Legislation Overview (May 2018)

Taxes

VAT

The State Fiscal Service of Ukraine in its letter “On the Application of Departmental Classifiers of Information on State Customs Matters Used in the Process of Issuing Customs Declarations” of 10.05.18, No. 13813/7/799-99-19-01-01-17 clarified the peculiarities of the registration of customs declarations (hereinafter - CD) in case of receipt of installment of payment of import VAT. These include, in particular, explanations regarding the Procedure for granting the deferral of value added tax and the application of enforcement of obligations for importation into Ukraine’s customs territory of equipment for own production in the territory of Ukraine, approved by the Resolution of the Cabinet of Ministers of Ukraine dated 02.07.18, No. 85.

According to the representatives of the fiscal department, when filling in the lines 47 of CD, it should be used the following codes of the method of calculation:

• for the total accrued amount of value added tax (VAT) – “71”;
• for the total deferred amount of VAT – “92”;
• for the guarantee amount of VAT, for which a financial guarantee is given in the form of a document – “31”;
• for the monthly deductible amount of VAT payable in cashless form – “01”;
• for the amount of VAT determined as the difference between the total VAT accrued (“71”) and the total installment amount of the VAT (“92”) and payable in the non-cash form - “01”;
• for the amount of VAT paid on a declaration completed in the usual manner, and an additional CD – “70”.

When submitting the CD with the payment of the first installment payment from VAT, information on accruing of VAT amounts in the line 47 of CD should be reflected in separate lines, namely:

• total amount of VAT to be paid - by the code of calculation method “71”;
• total deferred VAT amount - by the code of calculation method “92”;
• monthly deferred VAT payment amount - by the code of the method of calculation “01” and (if any) the amount of VAT, which is defined as the difference between the total VAT accrued (“71”) and the total deferred VAT amount - by the code of calculation method “01”;
• guarantee amount of VAT, for which it is given a financial guarantee in the form of a document - by the code of calculation method “31”.

When the next monthly submission of additional CDs with payment of the deferred amount of VAT, the filling in of the declaration line is carried out taking into account the following nuances:

• in section 40 of the CD, it should be indicated the data on the MD with the payment of the first installment of VAT payment and (further on) additional MDs, for which the monthly installments of VAT were paid;
• in line 47 of the CD, information about accruing amounts of VAT to be reflected in separate lines, namely:
• the total amount of VAT accrued - by the code of calculation method “71”;
• the total deferred VAT amount - by the code of calculation method “92”;
• the amount of VAT paid under the CDs, completed in the usual manner, and additional CDs (paid monthly installments of VAT and, if any, the VAT amount determined as the difference between the total VAT amount accrued and the total installment VAT amount) - for code of calculation method “70”;
• monthly installment VAT amount - by the code of calculation method “01”;
• guarantee amount, for which it is given a financial guarantee in the form of a document - by the code of calculation method “31”.

When submitting the CD with the payment of the first installment of VAT payment, and when the next monthly submission of additional CDs (except for the last one), the following to be filled in:

1) line 52 of CD:

• in the left section - the guarantee amount of the VAT, which corresponds to the guarantee amount of the VAT indicated in the line 47 of the CD by the code of the calculation method “31’;
• in the right section of the line - the guarantee code “01”;

2) line 48 of CD - the deadline for payment of monetary obligations in accordance with the terms of installment payment of VAT (the term of validity of the guarantee);

3) line “D/J” - is the deadline for submission of the next additional declaration equal to the payment period of the next installment of the monthly deferred tax amount established in the decision.

Classifier of calculation methods, approved by the order of the Ministry of Finance of Ukraine dated September 20, 2012, No. 1011, establishes the codes of documents used in the registration of MDs with the granting of installments of VAT payment:

• for a decision on installment of a monetary obligation – “8034”;
• for a financial guarantee in the form of a document of the banking institution – “9306”.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Procedure for VAT Taxation” of 07.05.18, No. 2035/6/99-99-15-03-02-15/ІПК considered the procedure for imposing VAT on transactions for the compulsory sale of property. Recommendations of representatives of the fiscal department differ from the previous ones and deprive buyers of the right to a tax credit for the acquired property.

In particular, the controllers said: in the course of the transaction to supply the arrested property of the debtor - owner of the property, there is an obligation to determine the tax liability on VAT, based on the VAT base established in accordance with para.188.1 of the TCU, and to draw up and register a tax invoice for winner of electronic auction in the URTI.

