Taxes
VAT
The Ministry of Finance of Ukraine by its “On Amendments to the Regulations on registration of payers of value added tax” of 17.03.17 No. 368 made Amendments to Regulation on the registration of payers of value added tax (hereinafter − VAT) in a part of registration of agricultural enterprise.
Thus, it was determined that agricultural enterprises, which as of January 1, 2017 were registered as subjects of special regime of VAT, are considered to be the tax payers of this tax on a general basis since January 1, 2017, and concerning the following agricultural enterprises:
- from January 1, 2017 extracts from the register of VAT payers issued by controlling authorities to January 1, 2017 become invalid;
- controlling authorities, where such agricultural enterprises are registered, decide and register into the Register of VAT payers the records of the withdrawal of registration of enterprises as subjects of a special tax regime with simultaneous registration of taxpayers in general terms.
Therefore, the provisions are brought into conformity with the norms of the TCU.
The Ministry of Finance of Ukraine in its letter “On the possibility of crediting of amounts of VAT reimbursement in the account of payment of monetary obligations or tax debt repayment from payments, the revenues of which are distributed in proportion to both the state and local budgets” of 21.04.17 No. 35130-12-10/11072 reported that one of the option of obtaining of VAT refund - its direction “…in the account of payment of monetary obligations or repay the tax debt of the taxpayer from other payments paid to the state budget” (Art. 200 of TCU).
Officials and VAT payers more than a year discuss about the correct interpretation of these words. In fact, a number of mandatory payments are distributed in a certain percentage terms between the state and local budgets. Currently, the Ministry of Finance took the floor: it believes that the VAT can be reimbursed only in account of taxes, which completely do into the state budget.
The State Fiscal Service of Ukraine in its letter “On the procedure of determining the tax base of VAT in the implementation by the VAT payer of transactions for the export of goods from the customs territory of Ukraine under the customs regime of export at a price lower than the purchase price of such goods” of 05.05.17 No. 87/6/99-99-15-03-02-15/ІПК provided an explanation how to determine the basis of taxation on value added tax (hereinafter − VAT) when exporting goods purchased at a price lower than the acquisition cost. Representatives of fiscal agency rejected the idea to impose such a difference a rate of 20%. And they explained that 0% rate should be used for total volume of supply.
The tax authorities made the conclusion taking into account the position of the judiciary. The latter insisted that the tax base should be determined by overall under transaction of the supply of goods, so the unified rate of 0% should be used to the export transactions. Before the court decisions of the content, the fiscal agency representatives demanded that exporters pay 20% of VAT from the exceeding amount.
The State Fiscal Service of Ukraine in its letter “On taxation of VAT transactions on return to the founder by the company of the value of part of the property previously made by him/her to the company’s share capital” of 10.05.17 No. 95/6/99-99-15-03-02-15/ІПК reminded to societies the rules of taxation of VAT transactions on return to the founder of property/value of the property previously made by him/her to the authorized capital of the company. VAT consequences depend on the form of payments of such founders:
- if the contribution to be returned in terms of funds that is it is compensateв the part of the cost of property in proportion to the share of the founder in the authorized capital, the transaction is not subject to taxation. In this case, para.196.1.1 of TCU works;
- when it is about the return of property, such transaction should be imposed by VAT under general rules − in this case, the mentioned rule is not applied.
The Ministry of Finance of Ukraine by its Order “On Approval of Amendments to Procedure for refund of money erroneously or excessively credited to the state and local budgets” of 06.04.17 No. 415 regulated the procedural aspects of the return from budget excessively or wrongly paid VAT amounts. In particular, the Ministry of finance complemented the procedure of refund of money erroneously or excessively credited to the state and local budgets by a new paragraph: “In case of return of overpaid tax liabilities for the value added tax credited to the budget from the account of taxpayer in the system of electronic administration of the value added tax in the manner determined in paragraph 2001.5 of Article 2001 of the Tax Code of Ukraine, such funds are to be returned exclusively to the account of the payer in the system of electronic administration of the value added tax, and in case of its absence at the date of application of the taxpayer with an application for repayment of overpaid tax liabilities for the value added tax or at the time of the actual refund − by transferring to the current account of the taxpayer in a banking institution”.
