Taxes
VAT
The State Fiscal Service of Ukraine in its letter “On peculiarities of procedure of recalculation of the share of application of goods/services, fixed assets in taxable transactions during 2016” of 12.01.17, № 599/7/99-99-15-03-02-17 explained to the VAT payers how to carry out the recalculation of the share of application of goods/services, fixed assets in taxable transactions for 2016. Thus, representatives of fiscal agency stated:
· the concept of the annual recalculation is that it is necessary to additionally accrue the tax liabilities (hereinafter – TL) on the amount of VAT, which should be included in the tax credit (hereinafter − TC) during the year and which corresponds to the share of amount of non-taxable transactions in the total transactions of delivery of goods/services. It should be carried out by making adjustments calculations to tax invoices prepared during the year;
· tax liabilities accrued during the year according to paragraphs 198.5 and 199.1 of TCU should be reflected in lines 4.1 and 4.2 of the declaration, depending on what tax rate is applied 20 or 7%. TL adjustments calculated according to para. 199.1 of TCU, should be reflected in line 7 of the declaration (IV quarter) 2016 due to the annual recalculation;
· calculation of the share of application of goods/services and fixed assets in taxable/non-taxable transactions should be carried out in line 3.1 of Table 1 of Annex D7 to declaration for last reporting period of 2016;
- in 2016 it should be carried out the recalculation of not TC, as it was before 01.07.15, but of the amounts accrued during 2016 under para. 199.1 of TCU, and determine the amount of tax liabilities, on which TL formed during this period should be increased or decreased.
The State Fiscal Service of Ukraine in its letter “On the application of the temporary regime of VAT exemption” of 20.01.2017, № 1298/7/99-99-15-03-02-17 reported: regime of exemption from VAT, determined by para.23 of sub-sec.2 of sec. XX of TCU, should extend to transactions of supplies of the taxpayers, including transactions of import of waste and scrap of ferrous and nonferrous metals, which to be carried out from January 1, 2017 to December 31, 2018 (inclusive).
Until the effective date of the legal act of the Cabinet of Ministers of Ukraine that determines the list of wastes and scrap of ferrous and nonferrous metals, which supply transactions, including import transactions, temporarily from 01.01.2017 to be exempt from VAT, it should be used the approved list of the Cabinet of Ministers of Ukraine of 12.01.2011, № 15.
The Ministry of Finance of Ukraine on the unified Web Portal of the government authority of Ukraine posted the notice of acceptance of the new procedure for keeping the Register of VAT refund, developed by the Ministry of Finance in order to facilitate doing business in Ukraine and reduce corruption. The approved project makes the mechanism of compensation of value added tax (hereinafter − VAT) transparent and timely and establishes equal conditions for all taxpayers.
In order to ensure transparency VAT refunds from January 10, 2017 it was formed the Unified public Register of applications. In addition, the Ministry of Finance developed and agreed with the State Treasury and SFSU the Procedure for maintaining Register.
New Procedure for maintaining of the Register of VAT refund provides for:
- formation and maintenance of Register of applications for return of sums of budget refund should be carried out on the basis of databases of SFSU and the State Treasury;
- determination of clear data belonging to this Register;
- automatic record of applications into Register, which carried out during the operational day in chronological order of receipt of such applications;
- the State Treasury conducts the budget VAT refund on the basis of the Register data;
- publishing of the Register on the official website of the Ministry of Finance.
New Procedure for maintaining of the Register of VAT refunds helps to reduce corruption when the VAT refund. Also, there will be established equal conditions for all taxpayers, which, in turn, improve the business environment in the country. In addition, the new mechanism will allow making VAT refunds timely and transparent manner.
Corporate Income Tax
The State Fiscal Service of Ukraine in its letter “On adjusting the financial result before tax in the amount of expenses for formation of provisions for compensation of payments of pensions under preferential terms” of 30.12.2016, № 28730/6/99-99-15-02-02-15 informed: compensation costs to the Pension Fund of Ukraine of payment of costs and delivery of pensions to persons who granted pensions under preferential terms to be belong to the payments related to wages.