Also, according to representatives of the fiscal department, the buyer has no legal grounds for assigning VAT amounts to a tax credit for such a tax invoice. Taxpayers are motivated by a negative conclusion that the winner of the bidding does not pay for the property purchased directly to the taxpayer as the supplier and owner of such property.

The representatives of the fiscal department reported in their advice that upon receipt of the guarantee payment from the auction participant, the auction organizer does not accrue VAT and does not prepare a tax invoice. However, the transaction of the organizer-VAT payer in the provision of services for the organization and conduction of electronic auctions (including procedures for the sale of the arrested property), the winner of the electronic bidding is subject to VAT in a generally established order at a rate of 20%. When carrying out such a transaction, the bidder is required to determine the VAT liability, based on the amount of commission remuneration, and to prepare and register a tax invoice for the winner of electronic auctions in the URTI.

The State Fiscal Service of Ukraine introduced a new service for VAT payers - visualization of full information on the tax invoices, taking into account all the adjustment calculations of quantitative and cost indicators registered in it. This is reported on the website of the SFSU.

The new service was created to ensure that taxpayers did not make mistakes when making adjustment calculation to the tax invoice.

Access to the information is provided in the private section (personal cabinet) of the Electronic cabinet in the section “URTI”. According to the parameters of the search for a tax invoice, it is reflected the final calculation taking into account all subsequent adjustment calculation registered in it, under the following parameters:

• “Registration Number”;
• “Document Characteristic (ПН-0, РК-1)”;
• “Document Number”;
• “Date of drafting”;
• “Reason for the adjustment (PK)”;
• “Number of TI line (number of adjusted ПН line);
• “Line number in xml file”;
• “Volumes of delivery without VAT”;
• “Quantity (ПН, gr. 6)”;
• “Price (ПН, gr.7)”;
• “Change in quantity (PK, gr.7)”;
• “Price indicated in gr. 8 PK”;
• “Price change (PK, gr. 9”;
• “Number indicated in gr. 10 РК”;
• “Code of goods according to UCC FEA (ПН/РK)”;
• “Code of service according to DKPP (ПН/РK)”;
• “Characteristic of Imported Goods (ПН/РK)”;
• “Rate code (ПН/РK)”;
• “Unit of measurement code (ПН/РK)”;
• “Name of unit of measurement”;
• “Consolidated ПН/РK to consolidated ПН”;
• “Reason for not being given to the recipient”;
• “Description of the product/services”.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the list of payments, on account of payment of monetary obligations or tax debt, a taxpayer may claim a budget reimbursement from VAT” of 24.04.18, No. 1839/6/99-99-12-02-01-15/ІПК reported that the taxpayer can pay his/her obligations or pay tax debts at the expense of the budget reimbursement of VAT (paragraph “в” para. 87.1 of the Tax Code of Ukraine). However, such an opportunity is foreseen only in respect of taxes that fall in full to the state budget. If, in accordance with the norms of the Budget Code of Ukraine, all state payments are distributed between the state and local budgets, the use of budget reimbursement of VAT in this case is not allowed.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Value Added Tax” of 16.04.18, No.1584/ІПК/26-15-12-01-18 clarified the tax consequences to be expected by a company when transfer of property to the state according to the court decision.

The transaction on the transfer of property has a chance to be exempted from VAT in accordance with para.197.1.16 of TCU. However, the following requirements should be fulfilled simultaneously:

• transfer must be made on free of charge basis;
• transaction must take place between two VAT payers or between two legal entities;
• property must be transferred exclusively to state or communal property;
• transaction must be carried out on the basis of the decision of the Government, central and local executive authorities, and local self-government bodies.

Controllers emphasize: in case of failure to comply with at least one of the above requirements such transaction is subject to VAT in the general order at a rate of 20%.

As for tax-profit consequences, representatives of the fiscal department make an advice to focus on accounting rules.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the procedure for VAT taxation” of 27.04.18, No. 1924/6/99-99-15-03-02-15/ІПК informed that the basis for reflection of a tax credit was a registered tax invoice in the URTI (para. 198.6 of the Tax Code of Ukraine).

If in column 7 “Delivery price of a unit of a product/service without value added tax” of the registered invoice, the amount is indicated with more than two signs after a comma - such an invoice is the basis for the formation of a tax credit. Since the Procedure for filling in the tax invoice, approved by the order of the Ministry of Finance of Ukraine dated 31.12.15, No. 1307, there are no restrictions on the reflection of the supply price.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Application of Penalties for Late Registration of Tax Invoices in the URTI” of 02.05.18, No. 1963/6/99-99-12-02-01-15/ІПК insists on the imposition of a penalty for the late registration of the adjustment calculation, although it happened not because of the VAT payer.

