Taxes
Value Added Tax
The Ministry of Revenue and Duties of Ukraine in its letter of 19.12.2013 № 17866/6/99-99-19-04-02-15 noted that the operation of the supply of services provided to foreign and domestic vessels (including vessels that go to the sea port or from the sea port without cargo for loading / discharge within international traffic), making international transportation of passengers, luggage and cargo and paid Ukrainian port charges, are exempt from VAT. The main condition for the application by port such benefits are the documents, confirming international ship traffic.
In the case of domestic transport of passengers, luggage and cargo, VAT exemptions on real services, paying by port fees, do not apply, and such transactions are subject to VAT in the general order with the basic rate.
On transaction of the real services, provided to vessels traveling to sea port or from the sea port without cargo for loading/discharge within the domestic traffic specified benefit does not apply, and such transactions are subject to VAT in the general order with the basic rate.
Income Tax
Ministry of Revenue and Duties of Ukraine by its Order of 27.01.2014 № 84 approved a declaration form on income (profit ) of the insurer .
The new form significantly differs from the current. Besides differences in the details and terms of the declaration, changes are present in applications, the number of which increased to 12.
Appendix ІД (other income of the insurer) of the previous form supplemented by information on income from insurance operations and became the Appendix ДС. Appendix ЦП (securities transactions) increased in volume and is divided into 4 tables.
There are new Appendixes:
- СП (information on the deposits received and accrued insurance and reinsurance payments of insurers/reinsurers);
- ПП ( information on the amounts accrued and paid of reinsurance payments in the context of reinsurers);
- СБ (amounts of doubtful and bad debts);
- TЦ ( adjustment of tax liabilities of the taxpayer for the purpose of transfer pricing ).
The Ministry of Revenue and Duties of Ukraine by its Order of 06.02.2014 № 121 approved declaration form for income tax of the bank.
To the new form is added appendix ТЦ for corrections taxpayer's tax obligations for transfer pricing purposes.
Personal Income Tax
The Ministry of Revenue and Duties of Ukraine gave an explanation of 14.03.2014 with the procedure for the income declaring by citizens.
The Handbook contains:
- the main cases of submission and failure the Declaration of property status and income in 2014 , also has shown income that is not taxed by personal income tax but not exempted from taxation, and, therefore, according to subparagraph 168.1.3 of the Tax Code of Ukraine should be included in the total taxable income and shown in the Declaration ;
- ways to submit the Declaration; special attention is paid to the possibility of submission the Declaration electronically in real-time mode;
- hot line numbers that might help the tax payer quickly get all necessary information regarding provisions of tax and customs legislation and legislation in the field of Unified Social Contribution (USC);
- the procedure for getting by the tax payer tax discount according to Art. 166 of the Tax Code of Ukraine;
- benefits of using electronic office by the tax payer ;
- responsibility of individuals for understatement of tax liability for personal income tax in the Annual Declaration, found by the supervisory authority;
- additional services that the tax payer can use when pays taxes.
Tax payers who want to submit statements electronically should:
1) obtain a digital signature which is issued for free by Accredited Centre for Key Certification of Information Department of the Ministry of Revenue and Duties of Ukraine;
2) download from site of Accredited Centre for Key Certification (ACKC) software 'Program complex for ACKC user'. Manual should help to install software on a personal computer and complete settings;
3) log with a personal electronic key and start working.
The citizens of Ukraine should submit up to 1 May 2014 the Declaration of property status and income in 2014 in form, approved by the Order of the Ministry of Revenue and Duties of Ukraine 11.12.2013 № 793
The State Property Fund of Ukraine in its letter of 06.03.2014 № 10-36-2493 noted that receiving by private person inheritance or gifts tax base for personal income is defined as follows.
1. Cost of land plots as independent objects of civil relations is determined on the ground of extract of technical documentation on the normative monetary land valuation.
2 . For cars, motorbikes, scooters used the estimated value which is determined by the subject of valuation activity:
- 1.8 specialization of direction 1 ' Valuation of objects in tangible form' 2.3 specialization direction 2 'Valuation of integral property complexes, shares, securities, property rights and intangible assets, including the rights to intellectual property';
- direction 3'Valuation for tax purposes, calculation and payment other obligatory payments according to the law'.
