Taxes
VAT
The Ministry of Finance of Ukraine by Order No. 842 of December 31, 2020 approved the Generalized Tax Consultation on some issues of value added tax (hereinafter – VAT) transactions for the supply of software products.
The consultation provides an answer to the question of whether transactions for the supply of various types of software products will be exempt from VAT.
In particular, it is clarified that transactions on delivery of computer programming results in the form of sites and/or online services and access to them, in case of transfer of intellectual property rights to such objects to the customer, will be exempt from VAT.
At the same time, transactions for the supply of systems and/or machinery/equipment, which are part of software products without allocating a separate value, are subject to VAT in the generally established manner.
Accounting and Reporting
The Ministry of Finance of Ukraine by Order No. 773 of December 15, 2020 approved a new form of tax calculation of the amounts of income accrued (paid) in favor of taxpayers - individuals, and the amounts of tax withheld from them, as well as the amounts of accrued single social contribution (hereinafter – SSC). Thus, usual form No. 1DF is supplemented by information on the accrual of SSC.
The tax calculation under the new form must be submitted for the first time in the first quarter of 2021.
The calculation is submitted separately for each quarter (tax period) broken down by months of the reporting quarter within 40 calendar days following the last calendar day of the reporting quarter. A separate calculation for a calendar year is not submitted.
The statements consist of the Calculation and its annexes:
- Annex 1 (A1) “Information on the accrual of wages (income, cash benefits) to insured persons”;
- Annex 2 (A2) is formed and submitted only by district (city) departments of labor and social protection;
- Annex 3 (A3) “Information on persons serving in the military”;
- Annex 4 (A4) “Information on the amounts of accrued income, withheld and paid personal income tax and military duty”;
- Annex 5 (A5) “Information on labor relations of persons and the period of military service”;
- Annex 6 (A6) “Information on the existence of grounds for accounting for seniority of certain categories of persons in accordance with the law”.
Control and Responsibility
The Cabinet of Ministers of Ukraine has approved the Procedure for Access to Information Necessary for Verification and Monitoring of State Payments.
“Procedure for access to information in the information and analytical platform for electronic verification and monitoring of bodies making state payments” was adopted on December 28, 2020 in accordance with the Law of Ukraine “On Verification and Monitoring of State Payments” in order to enable bodies making state payments, receive by means of information-analytical platform in real time confirmation of compliance of information reported by recipients of state aid, legal requirements affecting the determination of their right to receive and the amount of state payments, or a recommendation to conduct additional verification of such information.
According to the Procedure, the bodies that make state payments will have access to information free of charge on the basis of an agreement with the Ministry of Finance. The head of such a body will also designate authorized persons to grant them access for the duration of their term of office.
Financial Markets
The National Bank of Ukraine in letter No. 57-0009/80572 dated December 30, 2020 at the request of the Ministry of Economic Development confirmed that payment for goods (services) through Privat24, Oschad24, MONOBANK, Liqpay by transferring funds from the account at the request of the client is a banking transaction.
A similar position was taken before. From the NBU's point of view, non-cash payments include transfers using money transfer services (Liqpay, Portmone, iPay, etc.), remote banking systems such as Privat24, MONOBANK, Oschad24/7, etc. (including using a payment card) by the buyer depositing cash at the cash desk of a bank or non-banking institution (including through the use of software and hardware self-service. It can be found in letter of the NBU No. 57-0009/53844 dated September 28, 2020.
The NBU asked to take these requirements into account when providing tax advice to taxpayers.
The STSU interpreted settlements with the help of such services as settlement transactions within the meaning of the Law on PTR and required the recipients of the transfer for goods (services) to receive a fiscal check.
On December 29, 2020, the STSU press service confirmed only the fact that consumers, using the Internet, order services and pay for them exclusively using electronic payment instruments and payment systems (LiqPay, Portmone, EasyPay, PayPong, Ipay.ua, City24, Privat24, etc.), such transactions are performed without the use of PTR by the service provider.
This followed after from December 10, 2020 due to the Law No. 1071 the PTR is not required for payments for services, if such payments are made exclusively through banking systems of remote service and/or money transfer services.
Labor and Salaries
The State Employment Center has explained about the peculiarities of remote (home) work.
As you know, during quarantine, employers began to use more forms of remote (distance) work. The spread of coronavirus has forced officials to take steps to improve legislation in this area. Thus, in 2020 there was Art. 60 of the Labor Code of Ukraine (hereinafter – the Labor Code), which defined the features of remote and home work. According to the Ministry of Social Policy of Ukraine, previously the issues of home work were regulated mainly by the provisions of the Soviet era, as well as the collective agreement. The new provisions have saved the jobs of thousands of people who could produce products or perform their job functions using information and communication technologies at home.
The State Employment Center reminds of the main features of work outside the premises of the employer.