Consequently, the financial result before tax when determining the subject to taxation of the company income tax should not be adjusted in accordance with sub-paras.139.1.1 and 139.1.2 of TCU on the amounts of expenses for formation and adjustment of provisions for compensation to the Pension Fund of Ukraine of the payment costs and delivery of preferential pensions and the amounts of actual payments at the expense of previously established provisions for such payments.
The State Fiscal Service of Ukraine in its letter “On accounting of the amounts of revaluation when accruing of amortization of fixed assets and non-current assets” of 28.12.2016, № 2649/2/99-99-15-02-02-10 notes: the subject to taxation of the income tax is the profit, which is determined by adjustment of the accounting financial result before tax on the differences determined by the provisions of the TCU.
The adjustment of the financial result before tax includes:
- increase of the financial result before tax in the amount of amortization of fixed assets (hereinafter − FA) or intangible assets (hereinafter – IA) accrued under Accounting Standards or IFRS (sec. 2 of para. 138.1 of TCU);
- decrease of the financial result before tax in the amount of calculated amortization of FA or IA according to para. 138.3 of TCU (sec. 2 of para. 138.2 of TCU).
The procedure of adjustment mentioned above involves accounting when the calculation of the income tax of the amounts of the depreciation of FA and IA calculated in accordance with the provisions of the TCU.
Also, adjusting of the financial result includes:
- increase of the financial result before tax in the amount of reduction and losses from usefulness decrease of FA and IA included in the expenses of the reporting period according to Accounting Standards or IFRS (sec. 3 of para. 138.1 of TCU);
- decrease of the financial result before tax in the increase amount and benefits from recovery of usefulness of FA and IA within previously attributed to expenses of reduction and losses from impairment of FA or IA conducted according to Accounting Standards or IFRS (sec. 4 of para. 138.2 of TCU).
This adjustment levels the impact on the calculation of the company income tax of results of revaluation (reduction, revaluation surplus) of FA or IA conducted under Accounting Standards or IFRS since such revaluation could be based on assumptions that take into account subjective judgments and do not reflect the real value of fixed assets.
Thus, the result of revaluation of FA or IA conducted under the provisions of Accounting Standards or IFRS are not included in the calculation of amortization of intangible assets in accordance with Art.138 of TCU and when the calculation of the company income tax.
PIT and War Tax
The State Fiscal Service of Ukraine in its letter “On the accrual and payment of the income tax from accrued (paid) income at their own expense” of 28.12.16, № 28351/6/99-99-13-02-03-15 focused on one of the fundamental principles of taxation on income: a tax agent (e.g., an employer) that provided income to individuals should withhold tax at the expense of such income. So, if the tax agent decides to pay income tax at his/her own expense, rather than to withhold it from revenue, then the appropriate amount of money (amounting to non-withheld tax) would be taxable and additional benefit and should be taxed by the income tax on general grounds.
The State Fiscal Service of Ukraine in its letter “On compensation of fuel cost for an employee” of 05.01.17, № 104/6/99-99-13-02-03-15 reported that compensation for an employee of fuel cost which used during execution of labour requirements should be the subject to 18% of the income tax and 1.5% of the war tax as an additional benefit on the basis of sub-para. “г” of sub-para.164.2.17 of the Tax Code of Ukraine (hereinafter − TCU). The amount of compensation is not accrual basis of the unified contribution (para.11 of sec. I of List of payment types carried out at the expense of employers on which the unified contribution for obligatory state social insurance should not be accrued, approved by the Government of 22.12.10, № 1170).
Other Taxes and Fees
The State Fiscal Service of Ukraine in its letter “On recognition of payment for the purchase of trade mark royalty” of 29.12.16, № 28477/6/99-99-15-02-02-15 reported: if the subject of intellectual property right (trade mark) to be transferred with transfer of ownership to it, while alienator loses the right to use and authorize or prohibit the use of the object of intellectual property third parties, then the payment for the transfer for tax purposes is not considered to be royalty (provided that confirmation of ownership rights to the object by corresponding certificate). In this case, payments for it are not taxed by the income tax of non-resident in accordance with sub-para. 141.4.2 of TCU.