3 . Other objects are valuated at fair value, determined by the subjects of valuation activity of specializations: 1.1 - 1.7 direction 1' Valuation of objects in tangible form '; 2.1 - 2.2 direction 2' Valuation of integral property complexes, shares , securities, property rights and intangible assets, including the rights to intellectual property'.
Valuation of property is carried out on the ground of the agreement concluded between the client and the subjects of valuation activity, and finalized as a report on valuation of the object.
The Ministry of Revenue and Duties of Ukraine in its Explanation of 18.03.2014 reminded that income earned by residents outside the customs territory of Ukraine, including dividends, income from disposal of investment assets, including corporate rights, securities, are subject to personal income tax at 15 and 17 % rates.
Payer who receives foreign income should include its amount to the total annual taxable income and submit up to 1 May Tax Declaration on the results of the reporting year and pay tax on income.
Income received in the form of currency values and other assets denominated in foreign currency or international units are converted into UAH at rate of National Bank of Ukraine at the moment of its accrual (receipt).
On the basis of international agreements the amount of annual tax liability might be reduced by the amount of taxes paid abroad.
Simplified Taxation System
The Ministry of Revenue and Duties of Ukraine in its letter of 23.01.2014 № 1538/7/99-99-17-02-02-17 informed that since 1 January 2014 the registration of a single tax payer is carried out on the basis of:
- Registration application in paper form, submitted to the revenue and duties authority;
- Electronic copies of scanned registration applications handed over by State registrar authority to the Ministry of Revenue and Duties with information from the registration card for carrying out state registration;
- Electronic registration application (only if digital signature of the person responsible for completing the application is registered).
If there are no grounds for refusal, the supervisory authority within 2 working days of application receipt is required to register a business entity as a single tax payer. If there are such grounds within the same period should be provided written refusal. Business entity has the right to appeal in the prescribed manner.
Getting extracts from the register is not required for single tax payers. Information from the register of single tax payers and data on persons whose registration is canceled should be placed at state registration web portal of legal entities and natural persons - entrepreneurs and at the official site of the Ministry of Revenue and Duties of Ukraine.
To confirm registration of single tax payer the Ministry of Revenue and Duties of Ukraine recommends up to adaptation relevant regulations providing of temporary extracts which should contain the following information:
- the date (period ) of choosing or change-over to a single tax ;
- the rate and group of a single tax payer;
- type of activity for groups 1 and 2 (КВЕД codes and the name of activity);
- for canceled - the date of removal from the registry.
Unified Social Contribution
The Pension Fund of Ukraine in its letter of 15.01.2014 № 1128/03-30 recalled that at the request of the payer by the Pension Fund authority might be checked calculations for all payments. If payments are different, at the payer's request could be printed cards of personal accounts. Verification of calculations is drawn up by an act.
In connection with changes of powers and authority on Unified Social Contribution (USC) management from the Pension Fund of Ukraine to the Ministry of Revenue and Duties of Ukraine crediting amounts of USC to the personal account of card payers Revenue and Duties authorities carried out on the basis of statements, provided by the Pension Fund of Ukraine.
Control and Responsibility
The Ministry of Revenue and Duties of Ukraine in its letter of 23.12.2013 № 18006/6/99-99-22-01-03-15 states that entity that provides services, including transportation by taxi, has the right to apply any PPO, included in the State register for the specified scope.
It should be noted that the tax authorities have sent a request to the PPO producers, including taximeters, to provide information on the possibility of providing consumers with a taximeter that meet the requirements of the Law on PPO.
The Ministry of Revenue and Duties of Ukraine by its Order of 03.03.2014 № 169 approved the new edition of the State Register of payment transactions. New State List of PPO has 101 positions. This is by 10 points higher than last year.
Accounting
The Ministry of Finance of Ukraine in its letter of 31.12.2013 № 31-08420-07-21/38615noted that the non-current asset is no longer recognized as an asset (written from the balance sheet) in case of disposal through sale, liquidation, donation, inadequacy, final damage or otherwise non-compliance criteria for recognition as an asset.
Other causes mismatching with criteria for an asset recognition might be losing control by the institution of fixed assets, the loss of an asset consumer characteristics, the inability to use the asset to achieve goal and/or meet the needs of the institution. For intangible assets such reasons could be the expiration of the patent, certificate, useful life, etc.