1. Mandatory conclusion of an employment contract for home (remote) work in writing
An employment contract is usually concluded in writing. Observance of the written form is obligatory in case of the conclusion of the employment contract on remote (home) work (item 61, part 1, Art. 24 of the Labor Code). At the time of threat of epidemic, pandemic and/or military, man-made, natural or of other nature, the condition of remote (home) work and flexible working hours may be established in the order of the owner or authorized body without mandatory conclusion in writing of an employment contract for remote (home) work.
2. Equality of home (remote) employees with employees performing work at the employer's premises
Performing remote (home) work does not entail any restrictions on the scope of labor rights of employees. In this case, if the employee and the employer have not agreed otherwise in writing, remote (home) work involves payment in full and within the time specified in the existing employment contract (Art/ 60 of the Labor Code). In this case, for homeworkers whose organizational and technical working conditions are close to those adopted during the calculation of production standards for employees performing similar work in production conditions, the same standards are set as for these employees.
3. Features of accounting for working time of home (remote) employees
In the case of remote (home) work, employees distribute working time at their discretion, they are not subject to the rules of internal labor regulations, unless otherwise provided in the employment contract. At the same time, the total duration of working hours may not exceed the rules provided for in Art. 50 and 51 of this Code (Art. 60 of the Labor Code).
At the same time, the competent authorities emphasize that the employer is obliged to keep records of all homeworkers who perform work, and to keep registration sheets of work assignments entrusted to the home employee, indicating the time allotted for the tasks.
4. Reimbursement of certain expenses to home (remote) employees
Employees can perform work on their own equipment. The content of Art. 125 of the Labor Code should be borne in mind. Employees who use their tools for the needs of the enterprise, institution, organization, have the right to receive compensation for their wear (depreciation). The amount and procedure for payment of this compensation, if they are not established in a centralized manner, must be determined by the owner or authorized body in agreement with the employee.
The administration may allow remote employees to manufacture products for the enterprise from their own materials and using personal machinery and tools. The list of types of own materials and quantity of the products made of them, and also the order of granting of raw materials and materials are defined in the branch instruction.
The organization of work processes at home is allowed only for persons who have the necessary living conditions, as well as practical skills or can be trained in these skills to perform certain tasks.
By agreement of the parties, the home employee may be reimbursed for expenses related to the performance of work at home for the enterprise (electricity, water, etc.). This issue should be resolved during the conclusion of the employment contract, the Ministry of Social Policy says.
5. The preemptive right of certain categories of persons to perform work at home
The preemptive right to enter into an employment contract for work at home is granted to:
- women who have children under the age of 15;
- disabled people and retired (regardless of the type of assigned pension);
- persons who have reached retirement age but do not receive a pension;
- persons with reduced working capacity, who are duly recommended to work at home;
- people caring for people with disabilities or family members who are long-term ill and in need of health care;
- persons engaged in work with seasonal nature of production (in the off-season), as well as studying in full-time educational institutions;
- persons who, for objective reasons, cannot be directly employed in production in this area (for example, in regions and areas that have free labor resources).
At the request of a woman or other persons who actually care for a child under three years of age during their stay on childcare leave, may work at home (Part 8 of Art. 179 of the Labor Code). Persons with disabilities who are unable to work in enterprises, institutions, organizations, the state employment service assists in employment with the possibility of work at home (Part 4 of Art. 18 of the Law of Ukraine “On Fundamentals of Social Protection of Persons with Disabilities in Ukraine”).
The Other Things
The Cabinet of Ministers of Ukraine has reminded that on January 16, 2021, Art. 30 of the Law of Ukraine “On Ensuring the Functioning of the Ukrainian Language as the State Language” became effective. From this day on, the final transition of the service sector to the state language will take place. According to the law, all service providers, regardless of ownership, are obliged to serve consumers and provide information about goods and services in Ukrainian.
“In practice, this means that Ukrainian consumers will finally have the right to get service in the state language by default – in a supermarket or online store, in a cafe or restaurant, in a bank or pharmacy, at a gas station or train station, in a gym or library, etc. There are few exceptions: only at the client's request can the personal service be provided in another language acceptable to both parties,” Taras Kremin, the State Language Commissioner, said.
“It is important to remember that the requirement to use the state language does not only apply to trade. We are also talking about educational services (including clubs and sections), medical care, social services, etc.,” he stressed.
Taras Kremin also noted that information in price tags, instructions, technical characteristics, markings, tickets, menus, etc. should be provided in Ukrainian. However, he noted that information in the state language about goods and services might be duplicated in other languages.
“In case of violation of the right to receive information and services in Ukrainian, it is advisable for the consumer, first of all, to ask the employee of the relevant institution to provide services in Ukrainian, the manager or senior management with a request to correct the situation, record violations in the complaint book. Every citizen may also file a complaint addressed to the Commissioner for the Protection of the State Language, send it in writing or by e-mail to the address of the Commissioner. At the same time, it is important to provide the most complete information about the business entity, the circumstances and the evidence that confirms the violation,” said Taras Kremin.