The situation is as follows: in October 2017 the VAT payer made a tax invoice, but its registration in the URTI was stopped. In December 2017, adjustment calculation to this tax invoice was made on the basis of an additional agreement to the supply contract. Difficulties in registering the adjustment calculation occurred due to the fact that the date on which it was drawn up, the tax invoice remained blocked. After its unblocking the payer managed to include it in the URTI and adjustment calculation, however, the VAT payer was fined for late registration of the adjustment calculation on the basis of para.120-1 of TCU.

This approach was supported by the SFSU. Although judges were repeatedly on the side of VAT payers in similar situations. They opposed punitive sanctions if the registration document was delayed not by the fault of the payer.

Corporate Income Tax

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Taxation of Income under Exchange Agreement” of 02.05.18, No. 1971/6/99-99-13-02-03-15/ІПК explained: if the party of the property exchange agreement was a legal entity or individual entrepreneur, such person was the tax agent of the taxpayer on accrual, deduction and payment (transferring) to the budget of the income tax received by the taxpayer from such exchange (para.172.7 of the Tax Code of Ukraine, hereinafter - TCU).

Representatives of the fiscal department also remind that the income that the taxpayer receives from the sale or exchange of the property no more than once during the year, subject to the presence of such property owned by the taxpayer for more than three years, is not to be taxed (para.172.1 of TCU). However, the condition regarding the possession of such property owned by the taxpayer for more than three years does not apply to property received by such a taxpayer inherited.

Consequently, if an individual exchanges real estate with a legal entity (or entrepreneur), the last, in the case of income of individuals from such a transaction are obliged to deduct the income tax and transfer it to the budget, as well as to reflect the income from the exchange of property in Form No. 1DF with a sign of income “104”.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Taxation of the Company Income Tax of Sales Transactions or Other Alienation of Non-Residents of Corporate Rights, Expressed in Other Than Securities, Form” of 19.04.18, No. 1721/6/99-99-15-02-02-15/ІПК reported that a resident, when paying in favour of a non-resident, the proceeded from the sale of transactions or other alienation of corporate rights, should keep the tax at a rate of 15%, unless otherwise established by the rules of the international agreement.

The income of a non-resident is to be calculated according to the accounting rules.

Representatives of the fiscal department emphasized that the list of documents on the basis of which foreign investors are being returned to foreign investors, as well as income, profits, and other funds received by a foreign investor from investment activity in Ukraine, is defined in para.2 of Chap. 3 of Section II of the Regulation on the procedure and terms of trade in foreign currency, approved by the decision of the NBU Board dated August 10, 2005, No. 281.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Payment by a Resident of Tax from a Non-Resident Income” of 20.04.18, No. 1752/6/99-99-15-02-02-15/ІПК recalled that the repatriation tax to be paid to the budget during the payment of income to a non-resident.

The date of accrual of income to a non-resident in accounting does not affect the payment of repatriation tax. This tax must be transferred to the budget no later than the date of payment of income to a foreign counterparty.

At the same time, non-accruing, non-withholding and/or non-payment (non-transfer) of the tax before or during the payment of income in favour of another payer - is threatened with a fine of 25% of the amount of tax to be paid to the budget.

For repeated violation of such violation within 1095 days - the fine will amount to 50% of the tax amount.

Violation of this requirement for the third time or more is threatened with a sanction of 75% of the taxable amount, which is subject to accrual and/or payment to the budget.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Application of Tax Differences in the Case of Transfer to an International Non-Governmental Organization of Membership Fees” of 18.04.18, No. 1691/ІПК/28-10-01-03-11 reported that the membership fees transferred to the international a non-governmental organization as a cash deposit for membership in the specified organization, is not irreversible financial assistance. So, it is not required to adjust the financial result before tax in accordance with para.140.5.10 of TCU.

It should be noted that this clarification relates to a particular payer and the situation with the tax adjustments in the payment of membership fees to non-profit organization is rather delicate. Representatives of the fiscal department also had other explanations on this subject with opposing conclusions. Therefore, it should not be blindly followed this consultation, but analyze each particular situation separately or apply to the tax authorities for explanations.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the adjustment of the financial result before tax on the amount of debt taking into account the established inflation index for the entire time of delay of the economic obligation and 3% per annum from the overdue amount” of 25.04.18, No. 1864/6/99-99-15-02-02-15/ІПК reminded that the debtor, who delayed the fulfillment of the obligation, should pay the debt amount to the creditor, taking into account the established inflation index for the entire time of delay, as well as 3% per annum from the overdue amount, unless another interest rate was established by the contract or by law (para.2 of Art. 625 of the Civil Code of Ukraine).

