November 26 - 30, 2018. Martial law was introduced in Ukraine

The Verkhovna Rada of Ukraine approved the decree of the President of Ukraine “On the Introduction of the Martial Law in Ukraine”

It will be in effect in areas bordering Russia and unrecognized Prydnistrovia. The President read out a list of those areas: Vinnytsia, Luhansk, Mykolaiv, Odesa, Sumy, Kharkiv, Chernihiv, Kherson and internal waters of the Azov-Kerch water area.

The Martial law is introduced for 30 days.

Martial Law is a special legal regime, which provides for the provision of special powers to the state authorities necessary for the prevention of a threat. Temporary restriction of the rights and freedoms of citizens, as well as temporary limitation of legal interests of legal entities.

During the Martial Law regime, military and civilian authorities gain wider powers that allow them to use human and material resources for their needs. It means that authorities are all military command - from the General Staff to the management of individual units, as well as the entire power vertical - from the President and the Cabinet to the village councils. Decisions, respectively, can be taken at both the central and local levels.

Martial Law allows:

• to impose the labor duty for the defense work, the elimination of natural and man-made emergencies, and socially useful works;
• to use the capacities and labor resources of enterprises and organizations of all forms of ownership for the needs of defense, to change the mode of their work, working conditions.
• to exempt for temporary use the necessary property of ministries, central and local executive authorities, territorial communities, enterprises and citizens, including vehicles, structures, machines, mechanisms, equipment and other objects related to transport services, issuing the established sample documents on these;
• to establish protection of important objects of the national economy of Ukraine, which provide living activity of the population;
• to impose curfew (the prohibition of staying in a certain period of time on the streets and in other public places without special permits and certificates) and to establish a special regime of light-shattering;
• to establish a special regime of entry and exit, to restrict freedom of movement of citizens, foreigners and stateless persons, traffic;
• to check documents of citizens, and, if necessary, inspect things, transport, luggage and cargo, office premises and citizens’ homes;
• to raise the question of the prohibition of the activities of political parties and public organizations if they threaten the sovereignty, national security of Ukraine, its independence and territorial integrity, as well as the lives of citizens;
• to monitor the work of communications companies, printing companies, publishing houses, broadcasting organizations, cultural institutions and organizations, use local radio stations, television centers and printing houses for military needs and explanatory work among troops and population; regulate the work of amateur receiving and transmitting radio stations, the transmission of information through computer networks;
• to exempt firearms and ammunition, cold weapons, from the public, and from enterprises, institutions and organizations - training and military equipment, explosives, radioactive substances and materials, potent chemicals and poisonous substances;
• to prohibit conscripts and military persons from changing their place of residence without the knowledge of the military command;
• to establish a military apartment duty for individuals and legal persons for the accommodation of military personnel and the placement of military units and institutions;
• to establish the procedure for the use of storage facilities, buildings and other objects for the protection of the population, as well as to meet the needs of defense;
• to evacuate the population, companies, institutions, organizations and property values;
• to introduce standardized provision of the population with basic food and non-food products, medicines;
• to forcibly withdraw and dispose of property from legal entities and individuals for defense purposes.

The fundamental human rights such as the rights to life, respect for dignity, freedom and personal integrity, the right for equality before the law, and right to shelter should not be limited during martial law.

Legislation establishes that during the martial law, elections of the President, the Verkhovna Rada, and local self-government bodies cannot be held. Accordingly, during the term of the Martial Law, it is not possible to terminate the powers of the parliament or local councils beforehand. It is also impossible to amend the Constitution, to hold a referendum.

The authorities also can’t use the work of citizens during Martial Law free of charge – it should be paid for work for defense needs, as in peacetime. Property withdrawn during Martial Law, after the end of the martial law, must be returned to the owner. If the property has become unsuitable, compensation for losses must be recovered through the court.

Сcurrently there are no restrictions on economic activity throughout Ukraine. This is stated by the Ministry of Economic Development and Trade.

Business entities and citizens can conduct economic transactions in the normal mode.

At the same time, in connection with the decision on the introduction of martial law, the Government said that all state institutions responsible for implementing social policy would work in accordance with the usual schedule of work.

In this way, the provision of social assistance and all payments to the population in the regular mode will be provided without interruption. There will be no restrictions on the payment of social benefits and pensions.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Value Added Tax” of 12.11.2018, No. 4793/6/99-99-15-03-02-15/ІПК reminded that the transaction of transfer of material assets for safekeeping was not the subject to VAT

However, if after the expiration of such storage, as specified in the contract, the custodian does not return the material asset to the taxpayer, such material assets are considered to be delivered, and the transaction for their supply is subject to VAT, based on the tax base determined in accordance with para. 188.1 of TCU.

