The Cabinet of Ministers of Ukraine at its meeting approved the changes to the budget of the Social Insurance Fund of Ukraine (hereinafter – the Fund) for 2019. This is the second adjustment to the annual budget indicators, the original version of which was adopted on January 16, 2019.
UAH 1,017 billion was allocated for financial support (financing of hospitals, maternity benefits and burial allowances) and the total amount of expenditures is UAH 15,361 billion.
The changes are related to the actual over-execution of the Fund's budget revenue in particular at through the payment, that exceeds the projected one, of the unified social contribution (hereinafter – USC) by insurers (employers) and the redistribution of funds. The Fund's total revenues, taking into account the balance of funds at the beginning of the year, amounted to UAH 25.665 billion, which is more by UAH 996 million.
9.37% of USC is credited to the Fund on a daily basis as payment by the insurers of a single contribution. All available resources are channeled by the Fund to finance insurance payments and financial support as soon as they are received.
The State Tax Service of Ukraine in the individual tax consultation “On taxation of income tax and VAT transactions for free distribution of samples of goods for advertising purposes” No. 1873/6/99-00-07-02-02-15/ІПК of December 12, 2019 reported that in case the taxpayer conducts promotional activities by presenting samples of goods free of charge to non-tax payers (other than individuals) and taxpayers who are taxed at the rate of 0%, such payer of income tax when determining the object tax increase profit or loss before tax in the amount of goods in the manner prescribed by subitem 140.5.10 of the Tax Code of Ukraine (hereinafter – TCU).
If the value of the goods transferred freely (purchased (imported) for marketing/promotional activities (including free distribution) directly by the payer or through other persons is included in the value of taxable transactions, in particular in the value of sales of goods subject to tax and income generation (that justifies for example, costing of goods, or other, defined by the taxpayer's accounting policy, a document that establishes the selling price of the purchased, imported goods and includes in such prices the value of goods sold/promoted for free) are considered to be used in taxable transactions within the business activities of such a taxpayer, and therefore free distribution of these goods is not considered as a separate transaction for the supply and no additional VAT taxation is required.
When the free distribution of purchased (imported) goods within the framework of promotions is carried out not directly by the taxpayer, but on his/her behalf by third parties, then the services of such third parties for the distribution of those goods are subject to VAT and taxation in the general way. In this case, the basis of taxation will be the cost of the distribution service, not the cost of the goods to be distributed.
The State Tax Service of Ukraine in the individual tax consultation “On discounting debt in the form of financial loan and its accounting” No. 1814/6/99-00-07-02-02-15/ІПК of December 10, 2019 answered the payer's questions regarding discounting of debt in the form of a financial loan and its accounting.
According to subitem. 134.1.1 of the TCU the subject of corporate income tax is profit with a source of origin from Ukraine and abroad, which is determined by adjusting (increasing or decreasing) the financial result before taxation (of profit or loss) determined in the financial statements of the enterprise in accordance with NAS or IFRSs, with differences arising according to the provisions of the IFRS.
The provisions of the TCU do not provide for differences in adjusting the financial result before taxation on the discounting of financial assets.
Such transactions are accounted for in accordance with accounting rules when forming the financial result before taxation.
The State Tax Service of Ukraine in individual tax consultation “Should an entrepreneur who sells cocktails (“hot wine”, mulled wine) made using exclusively table wines, acquire a license for the retail trade of alcoholic beverages?” No. 1684/6/99-00-04-01-02-15/ІПК of December 4, 2019 reported the following.
In case of beer retailing, the sole entrepreneur (hereinafter – SE) is still entitled to a single tax. But if mulled wine or hot wine is poured along with beer, the situation will be somewhat complicated.
Wines are related to alcoholic beverages. Accordingly, alcoholic beverages are products obtained by alcoholic fermentation of sugar-containing materials or made from potable alcohols with an ethyl alcohol content exceeding 0,5% by volume in the headings 2203, 2204, 2205, 2206 (except for kvass of “live” fermentation), 2208 according to UKT ZED, and also with ethyl alcohol content of 8.5% by volume units and more specified in heading 2103 90 30 00, 2106 90 according to UKT ZED.
In addition, experts from the State Tax Service (hereinafter – STS) noted that table wine is a wine made by full or incomplete fermentation of the wort. Depending on the sugar content, table wine is divided into dry, semi-dry and semi-sweet.
According to DSTU 4806-2007 “Wines. General specifications” use of, sugar, water, flavors and colorants is prohibited in the production of grape wine.
Therefore, cocktails (“hot wine”, mulled wine) made using exclusively table wines are not table wines. That is, according to the STS, the SEs sell cocktails.
Since cocktails (hot wine, mulled wine) are not table wines, the SE, which plans to manufacture and market alcoholic beverages, must carry out such activities subject to a license for retail of alcoholic beverage.
In view of these arguments, the SE should move from a simplified to a general system of taxation based on subparagraph 3 of subitem 291.5.1 of the TCU.
The Supreme Court of Ukraine by decision of December 16, 2019 in case No. 826/12108/18 suspended the decision of the District Administrative Court of Kyiv of June 5, 2019 and the decision of the Sixth Administrative Court of Appeal of December 10, 2019, which annulled subitems 10, 20 and 21 of the Procedure for suspension of registration of tax invoice/adjustment calculation in the Unified register of tax invoices, approved by Resolution of the Cabinet of Ministers of Ukraine No. 117 of February 21, 2018 (hereinafter – the Procedure).
Therefore, by the time of the final judgment in this case, the said Procedure is in full force. All relevant commissions of the STS bodies continue to act in accordance with the current legislation and prevent the illegal formation of a tax credit.
The representatives of the State Tax Service of Ukraine noted that the said ruling of the Supreme Court of Ukraine protected the rights and legitimate interests of taxpayers. As the renewal of the Procedure allowed to consider the submitted explanations/initial documents on the tax invoices, the registration of which was suspended, and in case of legitimate reasons to make a decision in favor of taxpayers.
The State Labor Service of Ukraine detailed the rules of internship. In fact, the law provides for a limited list of cases where a person may be registered at an enterprise, institution or organization as an intern.
Students of higher education institutions and students of vocational schools who have received a profession (qualification) at the educational-qualification level “skilled worker”, “junior specialist”, “bachelor”, “specialist” and continue to study at the next educational-qualification level can interns. Such students have the right to take internships in the profession (specialty) for which education is obtained, at enterprises, institutions and organizations, regardless of ownership, type of activity and business.
The internship is conducted according to an individual program under the guidance of an employee of the company, institution, organization.
An internship agreement is concluded between the company, institution or organization and the student. The procedure for concluding such an agreement and its standard form have been approved by the Cabinet of Ministers of Ukraine.
Such internships may not exceed six months. The employer makes a record of its passing in the employment record.
Another case where the law provides for the possibility of an employee's internship is the upgrading of the qualification of the unemployed registered at the employment center as unemployed, in accordance with Art. 35 of the Law of Ukraine “On employment”.
In this case, the internship is the certification training of the unemployed in order to acquire practical skills for fulfilling the professional duties of the profession or position claimed by the unemployed employer.
The internship of the unemployed is carried out at the request of the employer according to an individual program, which is approved by the employer and agreed with the employment center. At the same time, a tripartite agreement is concluded between the employment center, the employer and the unemployed.
For the period of training, the unemployed still receives the payment of unemployment benefits in the amounts and within the terms set by the law.