The State Fiscal Service of Ukraine by its letter “On the procedure of filling in and submission of the Declaration of the excise tax if an entity has several points of sale of goods within one code COATSU (Classifier of objects of administrative and territorial system of Ukraine) of 13.01.17, № 506/6/99-99-15-03-03-15 informed how should report on the excise tax the excise goods retailers, who had several points of sale of goods in one or different administrative and territorial units (i.e., have one or different codes of COATSU), but these administrative units to be serviced by one controlling authority. Tax officers believe that these business entities should submit the declaration of excise tax, which form approved by the Ministry of Finance of Ukraine of 23.01.15, № 14 with the appropriate amount of Annex 6 (for every point of sale).
Accounting and Reporting
The Ministry of Finance of Ukraine by its order “On Amendments to certain legislative acts of accounting in the public sector” of 23.12.2016, № 1135 made amendments to certain NASPS (National Accounting Standards in Public Sector).
In particular, it is clarified in NASPS 124 “Incomes” that the incomes from exchange transactions include revenues from services (execution of works):
- payment for services provided by the budgetary institutions according to their main activity;
- revenues of budgetary institutions from additional (economic) activity.
Other incomes from exchange transactions, in particular, also include the revaluation surplus of assets within the amount of previous markdown from the restoration the usefulness of assets.
The markdown of assets is also included into the cost of exchange transactions in NASPS 135 “Expenses”.
Also, chart of accounts for bookkeeping in public sector, approved by the Ministry of Finance of 31.12.2013, № 1203, was added in account 04 “Contingent Assets” of class 0 “Off-balance sheet accounts” by the sub-account 043 “temporarily transferred assets”. It is kept on it the accounts by the managers of budgetary funds and State Purpose Funds of the property transferred to them from the executive authorities, which reorganized or liquidated, and placed in the temporarily occupied territory and/or in the territory of the antiterrorist operation.
The mention of business trip expenses was transferred from the accounts 80, 81 to account 84.
It is specified that the account of raw materials and supplies for capital construction is not kept on the sub-accounts 1517(1527) “Raw materials and supplies” and 518(1528) “Other production supplies”.
On account 18 “Other non-financial assets” it is provided information on low value items for special purposes that have a specific purpose and a limited short-term use in some areas.
The State Statistics Service of Ukraine on its official website reported about the changes in the submission of forms of state statistical observations to the state statistics agencies in 2017.
Thus, it was changed term/frequency of submission of certain forms of state statistical observations:
- 1-SD (science/defence) (quarterly) “Report on the scientific and technical works for military purposes” (order of 17.10.2016, № 196) – it was changed the submission frequency from “quarterly” to “annual”;
- 1-innovation (once every two years) “Survey of industrial enterprises innovation” (order of 13.09.2016, № 181) – it was changed the submission frequency from “annual” to “once every two years”;
- 3-trade (quarterly) “Report on the sale and stock of goods in the trading network” (order of 31.08.2016, № 163) - starting from the first quarter of 2017 – it was changed the submission frequency from “quarterly, annual” to “quarterly”.
It was cancelled forms of state statistical observations:
- 6-TP (es) (annual) “Report on the work of power plant” (order of 31.08.2016, № 162);
- 1-science (semi-annual) “Report on the scientific and technical works” (order of 05.09.2016, № 166);
- 12-trade (annual) “On the availability and use of the trade network in the markets and sale of agricultural products there” (order of 31.08.2016, № 161);
- 9-DS (annual) “Report on quantitative and qualitative composition of civil servants and local government officials” (order of 30.12.2016, № 265);
- 11 mtp (annual) “Report on results of use of fuel, heat and electricity” (order of 24.10.2016, № 202);
- 11-er (annual) “Report on consumption of fuel, heat and electricity” (order of 24.10.2016, № 202);
- 11 mtp (fuel) (annual) “Actual fuel consumption for certain products and activities” (order of 24.10.2016, № 202);
- 11 mtp (ver) (annual) “Formation and use of secondary energy resources” (order of 24.10.2016, № 202).
Also it is introduced the form of statistical observation:
- 11 mtp (annual) “Report on the supply and use of energy” (order of 31.08.2016, № 162), in which it is integrated separate figures of forms of statistics of Energy and Industry invalidated according to the orders of the State Statistics of 31.08.2016, № 162 and of 24.10.2016, № 202.