At the same time, tax liabilities for such material assets are not accrued on the basis of para. 198.5 of TCU.

The State Fiscal Service of Ukraine by its letter “On certain peculiarities of drafting and registration of tax invoices and adjustment calculations to tax invoices” of 27.11.2018 р. № 36942/7/99-99-15-03-02-17 clarified the updating of tax forms invoice/adjustment calculation of the correction and the procedure of their completion, approved by the order of the Ministry of Finance dated September 17, 2018, No. 763 (hereinafter - Order No. 763).

Representatives of the fiscal department, considered:

• amendments made to the forms of the tax invoice and the adjustment calculation;
• amendments in the procedure for filling in the tax invoice and the adjustment calculation (the peculiarities of filling in the boxes in the upper left of the tax invoice/the adjustment calculation, the details of  tax invoice/ the adjustment calculation “Taxpayer’s tax number or series (if any) and passport number” (supplier/buyer), as well as peculiarities of filling in the tax invoice/ the adjustment calculation “The Amount of Value Added Tax”);
• peculiarities of making the adjustment calculations to the tax invoice (in the case of correction of errors in the details of the head of the tax invoice and correcting the error in the ITN of the recipient (buyer);
• indication in the adjustment calculation of the cause of the adjustment;
• indication in the adjustment calculation of the adjustment group;
• peculiarities of making the adjustment calculations to the tax invoices “excessively made” registered in the URTI.

At the same time, tax officials identified transitional issues, namely:

• as of 01.12.2018, the registration of tax invoices and adjustment calculations in the URTI is carried out in accordance with the form approved by the Order No. 763, regardless of the date of making such tax invoices and adjustment calculations;
• tax invoices and adjustments calculations that were submitted for registration before 01.12.2018 and which registration was suspended, in the future (in case of making the corresponding decision) to be registered in the URTI in the form in which such documents were submitted to the URTI;
• in the adjustment calculations made from 01.12.2018 to the tax invoices registered in the URTI by 01.12.2018, in the box “Before the consolidated tax invoice” instead of “X” mark, which is indicated in the tax invoice, it is indicated the corresponding code of signs from 1 to 4 (“X” mark should not be indicated);
• in the adjustments calculation made to the tax invoices registered in the URTI as of 01.12.2018, the code of sign indicated in the box “To the consolidated tax invoice” must correspond to the code of the sign “Consolidated tax invoice”, which is indicated in the consolidated tax invoice, to which the adjustment calculation is made;
• in the box “Not subject to the provision of the recipient (buyer) on the grounds” in accordance with para. 8 of the Order No. 763 when the preparation of tax invoices, the peculiarities of which are set forth in paras. 10-15 of the procedure No. 1307, the “X” mark is indicated and the type of reasons (the value from “01” to “15”) is indicated; for tax invoices made before 01.03.2017, such values may be from “01” to “17”);
• in the adjustment calculation made to the tax invoices, which filled in the box “Not subject to delivery to the recipient (buyer) on the grounds”, this box should also be filled in, and the type of reason should correspond to the type of reason stated in the tax invoice to which the adjustment calculation is made, regardless of the date of making such a tax invoice (before 01.03.2017 or after the specified date). For example, in the adjustment calculation made to the tax invoice dated 20.01.2017, which type of reason is “16”, the type of cause “16” should also be indicated, despite its absence in the list of types of reasons;
• when preparing the adjustment calculation of tax invoice, prepared and registered in the URTI before 01.12.2018, the line 14 of section B of the adjustment calculation “Value Added Tax” should not be filled in the lines to which the relevant figures of the tax invoice are transferred with the sign “-“ (indicated as “0”), at the same time, in the new (added) lines of such adjustment calculation, line 14 of section B is to be filled in case of availability of the tax amount (line 11 of section B of the adjustment calculation “7” or “20”).

The National Bank of Ukraine by its Resolution “On the peculiarities of functioning of the banking system of Ukraine in a special period” of 28.11.2018, No. 132 confirmed that during the martial law introduced for 30 days in 10 regions of Ukraine, the banking system would continue to operate in the normal mode.

If necessary the National Bank will adopt separate decisions regarding the order, scope and timing of the introduction of additional measures that determine the functioning of the banking system of Ukraine during a special period.

This document was created in connection with the adoption by the Verkhovna Rada of Ukraine of the Law of Ukraine “On Approval of the Decree of the President of Ukraine “On the Introduction of the Martial Law in Ukraine” and the fulfillment of the requirements of the Law of Ukraine “On the National Bank of Ukraine” and “On the Legal Status of the Martial Law”.

The Resolution will come into force on November 29, 2018.