Thus, as we can see, the normative act has been brought into line with the norms of the Tax Code of Ukraine.
Corporate Income Tax
The State Fiscal Service of Ukraine in its letter “On reflection in tax accounting on the income tax of transactions for formation of provisions for payment of pension obligations on preferential terms of employed and unemployed staff and payments at the expense of provision previously created” of 24.04.17 No. 4/6/99-99-15-02-02-15/ІПК reported that the composition of tax expenses included actual payments that compensated after 01.01.15 at the expense of reserves and provisions for the payment of pension obligations on preferential terms of employed and unemployed workers (who earn preferential length of service in the company until they reach 60 years old) formed in accounting before that date. But in case if such expenses are not taken into account when calculating the tax object before 01.01.15. The basis for appropriate adjustments according to publicans is para.24 of sub-sec.4 of sec. XX of TCU (it is used by taxpayers regardless of whether they make tax adjustments under sec. III of TCU).
The Ministry of Finance of Ukraine in its letter “On the inclusion in the Register of nonprofit institutions and organizations of pension funds” of 20.04.17 No. 11210-09-10/10846 considered the inclusion of nongovernmental pension funds in the Register of nonprofit institutions and organizations. According to the Ministry of Finance, nongovernmental pension funds as non-profit organizations can be in the Register of nonprofit institutions and organizations to 01.07.17. The specialists note that a number of norms of specific legislation of nongovernmental pension funds requires coordination with tax and non-profit rules.
Therefore, it seems that further destiny of nongovernmental pension funds depends on whether or not the relevant legislative provisions to be coordinated on time, and whether the organization will keep in the constituent documents requirements of current tax and nonprofit law.
PIT and War Tax
The State Fiscal Service of Ukraine in its letter “On taxation by the income tax of the cost of housing, food, transportation of workers from gathering place to work and back in the case of work on a rotational basis” of 13.05.17 No. 174/6/99-99-13-02-03-15/ІПК considered the situation where the employer in the case of work on a rotational basis planned to provide to their employees the free housing rented to third parties, food (not associated with safety measures) and transportation services. It was explained on this occasion: for tax purposes the cost of such housing, food and services are included in the taxable income of the taxpayer as an additional benefit and taxed at personal income at a rate of 18%.
The State Fiscal Service of Ukraine in its letter “On taxation by the personal income tax of amounts of funds unduly spent that received by the taxpayer on a business trip, not returned within the prescribed period due to temporary disability” of 13.05.17 No. 175/5/99-99-13-02-03-16/ІПК noted: if an employee on the day of return from the trip was ill and did not have time to submit an advance report (usually during five days), the deadlines of the reporting period of temporary disability to be not extended. Because sub-para. “a” of sub-para. 170.9.2 of TCU does not provide for such transfers. Therefore, in this case, it is necessary to visit the sick employee, so he/she returned unused funds and issue advance report with his/her signature. This will allow the company to avoid a 25% penalty on the amount of funds for which it was not reported (Art. 1 of the Decree of the President of Ukraine “On the application of penalties for violation of norms of regulation of cash” of 12.06.95 No. 436/95), and the employee not to pay extra income tax.
Simplified Tax System
The State Fiscal Service of Ukraine in its letter “On tax rates of the payer of the unified tax” of 22.02.17 No. 3697/6/99-99-13-01-02-15 informed about the following: if the village, settlement, city council did not decide of establishment of appropriate rates of the unified tax by 15 July of the previous fiscal year, so the rates adopted for the previous budget period to be in force.
It should be recalled that the unified tax rates are to be established by the local councils in the following amount:
- for I group of the unified tax payers − to 10% of the subsistence minimum;
- for II group – to 20% of the minimum wage.