In 2017, the state statistical bodies in accordance with established periodicity:
1) conduct the state statistical observations in the following forms:
- 7-PV (once every four years) “Report on wages according to the professions of individual employees” (order of 25.08.2016, № 152);
- INN (once every two years) “Survey of innovation of the company for the period 2014–2016” (order of 25.11.2016, № 225);
2) do not conduct the state statistical observations in the following forms:
- 1-PV (working conditions) (once every two years) “Report on the working conditions, benefits and compensation for work in hazardous working conditions” (from 12.06.2015, № 149);
- 1-innovation (once every two years) “Survey of industrial enterprises of innovation activity” (from 13.09.2016, № 181).
Labor and Salaries
The President of Ukraine signed the Law of Ukraine “On Amendments to the Law of Ukraine “On higher education” about the employment of graduates” of 06.10.16, № 1662-VIII, according to which institutions of higher education (hereinafter − IHE) had no obligation to employ graduates. Now they are free to choose the place of employment, except when otherwise specified in the law.
Applicants, having concluded an agreement on working in rural areas or towns for at least three years, have the right to priority enrolment in medical and educational institutions for public order. The state also provides housing with heating and lightning for them free of charge.
The Ministry of Social Policy of Ukraine provided clarification of certain issues of payment for labour in compliance with the Law of Ukraine “On amendments to Certain Legislative acts of Ukraine” of 06.12.2016, № 1774-VIII. The main provisions are in the following.
- When the calculation of the salary of the employee for its minimal size it should not be taken into account additional payment for work in unfavorable working conditions and increased health, risks for night work and overtime, traveling nature of work, bonuses for holidays and anniversaries.
- In the case when there were established additional payments for work in hazardous working conditions, they should be paid over than the minimum wage (UAH 3 200).
- If the conditions of payment for labour provided for increasing in official salaries, for example, for work in institutions and organizations located in the populated areas that have the mountain status, for work in certain types of institutions, for work in hazardous and difficult working conditions, so the specified increasing should be taken into account of the minimum wage.
- If the employee performed monthly norm of labour and the accrued salary is lower than the legally established minimum wage, the employer is also obligated to make additional payment to its rate, which is payable monthly simultaneously with salary.
- If the employee did not perform monthly labour rate, he/she was on vacation, on sick leave, works part-time, etc., and the payment for his/her work to be conducted in proportion to the performed work rate.
- The idle hour through no fault of the employee should be paid according to the standards of Art. 113 of the Labor Code not lower than 2/3 of the tariff rate (salary) established for the employee without making additional payments to the minimum wage rate.
When implementation of summarized account of working hours with accounting month period, the work in excess of normal working hours for the accounting period should be paid as overtime and the specified payment should be over the minimum wage.
In case if work when summarized accounting of working hours to be done within the established working hours for the employee, which to be less than the normal hours, according to schedule of work, the salary for the employee should be accrued in the amount not less than the minimum wage.
It is recommended to use accounting periods as half-year period, a year for companies for which it is established the summarized accounting of working hours in order to reduce overtime work hours and impacts on the wages fund.
The authority of pensions and social security of system of Federation of Trade Unions of Ukraine on its official website announced that from January 1, 2017 it was established a new amount of monthly insurance payments to victims of accidents at work and occupational diseases, which amount was less than the minimum wage in terms of 100% disability, at the level of the minimum wage established by the law on December 1, 2016, taking into account the degree of disability.
Thus, from January 1, 2017 to those victims who have 100% disability, the amount of monthly insurance payment can not be less than the minimum wage as of December 1, 2016 (UAH 1 600). The victims, whose degree of disability is less than 100%, the minimum insurance payment should be determined with taking into account the minimum wage (UAH 1 600) proportionately with the degree of disability.
Currently, working bodies of the Social Insurance Fund of industrial accidents perform relevant calculations for victims in the workplace, which received miserable amount of such payments, receive them at a higher rate.
