with some exceptions) on the current account in foreign currency has not been implemented before. These revenues should be sold in the interbank currency market of Ukraine and credited to the account in hryvnia equivalent.

The National Bank by its Resolution of 12.04.2016, № 256 (comes into force from the day following the day of its official publication) expanded the opportunities to credit funds in foreign currency from other sources within Ukraine on current individual account. In particular:

• funds received from relatives in non-cash form;
• funds received by a court decision or by the decision of other agencies (officials), which is the subject to enforcement;
• funds received from transactions in securities of foreign issuers that admitted to circulation in Ukraine in the prescribed manner, including the payment income under such securities (dual listing).

The National Bank of Ukraine (hereinafter − the NBU) by its Resolution “On Amendments to the Classifier of foreign currencies and precious metals” of 19.04.2016, № 269 made amendments to the mentioned Classifier approved by the NBU Board Resolution of 04.02.1998, № 34. Therefore, from May 4, 2016 the Classifier of foreign currencies will consist of:

Group 1 − currencies, which are widely used in making payments under international transactions, currencies of countries - EU members and precious metals. Such currencies are recognized as convertible purposes of the application of legislation on foreign investment in Ukraine;

Group 2 − currencies, which are not so widely used in making payments for international transactions;

Group 3 − nonconvertible currencies.

Labor and Salaries

The Verkhovna Rada of Ukraine approved the Law of Ukraine “On the State Budget of Ukraine for 2016” of 25.12.2015, № 928-VIII. The Art.7 and Art.8 of the Law provide for the changes in minimum wage and living wage from May 1, 2016. Thus, from 1 May to 30 November 2016 minimum wage per month will be UAH 1 450, but hourly wage rate will be equal to UAH 8.69 per hour.

Living wage rate per person per month, UAH

Summary of Court Rulings

The Supreme Court of Ukraine in its Resolution of 16.02.2016, № 2а/2370/2588/2012 supported the position of tax authorities on responsibility of agricultural company – VAT payer, which submitted the clarifying calculation about understatement of tax liability and did not paid a fine of 3%.

In court procedure there was considered a situation when the agricultural company – subject to special tax treatment when submitting the tax returns of VAT in July 2011 – March 2012 made a mistake that led to overstatement of the tax credit of VAT amount to be accrued.

According to special tax treatment, the VAT amount accrued by the agricultural company on value of its set agricultural goods/services, is not the subject to be paid to the budget and fully remains at its disposal to compensate the tax amount paid (accrued) to the supplier on the cost of production factors, at the expense of which the tax credit is formed and if such a tax amount remains - for other industrial purposes.

The Supreme Court of Ukraine in case of 06.04.2016, № 3-174гс16 regulated: current accounts should be opened for a specific person, in case of provision of relevant documents and the possibility to change the account holder. It is not provided in the Regulations on the procedure of opening, use and closure of accounts in local and foreign currencies approved by the National Bank of Ukraine of 12.11.2003, № 492. Therefore, the bank was unable to follow instructions of the company under the current accounts, owned by the individual, resulting in there are no any financial requirements in the company to the bank by the submitted applications for the transfer of funds and cash withdrawal. In addition, the Supreme Court established the following: it is impossible the termination of obligations of admission of counter claims of the same kind (ch.1, Art. 601 of the Civil Code) in conditions when a temporary administration is introduced in the banking institution.

The Supreme Court of Ukraine in its resolution of 06.04.2016 formed a legal position in the case № 6-409цс16. The employee can apply for settlement of labor disputes directly the district, district in the city, municipal or regional court within three months from the day when he/she learned or should have known about the violation of own right (Art. 233 of the Labour Code (hereinafter - the Labour Code). The settlement failure with the employee on the day of dismissal, or if he/she was not at work that day, the next day after his appeal with the requirement of settlement is the basis for the application of liability under Art.117 of the Labor Code. In this case, the course of three months period of appealing to the court starts from the day after mentioned payments regardless of the length of the settlement delay. According to Art.234 of the Labor Code in case of missed deadlines for valid reasons, established by Art.233 of this Code, the court may update these terms. The deadlines of appealing to the courts defined by the Art.228, 223 of the Labor Code should be are applied regardless of application of the parties. In each case the court is obliged to verify and discuss the reasons for missing these terms and give the reasons in its solution why it renew or considers impossible to restore violated period.