So, if local deputies failed in their duties and did not establish the unified tax rates by 15 July 2016, the entrepreneur can save on tax. For example, the unified tax payers of the second group can pay not UAH 640 (20% of the minimum wage on 01.01.17) but UAH 275.6 (last year’s amount). However, only after he/she got the individual tax advice of the same content.
Other Taxes and Fees
The State Fiscal Service of Ukraine in its letter “On approval of Amendments to the form of the Tax declaration of environmental tax” of 04.05.17 No. 11086/7/99-99-12-03-04-17 reported that the updated form of the declaration of environmental tax − in the wording of the Order of the Ministry of Finance of Ukraine of 28.12.16 No. 1177 − payers should apply from the report for the II quarter. But for the first quarter of 2017 it was necessary to submit a declaration on the old form.
It should be recalled that the changes related to Annex 4 “Calculation for the formation of radioactive waste (including those already accumulated)” to the declaration of the environmental tax. It is supplemented with lines 4.2.1.2.4, 4.2.2.2.4, 4.3.1.2.4, 4.3.2.2.4 called “adjusting factor”.
The operating organizations of nuclear installations (nuclear power plants), which are the payers of the environmental tax, should calculate the amount of tax liability for the generation of radioactive waste (including already accumulated) taking into account the adjusting factor. Depending on the activity of radioactive waste, it is 50 for high-level waste, 2 for medium-active and low-active waste.
Accounting and Reporting
The Ministry of Finance of Ukraine by its Order “On Approval of Amendments to Regulation on the documentary provision of records in the accounting” of 11.04.17 No. 427 amended the Regulation on the documentary provision of records in the accounting, approved by the Ministry of Finance of Ukraine of 24.05.95 No. 88.
In particular, it is complemented by the provision that allows reflecting the accounting expenses under the transaction under which supporting documents at the balance sheet date have not been received yet. Thus, if the rules of document management of a company provide for the possibility to reflect business transactions regarding which at the end of drafting accounting registers of accounting, it was not received from the contractor the original documents for the reporting period, the basis for the transfer of information about such business transactions to accounting registers is properly executed domestic primary document (act) compiled by the official responsible for the acceptance and delivery of inventory, works and services. However, business transactions provided in the inner primary document (act) are measured in the manner determined by Accounting Standards or IFRS.
Also in the month of receipt from contractor the primary document on the business transactions on information which in previous reporting periods transferred to accounting registers of accounting in accordance with the internal primary documents, it should be noted in accounting the information about such business transaction in the amount of adjusting for the difference amount between the valuation of such business transaction under internal primary document (Act) and primary document received from the counterparty.
In general, the document is brought into compliance with the amendments made this year to the Law of Ukraine “On Accounting and Financial Reporting in Ukraine” of 16.07.99 No. 996-XIV.
The State Fiscal Service of Ukraine in its letter “On retail sale of mobile phones, which were in use” of 16.05.17 No. 205/Б/99-99-14-05-01-14/ІПК reported that the current legal framework contained no exception regarding the possibility of non-use of cash register in case of trading technique that was previously in use. Thus, the unified tax payers – entrepreneurs should conduct payment transactions using cash registers transferred to the fiscal regime, when retail sale of mobile phones which were in use.
It should be recalled that norms of para. 296.10 of the Tax Code of Ukraine (hereinafter − TCU), which exempt employers – the unified tax payers of I-III groups from the obligation to apply cash registers on the condition of failure to reach the income level of UAH 1 million, are not applied to the cases of realization of technically complex household goods to be guarantee repaired.
The Ministry of Finance of Ukraine in its letter “On exchange rate differences and transactions for revaluation of fixed assets” of 19.02.16 No. 31-11410-07-16/4991 explained that the arrears of return to the foreign investor of foreign investment actually contributed in foreign currency is a monetary item. Thus, the company should count foreign exchange differences under it, as it is required by para.8 of Accounting Standards 21 “The Effect of Changes in Foreign Exchange Rates”.
However, the main financial department noted that exchange differences from the recalculation of the debt before the founder should be reflected in accounting according to the Accounting Standards or IFRS as an expense or income of the company.