In addition, in 2017 it is renewed previously valid (by 2014) recalculation of amounts of monthly insurance payments to victims in the workplace, which should be done every year from March 1, according to the rate of growth of average wages in the country in the previous calendar year. After determining of the growth rate of average nominal wage in Ukraine by the State Statistics of Ukraine in 2016, it will be made the decision on the recalculation of monthly insurance payments as of March 1, 2017.
The State Fiscal Service of Ukraine in sub-categories 103.26 of “ZIR” system reported that, despite the fact that the minimum wage is the state social guarantees mandatory on all territory of Ukraine for enterprises of all forms of ownership and management, the controlling authorities have the right to control their accrual, deduction of the personal income tax (hereinafter − PIT) from its size.
Representatives of the fiscal department also reminded: according to p. 80.1 TCU, in the presence and/or receiving, in accordance with legislation, the information on the use of hired people without proper registration of employment and payment of incomes by the employers in the form of wages without payment of taxes to the budget, the controlling authority should carry out actual inspection without prior notice of taxpayer(s).
Control and Responsibility
The Social Insurance Fund for Temporary Disability (hereinafter – SIF for TD, Fund) in its letter “On correction of errors in the report in the form F4-SIF for TD” of 21.11.16, № 2.4-16-2037 reported: if in case of excessive accrual of sick pay, the insurer informed the authority of the Fund on the error detection and transferred sums of unduly accrued expenses prior to the inspection, the penalties should not be applied for the insured.
In addition, experts of the Fund explained the procedure for correction of errors in the report in the form F4-SIF for TD in case if the insurer adjusted (reduced) costs of the Fund and transferred means excessively received in full volume during the reporting period to the Fund. In this case, in Table I of the specified report in line 14 it should be noted the amount of means transferred to the Fund; in line 21− adjusted amount of costs at the expense of Fund (also it should be adjusted the corresponding lines of Table II). In line 6 of Table I it should be remained the amount of funds received from the Fund. In this case, the figures of lines 9 and 22 of Table I are to be matched together, and lines 10 and 23 – are not to be filled in.
The Cabinet of Ministers of Ukraine by its Resolution “On amendments in addition to the Resolution of the Cabinet of Ministers of Ukraine dated October 11, 2016, № 710” of 11.01.17, № 1 amended the regulations on the efficient use of public funds.
This regulatory act is brought into conformity with the Law of Ukraine “On civil service” of 10.12.2015, № 889-VIII.
In particular, the footnote “**” is excluded from para.18 of the annex to the mentioned Resolution, that ensures the implementation of the minimization of costs for business trips abroad regardless of the source of financing of such costs by the public authorities and other public bodies enterprises, institutions and organizations, established by the public authorities, which use the state budget funds.
The State Fiscal Service of Ukraine in sub-category 138.03 of “ZIR” system reported that continuing violations should be terminated, if the fact of the violations detected by the competent authority during inspections (e.g., lack of income and expenses accounting, for which it was established the mandatory form of accounting (accounting of results of business activity in accordance with requirements of current legislation), accounting of subjects to taxation, its keeping in violation of national regulations (standards) of accounting and other offenses related to the accrual of taxes, which can be established only during the documentary check on the basis of primary documents).
Penalties for the administrative violations should be imposed not later than two months from the date of detection (from the date of preparation and signing of the verification act).
The administrative violations of one-time include the following offenses: late submission of declarations, payments, audit reports, payment instructions for making payments to the budget and state target funds, submission of the unified social contribution (hereinafter − the Unified Contribution) etc.
In particular, the day of commission of the offense is the day following the last day of the deadline:
- submission of the income declaration;
- submission of the unified contribution report;
- submission of payment documents on payment of taxes and fees to the bank institutions;
- payment of the unified contribution etc.
The State Fiscal Service of Ukraine (hereinafter – SFSU) in its letter “On the organization of inspections in 2017” of 17.01.2017, № 1005/7/99-99-14-03-03-17 gave a brief overview of the changes relating to inspection of this year.
It should be reminded that SFSU did not extend the moratorium on inspections in 2017. So, there are changes emphasized by the representatives of fiscal department:
1. The decisions on the conducting of the documentary planned, actual and unscheduled inspections can be made not only by the head of SFSU but his deputy or authorized person as well.
