There are seven National taxes today in the Tax Code of Ukraineof 02.12.2010 № 2755-VІ (hereinafter – TCU) due to the Tax reform: the income tax, the individual income tax, the value-added tax, the excise and ecological taxes, the rent payment and duties.
There are four local taxes and duties: the property tax and the single tax, the fee for parking spaces of means of transport and the tourism tax.
The changes introduced by the tax reform are briefly described below.
VAT
The compulsory registration by the VAT payer is only for the business entities now, whose volume of supply of goods / services for the last 12 calendar months cumulatively exceeded UAH 1 000 000 (previously it was about UAH 300 000).
The regulations of VAT assessment base are adjusted, they are approved under p.188.1 of the TCU. Thus, since 01.01.15 the tax assessment base of the transactions of supply of goods (works / services) should be determined on the basis of agreed cost, but not lower than (Art.188 of TCU):
- regular prices (in controlled transactions);
- acquisition prices of goods / services;
- the cost of self-produced goods / services;
- the balance (residual) cost of noncurrent assets according to the accounting, established at the beginning of the accounting period when there was the supply of noncurrent asset (if the accounting for the noncurrent assets was not maintained - not less than the regular price).
The above mentioned regulations of accrual base of VAT liabilities are not applied to the goods (services) supply, which prices are the subject to the state regulation.
Despite some conflicts of the TCU rules, in our opinion, since 01.01.15 all the tax invoices should be issued electronically and registered in the Unified Register of Tax Invoices (URTI) irrespective of the amount. There are 15 days for the registration in URTI as before.
The test mode is provided for the electronic VAT administration system from 1 February to 1 July 2015 (p.p. 33-37 subdivision 2 d. XX of TCU). Although the amendments are possible to be made again in the TCU in January.
Since 01.01.15 the Tax credit could be reflected in the period when the Tax Invoice was registered in URTI, but not later than:
- 180 calendar days from its making date;
- 60 calendar days from the date of the debit transfers from the bank account – for the VAT payers who use the cash method.
The income tax
Probably everybody heard about the news that the object of taxation on the income tax was determined according to the accounting rules with following difference adjustment, provided for in the TCU. Among other things the differences occur when the calculating depreciation of the current assets should be taken into consideration (Art.138 TCU), also the formation of reserves (provisions) (Art. 139 of TCU), financial transactions (Art. 140 of TCU), and the differences on sales transactions or other disposal of securities as well as transactions with investment property and biological assets, which are valued at the fair value (p. 141.2 of TCU).
There is a lot of time to implement the new rules of the tax accounting on income tax. There is because most of the people who have profit should submit the annual accounts on income tax. And under the new rules the Declaration for 2015 should be submitted up to 01.06.16.
USC
Despite the announced reduction of USC rate (including rate of 0.4 can be applied to the base rate for the company), not all will actually take advantage of the right of such minimization. There are stringent requirements in the norm for those who want to take advantage of the USC rate reduction, in particular, there is a requirement of increasing of the tax base of USC in 2.5 times compared to the previous year.
In addition, if the accrual base of USC (excluding fees for civil law contract) does not exceed the minimum wage for the corresponding month, the accrual of USC should be calculated from the amount of the minimum wage (the latest is UAH 1218 in January - November 2015).
The tax on profits
The parliamentarians raised the individual income tax rate to 20% (previously 17%), the rate should be applied to the incomes amount that exceeded UAH 12 180.
In addition, all passive incomes (excluding dividend incomes on shares and profit participation rights, accrued by residents-income tax payers) are the subject to the individual income tax at the 20 % rate now.
The single tax
There are only four groups of the Single tax payers since 01.01.15.
Only individual-entrepreneurs may choose I and II groups, and all the business entities that meet the work conditions at the ST may choose III group. But only legal entities - agricultural producers with agricultural share of 75% or more for the previous tax (reporting) year can work in the IV group.
In addition, the legislative officers increased the limit of income size of the single tax payers. Thus, it is UAH 300 thousand for the I group, for the II – UAH 1.5 million, and the third – UAH 20 million.
The ST rates are also corrected: I group to 10% of the minimum wage as of January 1, II group – to 20% of the minimum wage, III group – 2% of the income of the ST payer that is registered as VAT payer, and 4% - of the income of the single tax payer, who does not pay the VAT.