Consequently, such transactions should be reflected in the tax accounting according to accounting rules since the Tax Code of Ukraine (hereinafter - TCU) does not provide for differences in inflation amounts. If fines are transferred in favor of non-profits or payers of the income tax using 0% rate, then it should be applied the expanding difference under para.140.5.11 of TCU.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Adjusting the Financial Results before Taxation on the Amount of the Impairment of Immovable Real Estate” of 02.05.18, No. 1960/6/99-99-15-02-02-15/ІПК informed payers of the income tax making tax adjustments under sec.III of TCU, that, in the case of sale of investment property, accounted at fair value  (depreciation and impairment are not recognized), adjustments to the financial result before tax under para. 138.1, 138.2 of TCU should not be conducted. The result of the sale of such assets is determined in accordance with the rules of accounting and reflected in the financial result before tax without adjustments. Starting from 01.01.17 adjustment to the financial result before taxation is not carried out on the sum of impairment and revaluation of investment property.

If an investment property is accounted at initial cost, then all tax adjustments provided for fixed assets by paras.138.1, 138.2 of TCU are applied to it.

PIT and War Tax

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Taxation of a Different Kind of Income” of 05.05.18, No. 2021/6/99-99-13-02-03-15/ІПК reported: if according to the court decision, the amount of material assistance was collected from the company for the benefit of a former employee, such amount to be the income of an individual. The tax agent must include this income in the general taxable income of the payer as a different income (paras.164.2.20 of the Tax Code of Ukraine) and tax it on a general basis.

Therefore, the company that pays income as material assistance to the former employee must pay the income tax and the war tax to the budget and reflect the amount of income in the form No. 1DF.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Taxation of Income Received by an Individual in the form of a Gift from a Legal Entity” of 03.05.18, No. 1974/6/99-99-13-02-03-15/ІПК clarified: the value of gifts not exceeding 25% of one minimum wage (per month), established on January 1 of the reporting tax year, should be reflected in the tax calculation under f. No. 1DF with a sign of income “160”. If the value of the gift exceeds the specified amount, then the entire amount should be reflected in the tax calculation f. No. 1DF with a sign of income “126” as an additional benefit.

It is worth noting that this year representatives of the fiscal department have changed the idea of taxation of a gift, the cost of which exceeds 25% of the minimum wage (in 2018 - UAH 930.75).

Previously, the SFSU explained that in case when the value of the gift exceeds the specified amount, it is necessary to tax the amount of excess (SFSU letter dated 24.02.17, No. 2985/5/99-99-13-02-03-16). But this year, controllers suddenly have changed the approach to the interpretation of the norm of para. 165.1.39 of the Tax Code of Ukraine and consider that if the value of gifts exceeds 25% of the minimum wage, their entire value is taxed by the income tax as an additional benefit, taking into account the provisions of para.164.5 of TCU.

Unified Social Contribution

The Ministry of Finance of Ukraine by its Order “On Approval of the Amendments to the Procedure for Accounting for Payers of the Unified Contribution to the Mandatory State Social Insurance” of 29.03.18, No. 393 approved changes to the accounting procedure for the payers of the Unified Social Contribution.

In particular, it is established the Application Form for the registration of a payer of the unified contribution (member of the farm) (form No. 12-USC) and the procedure for registering the payers of the USC - members of the farm.

In addition, representatives of the fiscal department explained how self-employed person can make amendments to the notification in the form No. 2-USC. Namely, in case of changing the name, surname, patronymic name, location, place of residence of the payer of the unified contribution or the control body in which the payer of the USC is registered.

Under these conditions, the payer needs to replace the notification No. 2-USC with the new one. In order to do this, he/she must submit a statement to the controllers, indicating the reasons for the replacement and the old notification. The controlling authority within 2 working days after such an appeal should issue (send) a new notification to him/her. In the same order, they issue a new notification instead of a corrupted or lost one.

In addition, the peculiarities of accounting of the separated divisions of foreign companies, which are included in the Unified State Register of Enterprises and Organizations of Ukraine and which are not registered with the corresponding controlling body, are also established. In this case, the controllers should take steps to filing by such a subdivision of documents for registration by the payer of the unified contribution, and such a payer to be accountable in the controlling body with the sign “the payer has not applied for registration”.

