The President of Ukraine signed the Law of Ukraine “On amendments to certain legislative acts of Ukraine on introduction of a unified tax and fees account, unified contribution to compulsory state social insurance”, and on April 17, 2020, it was published in “Voice of Ukraine” No. 67 published.
The Law provides for the creation of a unified account for the payment of taxes and fees provided for by the Tax Code of Ukraine (except for value added tax (hereinafter – VAT) and excise tax on the sale of fuel and ethanol, as well as customs payments), a unified social tax through the taxpayer account. According to the signed law, such account will be opened for the payer with his/her consent (wish) at the central level of the State Treasury Service.
The new law is expected to help simplify tax payments and help reduce the amount of money liabilities mismanaged or overpaid. According to lawmakers, the approved changes will increase the level of openness, transparency and confidence of taxpayers in government bodies.
The unified tax account will start operating in 2021.
The State Tax Service of Ukraine in category 101.12 “ZIR” answered the question “Can the VAT payer adjust the VAT amounts accrued after March 17, 2020 for the supply of medicines, medical devices and/or medical equipment in the customs territory of Ukraine, which under item 71 section 2 chapter XX of the Tax Code of Ukraine are exempt from VAT?
According to item 71 of section 2 chapter XX of the Tax Code of Ukraine (hereinafter – Tax Code), temporarily, for the period ending with the last calendar day of the month, when the quarantine established by the Cabinet of Ministers throughout Ukraine to prevent the spread of coronavirus disease (COVID-19) ends the operation of importation into the customs territory of Ukraine and/or the supply of goods (including medicines, medical devices and/or medical equipment) required for the implementation of measures in the customs territory of Ukraine aimed at preventing the occurrence and spread, localization and elimination of outbreaks, epidemics and pandemics of coronavirus disease (COVID-19), the list of which is determined by the Cabinet, are exempt from VAT.
Rules of item 71 of sections 2 chapter XX of the Tax Code apply to operations completed from March 17, 2020.
In accordance with item 192.1 of the Tax Code, if after the delivery of the goods/services any change of the amount of their value is made, including the next revision of prices, conversion in the cases of return of the goods/services to the person who provided them, or in case of repayment by the supplier of the advanced payment for the amount of goods/services, the amount of tax liabilities and the tax credit of the supplier and the recipient are subject to corresponding adjustment on the basis of calculation of adjustment to the tax invoice, made in the order established for taxation of these invoices, and registered in the Unified Register of tax invoices (hereinafter – URTI).
According to subitems 192.1.1 of the Tax Code if such recalculation results in a reduction of the amount of compensation in favor of the tax payer - the supplier, then:
a) the supplier accordingly reduces the amount of tax liabilities according to the result of the tax period during which such conversion was made;
b) the recipient accordingly deducts the tax credit on the results of such tax period if he/she is registered as a taxpayer at the date of adjustment and also increases the tax credit in connection with the receipt of such goods/services.
The supplier shall be entitled to reduce the amount of tax liability only after registration in the URTI of the adjustment calculations to the tax invoice.
According to item 192.2 of the Tax Code, the reduction of the tax liability of the taxpayer - the supplier in case of change of the amount of compensation for the goods/services provided to persons who were not payers of this tax at the date of such supply, is allowed only in case of returning the previously delivered goods to the supplier by providing the recipient with full monetary compensation for their value, including in the case of a review of prices related to warranty replacement of goods or low quality goods in accordance with the law or contract. However, the Tax Code does not provide for exceptions to reduce such tax liabilities in case of partial reduction of the value of the good/services supplied to the non-payer of VAT (regardless of the reasons for such reduction).
Considering the above, the taxpayer who, after March 17, 2020, has accrued VAT on operations of the supply in the customs territory of Ukraine of medicines, medical devices and/or medical equipment, which, according to item 71, section 2 of chapter XX of the Tax Code are exempt from VAT, obliged to adjust the amount of VAT, calculating the adjustment to the tax invoice, while returning to the buyers of the tax paid by them during the purchase of such goods and compiling a new tax invoice for tax exempt operation.
In this case, the taxpayer must make calculations according to which the amount of VAT paid (accrued) in the value of goods purchased and reflected in tax invoices drawn up in the period from March 17, 2020 to April 2, 2020, should be refunded to buyers, or credited to the cost of subsequent deliveries.