Civil service and budgetary relations

The Cabinet of Ministers of Ukraine by its Resolution “On Approval of Procedure for holding of a competitive tender to occupy a position in the civil service” of 25 March 2016, № 246 determined the procedure for holding of a competitive tender for the occupation of vacant position in the civil service. The main purpose of this competition is selection of candidates who can professionally perform their duties.

The governmental officials highlighted the requirements of the competition Procedure for holding of a competitive tender to occupy positions in the civil service, in particular in terms of the following:

• publication of information on vacant position of civil service and announcement of the competition;
• structure, procedure for formation and operation and powers of the competition committee;
• receiving and processing of documents for participation in competition;
• assessment of candidates to vacant positions of civil service;
• publishing the results of the competition.

It should be noted that during the competition there will be assessed the professional competence of a candidate for the vacant post of public service taking into account his/her personal achievements, knowledge and skills for the proper performance of official duties.

The Cabinet of Ministers of Ukraine by its Resolution “Certain issues of payment for labour of public employees in 2016” of 06.04.16, № 292 increases the salaries of public employees from May. The government defined the conditions of their salaries in accordance with the Law of Ukraine “On public service”, which to be effective 1 May 2016. In particular, there were established the official salary rates, the sizes of additional charge for occupational status, and also there were defined the belonging of public service positions to relevant groups of payment for labour.

The salary size will increase. Thus, the salary of a district specialist will be UAH 1 723, and the salary of a region specialist – from UAH 2 412. The additional charges for occupational status vary from UAH 200 (for the first status) to UAH 1 000 (for the ninth status).

The President of Ukraine signed the Law of Ukraine “On Civil Service” of 10.12 2015, № 889-VІІІ, which comes into force on 1 May 2016 and helps to regulate the status of civil servants, strengthens the personal responsibility of each public official and creates conditions of transparency of public authorities.

Now, the public officials will be divided into several categories.

So, it should be a master’s degree and the total length of service not less than seven years to have “A” category.

The heads of departments of the Cabinet of Ministers, Presidential Executive Office etc. get “B” category.

All the other officials are to be classified as “B” category.

In its turn, each category is divided into ranks. The salary of civil servants will depend on the very ranks.

According to the new Law, it is possible to become a civil servant only under condition of competitive selection process. A special commission will be created for this purpose.

The Cabinet of Ministers of Ukraine by its Resolution “On increasing of labour payment for employees of institutions, establishments and organizations of individual branches of budgetary sphere and amendments to certain resolutions of the Cabinet of Ministers of Ukraine” of 06.04.2016, № 288 approved the following:

1. From 1 May 2016 the official salaries (tariff rates, wage rates) of employees of the institutions, establishments and organizations of individual branches of budgetary sphere are established in the staffing schedule at the following rates:

• wage category 1 − UAH 1 516;
• wage category 2 − UAH 1 521;
• wage category 3 − UAH 1 532;
• wage category 4 − UAH 1 543;
• wage category 5 − UAH 1 612;
• wage category 6 − UAH 1 718;
• wage category 7 − UAH 1 825;
• wage category 8 − UAH 1 943;
• wage category 9 − UAH 2 050;
• wage category 10 − UAH 2 157;
• wage category 11 − UAH 2 334;
• wage category 12 − UAH 2 512;
• wage category 13 − UAH 2 690;
• wage category 14 − UAH 2 868;
• wage category 15 − UAH 3 057;
• wage category 16 − UAH 3 306;
• wage category 17 − UAH 3 555;
• wage category 18 − UAH 3 804;
• wage category 19 − UAH 4 053;
• wage category 20 − UAH 4 313;
• wage category 21 − UAH 4 562;
• wage category 22 − UAH 4 811;
• wage category 23 – UAH 5 060;
• wage category 24 – UAH 5 167;
• wage category 25 – UAH 5 344.

2. The mentioned above increase of official salaries (tariff rates, wage rates) of employees of the institutions, establishments and organizations of individual branches of budgetary sphere should be carried out within the salaries expenses prescribed by the Law of Ukraine “On State Budget of Ukraine for 2016” and the employees of 1-3 wage categories – at unified wage rate scale, including at the expense of payments related to the indexation of allowances, bonuses, premiums.

3. The official salaries (tariff rates) of employees, who established in the staffing schedule at the level of minimum wage as of 30 April 2016, should be increased by 10% from 1 May 2016.