Accounting and Reporting

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Need to Reflect Bad Debts in the Declaration On Currency Values, Revenues and Property Belonging to a Resident of Ukraine and Located Outside Its Borders” of 05.05.18, No. 2005/ІПК/28-10-01-03-11 reported that the Declaration on currency values should reflect the bad debt of a non-resident.

The declaration of such debt can be canceled only after the obtaining of confirmation from the authorized body of the non-resident country of the lack of source of debt repayment.

The National Bank of Ukraine in its letter “On the reflection of transactions with debt financial assets in accounting that to be accounted at fair value with recognition of revaluation in other comprehensive income” of 05.05.18, No. 60-0006/25244 explained to banks, how to record in accounting a derecognition (repayment, deferral of claims, sale, write-off at the expense of a provision) of a debt financial asset that to be carried at fair value with the recognition of revaluation in other comprehensive income.

In the opinion of the National Bank, a revaluation recognized in equity (balance sheet 5102 “Results of the revaluation of debt financial assets accounted at fair value through other comprehensive income”) is reclassified to profit/loss and is reflected in the balance sheet account 6226 “The result of the reclassification of the revaluation of debt financial instruments that are accounted for at fair value because of other comprehensive income” of the accounts Plan of accounting of banks of Ukraine, approved by the decision of the NBU Board dated 11.09.17, No. 89.

Control and Responsibility

The Cabinet of Ministers of Ukraine by its Resolution “On Approval of Methods for Developing the Criteria for Evaluation the Risk of Economic Activities and Determining the Periodicity of Planned Measures of State Supervision (Control), as well as Uniform Forms of Acts, which are drawn up on the basis of planned (unscheduled) state supervision measures (control)” of 10.05.18, No. 342 determined unified rules for the development by the state supervision bodies (control) of the criteria for evaluation the degree of risk of the conducting business activities and determining the frequency of scheduled inspections. In addition, the procedure for the development by the state supervision bodies of a unified form of the inspection certificate was approved.

In order to determine the criteria, the controlling state body should analyze a set of different factors. The purpose is to identify the linkages between negative consequences (taking into account their scale, causes / conditions and quantity) and the corresponding quantitative and qualitative indicators (characteristics) of economic activity of business entities.

Criteria will be reviewed at least once every three years.

Consequently, the only methodology for developing these criteria will give businesses confidence in an honest and transparent procedure for their determination, since the frequency of scheduled inspections depends on the degree of risk assigned to the business entity.

The Ministry of Justice of Ukraine by its Order “On Approval of the Procedure for Preparation of Sector Listings of Documents with Time Limits for their Storage” of 23.04.18, No. 1244/5.3 defined the rules for the preparation of sectoral lists of documents by state authorities for enterprises, institutions, organizations of a certain branch or sphere of activity. Such lists will immediately indicate the terms of storage of documents.

A working group will be set up to prepare a draft list of the sectoral list in the state body.

The final industrial list is approved by the Head of the Ukrainian State Archive, after which it should be approved by the relevant state body.

The branch list will be introduced from January 1 of the year following the year of its approval.

It should be recalled that the destruction of documents without preliminary examination of their value is prohibited. It can be initiated by the owner of these documents or the state archival institution with the consent of the owner.

If there is a threat of destruction or a significant deterioration in the state of these documents, their owner is obliged to inform the state archival institution about the organization of the examination of the value of these documents.

The Ministry of Agrarian Policy and Food of Ukraine by its Order “On Approval of the List of Products Subject to State Control at Designated Border Inspection Positions” of 26.03.18, No. 159 approved the list of products subject to state control at designated border inspection positions. In particular, it included products of groups 02-06 (meat and edible offal, fish and crustaceans, mollusks and other aquatic invertebrates, milk and dairy products, poultry eggs, natural honey, edible products of animal origin, etc.), 12, 15 -23 (fats and oils of animal or vegetable origin, ready-made meat products, sugar and sugar confectionery, cocoa, flour confectionery, etc.) UCC FEA.

This list has been approved to comply with the requirements of the new Law of Ukraine dated 18.05.17, No. 2042-VIII. According to it, import (forwarding) to the customs territory of Ukraine of goods with products included in this list is allowed only through designated border inspection positions.

The Ministry of Justice of Ukraine by its Order “On Approval of the Amendment to the Procedure for the Notarial Acts of Notaries of Ukraine” of 24.04.18, No. 1247/5 made amendments to the rules of the performance of notarial acts. In particular, now the notary will not require a report on an expert monetary valuation of a land plot alienated by a legal entity if its execution is not required by law.