The Ministry of Infrastructure of Ukraine by its letter “On the writing off of the fuel and lubricants by road transport of business entities” of 21.02.17 No. 1441/18/10-17 supported the requirements of the State Fiscal Service of Ukraine regarding the obligation to write off the costs of fuel and lubricants for road transport by all Business entities − regardless of departmental subordination, form of ownership or form of taxation on a single transparent system. Namely - with the application of the norms for the consumption of fuel and lubricants for road transport, approved by the order of the Ministry of Transport of Ukraine of 10.02.98 No. 43.
Control and Responsibility
The President of Ukraine signed the law of Ukraine “On amendments to some legislative acts of Ukraine regarding improvement of legislation on issues of the activities of institutions of health care” of 06.04.17, No. 2002-VIII, which provided for the introduction of measures to reform the health care system of Ukraine. In particular:
- there were specified peculiarities of the organizational and legal status of the health care establishments;
- there were set a simplified procedure for reorganization of health care establishments — the State and public institutions in the State-owned enterprises and communal non-profit enterprises;
- there were regulated peculiarities of the conclusion of labour contracts with managers of health care establishments;
- there were specified the possible sources of financing of health care provision by the health care establishments, including there were added possibility of financing the health care system at the expense of businesses and individuals;
- there were specified the existing guarantee that the money not used by health care establishments (except state and municipal institutions) in the current year would not be withdrawn and could be used by such a facility for financing its activities (including for upgrade material and technical basis). Non-use of money can not be grounds for reducing financing in the next budget period.
The approved law requires bringing into compliance with it other laws and regulations.
The President of Ukraine signed the Law of Ukraine “On amendments to certain legislative acts of Ukraine concerning the improvement of the conditions for conducting construction activities” of 13.04.17 No. 2020-VIII. This normative-legal act cancelled a separate procedure for obtaining by builders the technical specifications for fire safety for construction, which to be provided by the State Emergency Service of Ukraine.
The President of Ukraine by the Decree “On the decision of the National Security and Defense Council of Ukraine from April 28, 2017 “On special economic use of personal and other restrictive measures (sanctions)” of 15.05.17 No. 133/2017 enforced the decision of the National Security and Defense Council of Ukraine, which made a new list of economic entities of the aggressor country, to which the sanctions to be applied.
A manufacturer of “1C” software for accountants and its Ukrainian office is among the entities to which the sanctions applied. So now the accountants have to find alternative program.
At the same time Ukrainian representative of “1C” state that the use of software “1C:Enterprise” completely complies with current legislation of Ukraine. And software “1C:Enterprise” is fully functional, technical support is in normal mode, all information and methodological resources are available for use, and information-technology user support software “1C:Enterprise” is carried out.
Oleksandr Turchynov, NSDC Secretary of Ukraine, said that private entrepreneurs who use Russian software, in particular for accounting,”we can only recommend not doing this, but what concerns public institutions, they will be immediately transferred to the software of domestic producer”.
The Cabinet of Ministers of Ukraine by its Resolution “On certain aspects of the State Sanitary and Epidemiological Service” of 29.03.17 No. 348 annulled its own decision on the reorganization of the State Sanitary and Epidemiological Service, which was joined to the State Service of Ukraine for Food Safety and Consumer Protection. Instead, the State Sanitary and Epidemiological Service of Ukraine will be liquidated.
Its powers in the field of sanitary and epidemiological public wellness and control (supervision) over compliance with the sanitary requirements (in addition to the functions of the implementation of state policy in the field of epidemiological surveillance (observation) in the area of occupational health and function of the implementation of radiation control of workplaces and radiation doses of workers) will be assigned to the State Service of Ukraine for Food Safety and Consumer Protection.
The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to the Resolution of the Cabinet of Ministers of Ukraine dated September 8, 2016 No.593” of 18.05.17 No. 339 involved our state to the world’s anti-corruption movement. Thus, Ukraine will join the Global Register of beneficial owners. In other words, information from the Unified State Register of Legal Entities and individuals − entrepreneurs and community groups about the beneficial owners will be transmitted in this Register.