2. It was increased the period from 15 to 90 days during which, while receiving a complaint from the buyer, the controlling authority should carry out the documentary inspection of the seller taking into account the requirements established by sub-para.78.1.9 of the Tax Code of Ukraine (hereinafter − TCU), to determine the reliability and completeness of accrual of tax liabilities by him/her under this transaction (para. 201.10 of TCU).
3. In case of non-admission of officials to the on-site documentary inspection, it should be immediately made an act in duplicate certifying the fact of refusal, with an indication of refusal reasons. One copy should be handed over to the taxpayer and/or his/her authorized person against the signature immediately after its preparation. Official of the taxpayer (his/her representative or the person who actually carries out settlement operations) has the right to provide his/her written explanations to the act compound by the controlling authority. In case of refusal to sign such an act, the officials of the controlling authority should make an act confirming the fact of refusal to obtain the act and/or providing written explanations to it (para. 81.2 of TCU).
4. It was clarified the procedure for calculating the terms for providing an objection on the act (certificate) on the audit results and copies of documents to it − from the next day following the day of receipt of the act (certificate), it was increased the term of their consideration from five days to seven working days, and the period to inform the controlling authority of the place and time of consideration of objections − from two to four working days before their consideration (para. 86.7 of TCU).
The State Fiscal Service of Ukraine by its letter “On the possibility of keeping by the taxpayers of documents exclusively in electronic form on accounting of incomes, expenditures and other indicators related to the definition of taxable items” of 04.01.17, № 30/6/99-99-15-02-02-15 explained: taxpayers, who carry out maintenance of the documents on accounting of incomes, expenditures and other indicators related to the definition of subjects to taxation (tax liability), primary documents, accounting registers, financial statements and other documents related to the calculation and payment of taxes and fees electronically, to be required to provide copies of documents that are subject to inspection to the officials of the controlling authority at their request during inspection.
This is substantiated by the fact that the electronic document prepared in accordance with the applicable law and which contains all the relevant information, has the same legal validity as a document in paper form.
However, in case of the preparation and storage of original documents, accounting registers using electronic means of information processing, the company is obliged at its own expense to make copies in hard copy at the request of other participants of economic transactions, as well as law enforcement authorities and relevant authorities within their powers, prescribed by the laws.
Copy of document in a hard copy for the electronic document is a visual representation of an electronic document on paper that is certified in the manner prescribed by the law.
The Ministry of Finance of Ukraine by its Order “On amendments to the Procedure for registration and budget liabilities of managers of budgetary funds and recipients of budget funds in the State Treasury Service of Ukraine” of 20.12.2016, № 1114 published in a new wording of para. 2.2 of the Procedure for registration of budget liabilities of managers of budgetary funds and recipients of budget funds in the State Treasury Service of Ukraine, approved by the Ministry of Finance of 02.03.2012, № 309.
It provides for that if the taking of budget liability under which it is used the procedure of procurement of goods, works and services, the manager of budgetary funds should submit documents to the Treasury authority taking into account legislation on public procurement within seven working days from the date of publication of the report on the procurement procedure if available in the accounting of the Treasury of the cost estimates (plan of budget funds) or within seven days from the date of registration by the Treasury of the estimate (plan of the use of budget funds).
The State Service of Ukraine on Labour Issues in its letter “On the provision of information” of 04.01.2017, № 54/4.1/4.1-ДП-17 pays attention to penalties provided by sec.2 of Art.265 of the Labour Code of Ukraine (hereinafter − the Labour Code).
In particular, according to para.3 of sec.2 of Art.265 of the Labour Code, violation of the terms of payment of wages to employees and other payments provided for by the labour legislation, more than one month, and their incomplete payment entail imposition of a fine of three times the minimum wage established by law at the time of detection of violations.
In case of violation of established terms of payment of wages to employees and other payments provided for by labour legislation regardless of the number of workers, which related to the violation, the duration of the violation and the number of violations, it should be applied penalty of three times the minimum wage established by the law at the time of detection of violations.
If it is detected the violation of minimum state guarantees to labour remuneration, then amount of the fine depends on the number of employees in respect of which there is a violation. If the violation applies to two employees, the amount of the fine will be 20 minimum wages (2 × 10).