It should be recalled that conducting an expert monetary valuation of land plots must be done in the following cases:

• alienation and insurance of land plots belonging to the state or communal property (except for the alienation of land with an area of more than 50 hectares for the placement of open sports and recreational facilities);
• determination of the investment contribution to the implementation of the investment project for land improvement;
• determination of the value of land plots belonging to state or communal ownership, if they are introduced into the authorized capital of an economic partnership;
• determination of the value of land in the course of reorganization, bankruptcy or liquidation of an economic partnership (enterprise) with a state share or part of communal property that owns a land plot;
• allocation or determination of the share of the state or a territorial community in the ownership of the land plots;
• reflecting the value of land and the right to use land plots in accounting in accordance with the legislation of Ukraine;
• determination of losses to owners or land users in cases established by law or contract;
• court decision.

Labor and Salaries

The Ministry of Social Policy of Ukraine by its Order “On Approval of Requirements for the Safety and Health of Employees while Working with On-Screen Devices” of 14.02.18, No. 207 approved the Requirements for the Safety and Health of Workers in Operation with On-Screen Devices (hereinafter - Requirements). This document was adopted to replace the morally obsolete Rules of Labor Protection during the operation of electronic computers, which was approved by the State Committee of Ukraine for Industrial Safety in 2010. The requirements apply to all business entities without exception and establish minimum safety and health regulations when performing work related to the use of on-screen devices. Meanwhile, some workplaces and gadgets are not included in this list: in particular, it does not apply to the work of pilots, staff who deal with the maintenance, repair and adjustment of on-screen devices, nor does it apply to the use of tablets, smartphones and mobile phones.

The main provisions of the Requirements are as follows:

• the employer must inform the employees against acknowledgement on the working conditions and the presence of hazardous and harmful production factors (physical, chemical, biological, psychophysiological) in their workplaces that arise while working with the screen devices and have not yet been eliminated, and also about the possible consequences of their impact on the health of workers (Art.5 of the Law of Ukraine “On Labor Protection”);
• the employer must provide training and verification of workers’ knowledge of occupational safety and the safe use of on-screen devices before they begin work with them, as well as in cases of modification and organization of equipment operation;
• the employer must take steps to ensure that the workplace is in compliance with the Requirements;
• due to the duration of the work shift, internal regulated rest breaks should be organized in accordance with the State Sanitary Rules and the Regulations of work with the visual display terminals of electronic computers SSRaR 3.3.2.007-98, approved by the decision of the Chief State Sanitary Doctor of Ukraine dated December 10, 1998. No. 7;
• the employer at his/her own expense must ensure that the medical examinations of the employees are carried out in accordance with the requirements of the Procedure for carrying out medical examinations of workers of certain categories, approved by the order of the Ministry of Health of Ukraine dated May 21, 2007, No. 246.

The document also defines the security requirements for workplaces with on-screen devices and the minimum security requirements when operating on screen devices, as well as the minimum requirements for on-screen devices.

The Ministry of Social Policy of Ukraine by its Letter “On the Granting of Warranties to Reserve Officers” of 27.09.17, No. 2447/0/101-17 clarifies: the place of employment, position and average earnings to be saved for employees who are called for military service for officer personnel, during the special period for the period before its expiration or until the day of actual dismissal (Art. 119 of the Labor Code of Ukraine). That is, the employer must pay and pay the average earnings for the specified category of employees for the period before the end of a special period or before the day of actual dismissal.

The documents confirming the military service of the employee (including the officer’s troops) can be either a certificate issued by the military commissariat or military unit at the request of the employer, or an extract from the order of the military commissariat, or an extract from the order of the military unit of passage citizens of military service.

After release from military service, taking military records and arriving at the place of residence (stay), the employee must go to work.

If the place of an employee, who is serving military service officer, is replaced by a new employee for a fixed-term employment contract, the contract states that he/she is acting for the period of military service.

The Ministry of Social Policy of Ukraine in its letter “On Providing Social Extra Vacation on Children” of 26.03.18, No. 480/0/101-18/284 clarified the procedure for providing additional leave for children. Consequently, if a woman, after giving birth to a second child, did not complete her job duties and did not work a single working day, and issued an annual leave, she does not have the right to additional social leave for children.

It should be recalled that according to Art. 19 of the Law of Ukraine “On Leaves” of 15.11.96, No.504/96-ВР, a woman who works and has two or more children under the age of 15 years, provides an additional paid vacation of 10 calendar days each year, excluding holidays and non-working days.