The Cabinet of Ministers of Ukraine by its Resolution “On organization of certification of people applying for joining the civil service on their proficiency the national language” of 26.04.17 No. 301 determined the procedure of proficiency Ukrainian language examination of people wishing to work in the civil service. It should be recalled that the civil servant is obliged to use the official language while performing his/her duties, to prevent discrimination against the national language and counteract possible attempts of its discrimination.
An authorized institution of higher education is entitled to organize and conduct such certification. The list of such establishments is published on their official websites and on the websites of the National Agency of Ukraine on Civil Service and the Ministry of Education and Science of Ukraine.
Knowledge of Ukrainian language will be tested by the relevant commissions created by such universities.
Attestation will be carried out in writing or orally. Attestation in oral includes business conversation under the defined scenario and message presentation on topic specified by the Commission. In writing – a test task and text narration on professional issues in written.
People applying for joining the civil service after passing the test receive the appropriate certificates.
The State Fiscal Service of Ukraine in its letter “On the effective date of the Resolution of the Cabinet of Ministers of Ukraine dated March 29, 2017 No. 195” of 26.04.17 No. 10382/7/99-99-15-02-01-17 focused attention on changes relating registry of non-profit institutions and organizations. In particular, on the period of bringing of statutory documents of non-profit organizations into conformity with requirements of the Tax Code of Ukraine (hereinafter − TCU) and submitting of copies of these documents to the controlling authority. Thus, the SFSU explains: non-profit organizations that did not bring their statutory documents into conformity and did not provide copies to their controlling authority would be excluded from the Register of non-profit organizations after July 1, 2017, and religious organizations − after January 1, 2018.
The State Fiscal Service of Ukraine in the subcategory 101.27 of the “ZIR” system reported that in the event of errors in the mandatory details of the tax invoice provided for in paragraph 201.1 of the Tax Code of Ukraine (hereinafter – TCU), the controlling authority upon the buyer’s request should conduct documentary verification and according its results on the basis of the audit certificate should prepare tax notice-decision, according to which a fine of UAH 170 is imposed and which commits to correct such errors.
Failure to comply with the tax notice − the decision of the supervisory authority with a warning about the need to correct by the taxpayer-seller errors specified in sec.1 of para. 1201.3 of TCU within 10 calendar days following the day of its receipt entails the imposition on such a taxpayer of a fine in the amount of 10 to 100% of the VAT amount specified in the tax invoice, depending on the number of days of delay in non-rectification of errors.
The Ministry of Finance of Ukraine in its letter “On the adjustment of the financial result before taxation to the amount of penal (financial) sanctions and penalties that are transferred in favour of an individual entrepreneur and bodies of the SFS” of 10.04.17 No. 11210-09-10/9617 reported that the payers of the corporate income tax that accrue fines, penalties, fees in accordance with civil law and civil contracts in favour of individuals − entrepreneurs on a simplified taxation system, should increase the financial result before taxation in accordance with subpar. 140.5.11 of TCU for the amount of such recognized sanctions. This requirement applies only to those earners who determine tax differences according to para. ІІІ of TCU.
It should be recalled that mentioned tax rate brings out such penal sanctions recognized in favour of individual from magnifying adjustment. And the controllers noted in letter No. 4486/6/99-99-15-02-02-15 of 03.03.17 that this exception also applies to entrepreneurs. However, as we see, the employees of the Ministry of Finance are against such a loyal interpretation of the stated tax rate.
So, in their opinion, according to this provision, only individuals who are payers of personal income tax can be an exception. The mentioned is justified by the introduction in the TCU of a unified rate of 1% for taxation both on corporate income tax and on income tax for individuals.
In this regard, the Ministry of Finance of Ukraine actually instructed the tax authorities to make appropriate changes to their explanation, mentioned above.
