The Verkhovna Rada of Ukraine has approved a bill, which will create a regulator in Ukraine in the fields of electronic communications, radio frequency spectrum and postal services of the European standard.
The new bill provides:
- establishment in Ukraine of an institutionally, politically and financially independent regulator in the field of e-communications, radio frequency spectrum and provision of postal services;
- transparent procedure for selecting members of the regulatory body;
- current members of the regulator will continue to perform their duties until the end of the term, after which a competition will take place.
The National Commission for State Regulation of Electronic Communications, Radio Frequency Spectrum and Provision of Postal Services will:
- identify settlements without fixed Internet, mobile communications and monitor the provision of such services;
- exercise state supervision over the activities of operators/providers and postal service providers;
- monitor the quality of electronic communication services.
The adoption of this law is another important step for Ukraine’s entry into the European Digital Single Market, as the field of electronic communications is the basis for the development of digital services. The digital single market with the EU for Ukraine will provide new opportunities for access to online markets and e-services of EU countries. This will also simplify adherence to common rules for free cross-border distribution of online services and payments, etc.
In addition, the adoption of the bill depends on the proper functioning of the Law of Ukraine “On Electronic Communications” in 2022.
The Cabinet of Ministers of Ukraine continues the quarantine restrictions until March 31, 2022. This will help to fight the pandemic as effectively as possible and protect human health.
This means that all rules of access to public places with COVID-certificates, wearing masks, social distance, remain in force.
The Ministry of Finance of Ukraine has issued a General Tax Consultation on recognizing the debt of legal entities as bad.
Based on the results of the Ministry of Finance Expert Council on Preparation of General Tax Consultations (hereinafter – GTC) at, the Order of the Ministry of Finance of December 10, 2021 approved the General Tax Consultation on some issues of the amount of aggregate claims of the creditor to the legal or natural person – the debtor, which must be taken into account to classify such debt as bad.
This consultation clarified the amount of the aggregate claims of the creditor to the legal or natural person – the debtor, which may be taken into account for the classification of such debt as uncollectible in accordance with paragraphs “e” subitem 14.1.11 of the Tax Code.
It is clarified that taking into account the provisions of the Bankruptcy Procedure Code of Ukraine (hereinafter – the BPC), the above rule of the Tax Code is applied to recognize bad debts of natural person and sole proprietors, provided that such debt is overdue for more than 180 days and the amount of debt is less than 30 amounts of the minimum wage, and provided that the indisputability of the creditor’s claims on such debt is documented (agreement and primary document recognizing the debt, in particular, the recognized claim, the act of reconciliation with the debtor, the debtor’s letter).
At the same time, this norm of the Tax Code after the entry into force of the BPC is not applicable to the debt of legal entities. Thus, in order to recognize the debt of legal entities as bad, it is necessary to investigate other grounds specified in subitem 14.1.11 of the Tax Code.
Clarification of these issues will eliminate the ambiguous interpretation of certain provisions of tax law, the control of which is entrusted to the supervisory authorities.
The Ministry of Finance of Ukraine has published an updated draft of the procedure for establishing compliance with the arm’s length transactions with commodities based on the results of consideration of comments and proposals “On approval of the Procedures for establishing compliance of the conditions of the controlled arm’s length transactions on raw materials”.
The text of the document takes into account clarifications to certain provisions, which were made as a result of consideration of comments and suggestions received from experts and business circles during the partnership meeting on September 23, 2021. Explained explanations of the position on the comments and suggestions received at the link.
The Ministry of Finance is currently working in cooperation with the authorized bodies on approving the draft order.
The Verkhovna Rada of Ukraine has adopted the Law “On Amendments to the Tax Code of Ukraine to Stimulate the Development of the Digital Economy in Ukraine” (draft No. 5376.)
The law aims to provide tax incentives to the IT industry and establishes a comprehensive system of measures necessary for the development of the digital economy in Ukraine.
The law provides for the introduction of a number of measures to stimulate the development of the IT industry, improve taxation of the digital economy and differentiate residents of Diia City, who are payers of income tax on special conditions, as well as taxpayers using the current concept of income tax accrual and payment and the establishment of conditions of liability for legal entities that have benefited from the preferential treatment for non-compliance with the criteria for residents of Diia City.
Diia City provides comfortable tax rates on the income of IT professionals at the level of the simplified taxation system, the possibility of replacing the income tax with a distributed profit tax and tax incentives to attract investment.
Currently, the tax law provides:
- the transition period with restrictions on working with private individuals under the special regime will be as follows: no restrictions are envisaged until 2024. From 2024, the costs for single tax payers should not exceed 50%, and from 2025 – 20%;
- the level of tax burden on resident companies: personal income tax – 5%, SSC – 22% of the minimum wage, military levy – 1.5%; possibility to choose corporate tax – distributed profit tax (9%) or income tax (18%);
- companies will receive 0% personal income tax on dividends accrued by the resident company, provided they are paid no more than once every 2 years; tax rebate (with PIT) on the amount of investment in Ukrainian start-ups;
- amounts above the limit for distributed profit tax payers will be taxed at 9%. Income taxpayers will have to include expenses for private individuals in excess of the allowed 20% in the financial result;
- Diia City residents, who will remain on the general income tax model and have an annual income limit of up to UAH 40 million, will be able to work with sole proprietors without restrictions for the entire presidency;
In addition, preferential taxation on the salaries of specialists will not be limited to a single Classifier of economic activities and will apply to all employees of the company. Terms of Diia City are fixed for 25 years.
The State Tax Service of Ukraine has provided detailed explanations on the introduction of the Google tax.
The STSU offers to read information letter No. 26, which is devoted to Law of Ukraine No. 1525-IX of June 3, 2021 “On Amendments to the Tax Code of Ukraine to abolish taxation of income received by nonresidents in the form of payment for production and/or distribution of advertising, and improving the procedure for value added tax on transactions for the supply of electronic services to non-residents by individuals”.
Law No. 1525 supplemented the Tax Code with Article 208, the provisions of which enter into force on January 1, 2022.
The letter states:
- what the term “Electronic Services” includes;
- what tax rate is applied to transactions for the supply of electronic services by non-residents;
- who is considered a VAT payer for transactions on the supply of electronic services;
- how to determine the place of supply of electronic services;
- how the non-resident will interact with the tax authorities in Ukraine;
- under what conditions a non-resident person who supplies electronic services to individuals, the place of supply of which is located in the customs territory of Ukraine, is obliged to register as a VAT payer, etc.
The Ministry of Finance of Ukraine by Order No. 595 of November 12, 2021 approved the translation of the IFRS Taxonomy 2021, issued by the IFRS Foundation (London, UK).
Let us recall that capital market participants and issuers are required to submit financial statements by December 31, 2021 to the Financial Reporting Collection Center.
These are the annual financial statements and the annual consolidated financial statements for 2020, as well as the interim financial statements and the interim consolidated financial statements for 2021, compiled on the basis of the IFRS Taxonomy in a single electronic format iXBRL.