Therefore, in order to receive such leave, according to the social department, it is not enough for a woman to have two children under the age of 15, she still has to work (to fulfil her job responsibilities).

The Ministry of Social Policy of Ukraine in its letter “On the liability for the payment of an advance in the amount less than specified in Art. 115 Labor Code” of 16.03.18, No. 118/0/22-18 recalled that according to Art. 115 of the Labor Code of Ukraine (hereinafter - Labor Code), the amount of salary for the first half of the month is determined by a collective agreement or normative act of the employer, agreed with the trade union, but can not be less than the payment for the actual time spent calculating the tariff rate (salary of the employee). In the case of payment of employees of wages not in full, other payments provided for by labor legislation (as well as violations of established terms of payment for more than one month), the employer may be fined UAH 11 169 (three times the minimum wage established by law at the time of detection violation, para. 3 of Part 2 of Art.265 of the Labor Code).

In addition, for the payment of wages not in full in accordance with Article 41 of the Code of Ukraine on Administrative Offenses, an official of an enterprise or an individual-entrepreneur who is an employer may be brought to an administrative liability in the form of a fine in the amount of 30 to 100 non-taxable minimum incomes of citizens (from UAH 510 to 1700).

The Civil Service of Ukraine on labor issues in its letter “On violation of the indexation procedure” of 24.01.18, No. 503/4/4.3-дп-18 informed: if during the inspection visit there would be established violations of the procedure for wage indexation, the labor inspector would have grounds to apply to the employer a fine provided for in para.4 of Part 2 of Art.265 of the Labor Code of Ukraine, for failure to comply with the minimum state guarantees for remuneration of labor. The size of the fine is 10 times the minimum wage (today - UAH 37 230) for each worker for whom the violation was committed.

In accordance with para.27 of the Procedure for the implementation of state control over the observance of labor legislation, approved by the resolution of the Cabinet of Ministers of Ukraine of 26.04.17, No. 295 (hereinafter - Procedure No.195), the inspector of labor issues an order and/or takes measures regarding the prosecution of the guilty person in committing violations of an official, based on the results of an inspection visit or a non-existent inspection. In case of fulfilment of the order in the time period established in it, measures to attract the object of visit and its officials are not taken to responsibility. At the same time, measures to attract employers and their officials to liability for:

• the use of employment off the books employees,

• untimely and not full payment of salary,

• non-observance of the minimum guarantees in the payment of wages is made simultaneously with the introduction of the order, regardless of the fact of elimination of the revealed violations (para. 29 of the Procedure No.295).

For non-compliance with the labor inspector’s order, a penalty is imposed on officials from 50 to 100 non-taxable minimum incomes (UAH 850-1700, Art.1886 of the Code of Ukraine on Administrative Offenses of Ukraine).

The Ministry of Social Policy of Ukraine in its Letter “On the duration of part-time work on a day off” of 25.04.18, No. 184/0/22-18/13 explained: it was allowed to work full time for part-time work on days off (according to the schedule determined by the main company). That is, if, for example, Saturday is a day off of the employee at the main place of work, then he/she can work full time at part-time work on Saturday.

The agency emphasizes that the total duration of part-time work during a month should not exceed half of the monthly norm of working time.

It should be recalled that part-time work of the employees of state enterprises, institutions and organizations is regulated by the Resolution of the Cabinet of Ministers of Ukraine of 03.04.93, No. 245. This document limits the total duration of part-time work to half the monthly rate. However, the requirements of this resolution do not apply to the self-supporting companies.

Financial Markets

The National Commission for State Regulation of Financial Services Markets (Natskomfinposluh) by its Order “On Approval of Amendments to the Regulation on the Procedure for Supervision on a Consolidated basis for non-bank financial groups, the predominant activity of which to be carried out by financial institutions supervised by the National Commission for the state regulation of financial services markets” of 29.03.18, No.458. improved the supervisory regime on a consolidated basis for non-bank financial groups. Thus, the specified order made the following amendments:

• Natskomfinposluh has the right to extend the period of submission of the documents which it requires, upon a reasoned request from the responsible person or controller, and establish a term for which the term of submission is extended, but not more than for 30 calendar days. The decision on the extension of the term is taken by a person authorized by the Natskomfinposluh;
• Natskomfinposluh will notify an agreed responsible person of the decisions taken through the telecommunication means;
• if the responsible person is no longer a participant in a non-bank financial group due to a change in the ownership structure of a non-bank financial group, then up to the day of the new one agreed, the responsible person is a financial institution - a member of a non-bank financial group that has the highest value of assets for the last reporting period (quarter);
• the termination of recognition of a non-bank financial group does not prevent the identification of such a group further if there are grounds for doing so.