The State Fiscal Service of Ukraine by its Order “On approval of the Procedure of organization of work of authorities of Revenues and Duties on provision of individual tax consultations” of 25.04.17 No. 293 introduced new rules of provision of individual tax consultations. Representatives of the fiscal agency developed a document that determines the interaction between structural units of SFSU, General Directorate of SFSU and Information Department of SFSU when considering taxpayers’ requests for obtaining of the individual tax consultations.
The most important thing here is the normalization of decision-making of information about individual tax consultation to the Unified Register of individual tax consultations, because their registration in this register is a requirement of the TCU.
Thus, a structural unit of the SFSU, defined as the main executor, after receipt of such individual tax consultation and appendices to it within 10 days following the day of receipt, but not later than 35 days following the day of receipt of the respective appeal, should make decision on the introduction or refusal in entering information about individual tax consultation in the Unified register of individual tax consultations.
If individual tax consultation is not registered in the unified base of individual tax consultations, it does not allow taxpayers to avoid bringing to responsibility, including financial (fines and/or penalties) for acts committed under the individual tax consultation (para. 53.1 of the TCU).
Labor and Salaries
The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to the Regulations of the Pension Fund of Ukraine” of 11.05.17 No. 311 amended the Regulations on the Pension Fund of Ukraine approved by the Cabinet of Ministers of 23.07.14 No. 280.
Amendments are intended to bring these provisions into conformity with the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine” of 06.12.16 No. 1774-VIII in part of expansion of needs of using information from the State Register of compulsory state social insurance.
Consequently, this decision provides that the Pension Fund of Ukraine organizes exchange of information, which contains elements of the use of employment of unformed workers and violations of labor legislation, with the State Service of Ukraine on Labor and the Ministry of Finance of Ukraine.
The Cabinet of Ministers of Ukraine by its Resolution “On amendments to some regulations of the Cabinet of Ministers of Ukraine” of 18.05.17 No. 335 brought into line acts of the Cabinet of Ministers which regulates the establishment of salaries, bonuses, rewards and other benefits for employees of institutions and public sector organizations, governmental agencies and other bodies with current legislation. In particular, now their size is tied to the minimum subsistence level for able-bodied persons, established on January 1 of the calendar year (UAH 1 600). Earlier appropriate calculation was carried out in relation to the minimum wage.
It should be recalled that from January 1, 2017 the minimum wage is no longer used as an estimated value to determine the salaries and wages of workers.
The Ministry of Social Policy of Ukraine in its letter “On determination of salaries” of 17.03.17 No. 741/0/101-17/282 expressed the position that it should be established the fixed amount of salary (wage rate) in the staffing schedule.
According to Art.6 of the Law of Ukraine “On Labor Remuneration” of 24.03.95 No. 108/95-ВР the scheme of fixed official salary (wage rates) is to be formed, in particular, on the basis of inter-positioning size ratios of tariff rates (salaries). The Ministry notes that these ratios of rates or salary are to be established in the collective agreement or other document of the company depending on the complexity of works, organizational and legal level of an employee position and other working conditions. In this case, these ratios can be set in a certain range of rates (salaries).
The actual salary within the range should be set for the employee on the results of certification.
Thus, the range of rates with the minimum and maximum salary is advisable to give in the scheme of fixed official salary, but the fixed amount of salary should get into stuffing schedule.
The Social Insurance Fund for Temporary Disability (hereinafter – SIF for TD) in the annex to the letter of the Executive Directorate of the SIF for TD of 27.04.17 No. 2.4-38-740 reminds that if a woman has insurance experience less than 6 months, the average salary for calculating the aid maternity benefit should be based on accrued salary, but per month:
- not exceeding double minimum wage,
- not less than the minimum wage established by law in the month of the insured event (para. 4 of Art. 19 of the Law of Ukraine “On Compulsory State Social Insurance” of 23.09.99 No. 1105-XIV).