In case of such adjustment the taxpayer – the supplier must:
- calculate the adjustment to the tax invoice, compiled with value added tax, in which to indicate with a minus the indicators for the goods included in the list, determined by Cabinet resolution “On approval of the list of medicines, medical devices and/or medical equipment necessary for the implementation measures aimed at preventing the occurrence and spread, localization and elimination of outbreaks, epidemics and pandemics of coronavirus disease (COVID-19)” No. 224 of March 20, 2020, (hereinafter – Resolution No. 224). Such adjustment account is subject to registration in the URTI by the recipient (buyer) of goods;
- draw up and register win the URTI a tax invoice for the supply of goods included in the List specified in Resolution no. 224, without VAT, on a tax exempt operation.
The National Bank of Ukraine has provided clarification on the identification of clients when transferring funds.
The regulator has reminded that since April 28, 2020, updated requirements have been established for the list of payer and receiver information to accompany the transfer of funds, but according to the National Bank it will not have a significant impact on the vast majority of funds transfer transactions.
The new requirements are introduced in conjunction with the entry into force of the Law of Ukraine “On Prevention and Counteraction to Legalization (Laundering) of Proceeds of Crime, Financing Terrorism and Proliferation of Weapons of Mass Destruction” (hereinafter – the Law).
Several mass media have spread false information that the operation of payment systems will be suspended from April 28 this year. And, as a consequence, it would not be possible to conduct regular transactions- to pay for utilities, to make money transfers, to pay for goods/services. The National Bank stressed that this was not true.
The Law provides the following two basic requirements:
- carry out the identification and verification of the payer;
- accompany the transfer of funds with the necessary list of data concerning the payer and the receiver.
The updated requirements of the Law do not apply to:
- payment of housing and communal services, payment of taxes, fines, other mandatory fees and charges (regardless of the amount);
- payment of a loan in the amount of up to 30 thousand UAH;
- transfers for payment of goods and services made by the payer by means of a payment card (or other electronic payment method), if its number accompanies the transfer (regardless of the amount);
- all cash transfers within Ukraine in the amount of up to 5 thousand UAH;
- withdrawing funds from your own account.
The National Bank, in constant communication with the participants in the financial services market, sent the corresponding explanations to banks and non-bank financial institutions in letter No. 25-0006/18603 of April 13, 2020. The regulator advised them to analyze their internal procedures (processes) in advance and to bring them into compliance with the requirements of the Law, as well as to set up automated systems in such way as to ensure that transfers of funds were provided with the necessary information about the payer and payee.
The National Bank stressed that the payment for utilities is a low-risk transaction in accordance with the National Risk Assessment in the field of prevention and counteraction to the legalization (laundering) of proceeds of crime and terrorist financing. These transactions require minimal attention and simplified customer identification, verification and investigation measures. The requirements of Art. 14 of the Law on supporting the transfer of funds with payer and receiver information does not apply to utility payment operations.
Therefore, the introduction of new provisions of the Law while introducing remote identification mechanisms should significantly expand the tools of banks and non-banking financial institutions to remotely initiate and conduct these transactions.
The State Labor Office of Ukraine has explained how an employee of an enterprise declared idle will be paid for sick leave during the idle period of the enterprise.
Law of Ukraine “On compulsory state social insurance” No. 1105 of August 23, 1999 (hereinafter – Law No. 1105) stipulates that temporary disability assistance is provided to the insured person in the form of material security, which fully or partially compensates for the loss of salary( income), in the event of insured events, such as temporary disability due to illness or injury not associated with an accident at work.
Therefore, if the insured person does not carry out work activities (the company does not work and is not registered idle time) and salaries are not accrued, temporary disability assistance is not provided.
If during the idle time of the enterprise it is not the fault of the employee with payment of not less than two thirds of the tariff rate, the employee is scheduled to be at work and due to the temporary disability, he/she is deprived of the right to such payment (payment during idle time), he/she must be assigned with temporary disability assistance on the basis of temporary disability list issued in accordance with the established order and the average salary is calculated for the accrual of assistance in accordance with the Procedure for calculating the average salary (income, deposit) to calculate payments under compulsory state social insurance, approved by Cabinet of Ministers Resolution No. 1266 of September 26, 2001 (as amended by Cabinet of Ministers Resolution No. 439 of June 26, 2015).
Temporary disability assistance is not provided for the duration of the insured person's leave without pay, creative leave, extra leave in connection with training.