When an employee refuses to receive the wage (fails to appear for its receipt, on conditions that the payment was carried out in cash all the time, and the employee was informed in the established order and did not address a statement on payment of wages through the banks or postal money order) in the workplace, the employer should deposit it in order established by the legislation. In this case, the employer fulfils his/her obligation to ensure the timely payment of wages.
Mobilization and ATO
The Verkhovna Rada of Ukraine adopted the Law of Ukraine “On Amendments to Certain Laws of Ukraine on pension provision of certain categories of persons from among the participants of the antiterrorist operation” of 18.10.16, № 1683-VIII, according to which military personnel and commanding officers and other ranks of the internal affairs, who took part in anti-terrorist operations, would be granted the retirement pensions in advance – by five years earlier. In other words, when men are at age of 55 and women – 50. On condition that length of pensionable service is not less than 25 years for men and at least 20 years − for women.
Controlled Transactions and Transfer Pricing
The State Fiscal Service of Ukraine in its letter “On the use of information sources for the purpose of transfer pricing” of 16.01.2017, № 517/Г/99-99-12-03-07-14 reported that under the provisions of Art. 39 of the Tax Code of Ukraine (hereinafter − TCU), controlling authorities did not determine the lists of sources of information to the requests of taxpayers, to be used by them to match the conditions of controlled transaction of “arm’s length” principle. Such circumstances can be clarified only by controlling authorities in the implementation of tax control measures for transfer pricing.
In accordance with paras.39.5.3.1 of TCU, the taxpayer and the controlling authority use information sources that contain information providing opportunity to compare commercial and financial terms of the transaction according to paragraphs. 39.2.2 of TCU, including:
- information on comparable controlled transaction of the taxpayer, and information on comparable transactions of its counterpart − the parties of controlled transaction with unrelated parties;
- any information sources that contain open information and provide information on comparable transaction and persons;
- other sources, the information from which to be received by the taxpayer in compliance with requirements of the law, and that provide information on comparable transactions and persons, on condition that the taxpayer provides such information to the controlling authority;
- information received by the controlling authority within international agreements concluded by Ukraine.
The TCU did not establish a separate procedure of the use of statistical data of the National Bank of Ukraine by the taxpayer, on interest rates on credit facilities when analyzing the compliance of controlled transactions of “arm’s length” principle.
However, paras.39.5.3 of TCU determined that controlling authority used the same sources of information as the taxpayer, if it was not proven that other sources of information provided the opportunity to receive a higher level of comparability of commercial transactions and financial conditions. In addition, the controlling authority should not use information that is not publicly accessible (in particular, information access to which is available only to public authorities), for tax purposes, for comparison of conditions of controlled transactions with the conditions of uncontrolled transactions.
Summary of Court Rulings
The Supreme Court of Ukraine in its decision of 14.12.2016, № 6-788цс16 formed legal position under which in accordance with content of Art.117 of the Labour Code (hereinafter − the Labour Code) in case of non-payment of sums owned by dismissed employee due to the fault of the owner or his/her authorized body within the deadline specified in Art. 116 of the Labour Code, in the absence of dispute about their size, the company should pay to the employee his/her average salary for all the delays on the day of actual payment. If there is dispute about the size of sums owned by the dismissed workers, the owner or his/her authorized body should pay specified compensation in case if the dispute resolved in favour of the employee.
Analysis of the given norms of substantive law gives reason to believe that non-payment to the employee of all sums owned by the dismissed worker from the owner or his/her authorized body is a continuing offense and therefore the worker can determine the final amount of his/her claims at the date of termination of such offence, which is the actual day of calculation.
The Other Things
The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to the Procedure for compensation of funds of the state or local budgets spent for the services of specialists training” of 14.12.16, № 1057 changed the algorithm for calculating of compensation for the second university degree. In particular, it is about a situation when a person, who has not completed the training under the public (regional) order, later decided to obtain the second university degree. In such cases, it is appropriate to compensate the cost of services. Government officials made amendments to the document regulating the procedure, including they introduced another calculating formula for compensation.