The average wage of the amount of minimal and double minimal should be determined by dividing these figures on the average number of calendar days 30.44. Further it is necessary to compare the average daily wage calculated from the minimum from the daily average actual. If the average daily minimum wage exceeds the actual average daily one, calculation of maternity benefit should be carried out with the average daily minimum at the primary employment. If the actual average daily salary is higher than the minimum average daily, then the actual average daily should be compared with daily average, calculated by doubling amount of minimal wage. In order to calculate the aid it is necessary to choose a lower rate.
The Ministry of Social Policy of Ukraine in its letter “On the inclusion of remuneration based on the results of the work for the year in calculating the average salary for 2 months” of 20.04.17 No. 1225/0/101-17/282 explained: if a single remuneration (premium) based on the results of the work for 2016 was paid in January 2017, then in 2017 it would be taken into account when calculating the average salary for the last two months, adding to the earnings of each month of the calculation period 1/12 of this remuneration.
The Ministry of Social Policy of Ukraine in its letter “On changing essential working conditions” of 13.04.17 No. 159/0/22-17 reported that the reduction in product sales could not be considered as a change in the organization of production and labor. Therefore, there are no any reasons to change essential working conditions and then dismiss an employee under para.6 of Art.36 of the Labor Code in case of the decline in sales.
At the same time the ministry recognizes that the reduction in sales can lead to rationalization of working places (here, probably, representatives of the Ministry of Social Policy mean the introduction of part-time work, coordinate, etc.). According to the social agencies, this can be considered as change of essential working conditions.
It should be recalled that under para.6 of Art.36 of the Labor Code, an employee can be fired in case of refusal to continue work due to changes in essential working conditions. It should be given two months note about the change of essential working conditions, including wage change, mode of operation, etc. (Art.32 of Labor Code). However, essential working conditions can be changed only in connection with changes in organization of production and labor.
The Ministry of Social Policy of Ukraine by its Order “On recognition as not applicable in the territory of Ukraine of some regulations of USSR” of 10.04.17 No. 592 canceled 122 normative legal acts of the USSR concerning labor protection. Mainly it is safety regulations by certain types of work. Such a move is due to the need to update the regulations governing activities in the field of labor.
Mobilization and ATO
The President of Ukraine on its official website reported that monetary compensation for ATO soldiers was increased by 50%, and the family would receive more than UAH 1.2 million from the state if the soldier was killed directly in a battle. Also, the compensation in case of disability of I group category will be increased from UAH 400 thousands to UAH 640 thousands.
Also, the President of Ukraine signed the Law “On amendments to Certain Laws of Ukraine on improving the level of social protection of servicemen and their families” and the Law “On Amendments to Article 15 of the Law of Ukraine” On the status of war veterans, guarantees of their social protection” on the provision of benefits excluding the average total family income to family members of victims”.
The Ministry of Defense of Ukraine in its letter “On the personal accounting of conscripts and obligated for military service” of 31.03.2017 No. 116/9/5/2807 reminded that enterprises, institutions and organizations, which employ conscripts and liable for military service, within five days after receiving documents regarding changes in their marital status, place of residence (stay), education, jobs and positions should submit the following information to the personal cards of such employees and send the notice about changing of accounting data to the district (city) military commissariat at the place of registration to the 5th day of each month.
Financial Markets
The National Bank of Ukraine by its Resolution “On amendments to some legislative acts of the National Bank of Ukraine” of 25.05.17 No. 41 allowed to buy and transfer foreign currency abroad to return funds received by foreign investors for transactions on sale of securities, corporate rights funds received as a result of reduction of the share capital of legal entities, withdrawal from state enterprises of foreign investors.
However, the National Bank allowed buying and transferring foreign currency in this case only in case of simultaneous abidance of the following conditions:
- a resident (the buyer of securities/corporate rights; legal entity, the authorized capital of which to be reduced/ from which comes participant − a foreign investor; intermediary (agent, attorney) or foreign investors; carries out purchase/transfer of foreign exchange;
- purchase/transfer of foreign currency for this purpose during a calendar month within the total amount of not more than 5 million of US dollars (equivalent in another foreign currency at the official rate set by the National Bank on the date of the transaction);
- purchase/transfer of foreign currency for this purpose is through one authorized bank (the choice of this person that returns investment).