The National Bank of Ukraine by its Resolution “On Approval of Amendments to the Regulation on the Procedure for the Issuance of Individual Licenses by the National Bank of Ukraine for the Use of Foreign Currency in the Territory of Ukraine as a Means of Payment” of 03.05.18, No. 48, amended the mentioned above Regulation.

From now on, in order to provide an individual license for currency settlements in Ukraine, the National Bank, in addition to the documents from the applicant, is able to request additional information from state agencies, authorized banks, other business entities and individuals regarding currency transactions.

In particular, the National Bank will be interested in information, documents and conclusions regarding participants in a currency transaction (including for legal persons regarding final beneficiary owners), the essence and purpose of this transaction, the correspondence of the essence of the transaction with the content of the applicant’s activities, sources of origin of the applicant’s funds (assets), the sufficiency of the real financial capacity of the applicant to make (initiate) a financial transaction for the appropriate amount, economic feasibility (meaning) of the transaction.

If the National Bank is not satisfied with the justification or it is provided with false or contradictory information, this may be the reason for the refusal of the license. The same applies to cases when the National Bank finds that the other party to the currency transaction or a person in favor or in whose interests this transaction is conducted is a legal entity or individual who has a Russian place of accommodation, place of residence, location, place of registration, etc.

The National Bank of Ukraine by its Resolution “On Amendments to Certain Legal Acts of the National Bank of Ukraine” of 15.05.18, No. 53 allowed borrowers to choose the optimal rate of purchase of foreign currency in authorized banks in order to fulfill their obligations to the creditor bank. From now on, firms will be able to buy currency through other banks of their choice to repay the loan. The only thing, the firm should have an opened current account in foreign currency in a bank.

It should be recalled that earlier, it was possible to buy currency to repay the loan in the lending bank.

In addition, the NBU simplified the procedure for returning investments and revenues from their implementation by foreign investors. Now non-residents can buy and repatriate currency if foreign investment to be directed directly to increase the share capital of this company.

Also, the National Bank allowed banks to conduct mutual settlements on transactions of purchase and sale of currency for hryvnia both before and after confirmation of transactions through the System of confirmation of transactions on the interbank foreign exchange market of Ukraine.

The Other Things

The Cabinet of Ministers of Ukraine approved measures plan on the Strategy implementation for the development of small and medium entrepreneurship in Ukraine for the period up to 2020 developed by the Ministry of Economic Development and Trade. This is reported on the website of the Ministry of Economic Development and Trade of Ukraine.

The relevant Plan provides for the implementation of a number of tasks:

• creation of a portal for small and medium entrepreneurship (hereinafter - SME) on the basis of the official website of the Ministry of Economic Development and Trade;
• creation of SME Development Office under the Ministry of Economic Development;
• implementation of a pilot project on partial loan guarantees for SME;
• implementation of a pilot project for the creation of a regional centers network for entrepreneurship supporting;
• introduction of SME development programs in accordance with the priorities of other strategic and program documents;
• improvement of regulatory procedures regulating SME activities.

According to the Government decision, those who are responsible for implementation of the Ministry plan and other central executive authorities must report on the state of implementation of the tasks stipulated by the document to the Ministry of Economic Development and Finance on a quarterly basis.

The Cabinet of Ministers of Ukraine by its Resolution “On approval of the Procedure for Using the Funds provided in the State Budget for State Support of Cinematography” of 18.04.18, No. 339 approved the Procedure for using the funds provided in the state budget for state support to cinematography (hereinafter - Procedure).

The said document stipulates that state support for the development of cinema can only be obtained by the State Companies “National Center of Oleksandr Dovzhenko” and the National Union of Cinematographers. At the same time, they should use the funds received in the directions specified in para.4 of the Procedure, in particular, on:

1) production (creation) and spreading of documentary, educational, animated films, films for the children’s audience, films of artistic and cultural significance and film debuts;

2) conducting international and domestic film festivals, film markets, film conferences, cinema seminars and other cinema-making events and ensuring participation of specialists in the field of cinematography;

3) coverage of expenses related to the issuance of state certificates for the right to distribute and display films, etc.

Recipients of state support must submit quarterly reports on the use of budget funds: State Cinema - by the 5^th day of the next reporting month, the Ministry of Culture - by the 8^th day of the specified period.