These changes will take effect on June 12, 2017.
The National Bank of Ukraine by its Resolution “On amendments to some legislative acts of the National Bank of Ukraine” of 25.05.17 No. 41 cancelled a temporary rule that reduced the maximum period for settlements of exports and imports of goods to 120 days.
Consequently, now the maximum term of payments will be 180 days. Because, this term is enshrined in Art.1-2 of the Law of Ukraine “On the order of payments in foreign currency” of 23.06.94 No.185/94-ВР.
Controlled Transactions and Transfer Pricing
The State Fiscal Service of Ukraine in its letter “On recognition of business transactions under commission contracts as controlled” of 26.04.17 No. 9014/6/99-99-15-02-02-15 informs if the sale of goods on the terms of the commission does not include transition of ownership of such goods from commissioner-resident to the buyer-non-resident, these operations do not fall under the definition of controlled. However, sale transaction of goods between commitment-resident and buyer-non-resident fall under the definition of controlled (if criteria achieved, established by sub-para.39.2.1.7 of TCU) in case when:
- the buyer-non-resident is a related party of commitment-resident;
- or the country of residence of the buyer-non-resident was included in the “offshore” government list.
The Ministry of Finance of Ukraine by its order “On approving the Procedure for conducting an audit on the compliance of the payer of taxes with the “arm’s length” principle of 30.03.2017 No. 399 approved the relevant document.
According to the Procedure for conducting an audit of compliance with the principle of “arm’s length”, the decision period has been extended from 7 to 15 working days.
The notice of the month and the time of the examination of the objections to the act on the results of the audit should be transmitted to the taxpayer not later than the next working day from the date of receipt of the objection, but not later than four working days prior to the day of their consideration. Previously the maximum term was two days.
The verification of a taxpayer on the completeness of the accrual and payment of taxes when the conduction of controlled transactions for the reporting periods of 2013 and 2014 should be conducted in accordance with the provisions of Ch.8 of sec. II of TCU taking into account the peculiarities specified in Art.39 of TCU.
Public Procurement
The Ministry of Economic Development and Trade of Ukraine on its official website recommends participants of state tenders to use the finalized service “Electronic payer’s office” for obtaining a certificate on the absence of debt. Using an electronic digital signature (hereinafter − EDS), the user can send an application for a certificate in electronic form, which will be signed by the EDS of the officials of the relevant controlling authority.
The state customers, as well as any interested bodies, may review the certificates issued to payers in the open part of the payer's electronic office, which is accessed without user identification. It is possible to find the certificate by the parameters “Individual tax number”, “Reference number” or “Certificate date”.
We remind that in accordance with Part 2 of Art. 16 of the Law of Ukraine “On Public Procurements” of 25.12.15 No. 922-VIII customer can refuse the purchase party and reject his/her tender offer, if the participant is in arrears in the payment of taxes and fees (compulsory payments).
The Other Things
The Cabinet of Ministers of Ukraine delegated the functions of the State Service of Intellectual Property to the Ministry of Economic Development and Trade of Ukraine on the issuance of protective documents (patents, certificates) on intellectual property. This is stated on the government portal.
This Government’s decision is another step toward creation of the National Authority of intellectual property − a unified central authority that will issue patents (certificates) on “one window” principle. Establishment of such authority requires consistent reformation of sphere of intellectual property, including gradual institutional restructuring of the national system of intellectual property protection.
The Cabinet of Ministers of Ukraine by its Resolution of 17.05.2017, No. 338 approved the Agreement on reciprocal travels of citizens of Ukraine and Turkey by internal passports (ID cards). This is reported on the Government portal.
Consequently, citizens of Ukraine and citizens of Turkey who use passports in the form of cards (ID) with a contactless electronic media can enter, leave, as well as transit and stay without a visa in the territory of Turkey and Ukraine respectively up to 90 days within 180 days.