The Ministry of Finance of Ukraine by its Order of 27.01.2014 № 26 amended the Order of the financial and budgetary reporting drawing up by managers and budget holders.
The Ministry of Revenue and Duties of Ukraine in its Explanation of 06.03.2014 noted that fixed assets (FA) are an integral part of the property of almost every business entity. The cost of such objects is usually considerable but to include it in the expenses taken into account when calculating the tax object, the taxpayer can only within of accumulated depreciation - a gradual transfer of depreciable object of FA on the company expenses.
Depending on the group, to which is related one or the other object of FA, set the minimum allowable amortization periods (from 2 to 20 years). Such groups are 16.
The Ministry of Revenue and Duties of Ukraine in its Explanation of 11.03.2014 reminded that are not subject to depreciation and fully included in the expenses of the reporting period the payer's costs to:
- fixed assets on a caretaking status;
- fixed assets liquidation;
- acquisition (production) items for stage with a value up to 5,000 ths UAH by theatrical entertainment enterprises;
- cost of national film production and acquisition of intellectual property rights to the national film.
Also are not subject to depreciation and are financed from the respective funding sources:
- budgetary costs for construction and maintenance of buildings and residential house improvement, acquisition and preservation of library and fonds;
- budgetary costs for construction and maintenance of public roads;
- costs for acquisition and maintenance of the National Archival Fund of Ukraine, as well as the library fund, which is generated and maintained from budgets;
- cost of goodwill;
- cost of purchasing/production and repair as well as reconstruction, modernization or improvement of other non-productive fixed assets.
The term 'non-productive fixed assets ' means the tangible assets that are not used in the economic activity of the payer.
The Ministry of Finance of Ukraine by its Order of 08.02.2014 № 48 amended some Regulations on accounting. In particular, the Instructions on the application of the chart of accounts specified by rule - enterprises whose main activity is sale of securities should reflect:
- Income from changes in value of financial instruments, valuated at fair value on the account 71 'Other operating income';
- Expenses from changes in value of financial instruments, valuated at fair value on the account 94 'Other operating expenses'.
Enterprises whose main activity is not only sale of securities should summarize results of changes net assets value of financial instruments valued at fair value on subaccount 740 ' Income from changes in value of financial instruments' and 970 ' Expenses from changes in the value of financial instruments '.
The new edition contains financial statements for small businesses (П(С)БО 25 'Financial Report of a small business') - they are shorter and there are missing four-digit codes of lines.
Specified companies that should prepare simple financial statements of a small business. Instead the fourth group of single tax payers added micro entities .
Also have been changed П(С)БО 1, 7, 11, 27, 31, Notes to the Financial Statements, Chart of Accounts of enterprises and small enterprises (account 30 'Bank' was renamed to 'Cash '), the Regulations on the procedure for accounting of certain assets and operations in the public sector .
The Ministry of Infrastructure of Ukraine in its letter of 11.03.2014 № 2455/25/10-14 informed that the possibility of filling shipping document by hand (partly - printed) by rules is not provided. The same uncertainty with sealing of carrier.
However, the Ministry considers as necessary to attach to shipping document papers in free form (with obligatory cargo information (columns 1 – 10 of shipping document) in case if it is impossible to list all names in column 'Information about cargo'. In shipping document should be pointed out that the document has been attached, otherwise shipping document might be deemed barred.
In addition, the Ministry of Infrastructure reminded on how to fill shipping document details such as 'Kind of Traffic', 'Cargo Forwarding ' and 'Transportation services provided by motor carrier'.
Labour and Salaries
The Ministry of Social Policy of Ukraine in its letter of 25.01.2014 № 16/06/186-14 reminded that fixed-term employment contract is concluded when the employment relationship can not be established for an indefinite period taking into account the nature of work or its conditions as well as interests of workers and in other cases provided by law.
Such contracts might be concluded as in employment and in the future, if there is reason to conclude (renewal) temporary employment contract.
When an employment contract is signed for a specified period, this period is agreed by the parties and may be defined as a specific term and future occurrence of certain events (such as workers return to work from maternity leave and child care).
In the letter the Ministry of Social Policy reminded about the features of labor relations with employers - individuals.
Social Insurance Fund on Temporary Disability in its letter of 04.12.2013 № 04-30-3449 noted that in case of temporary disability of the insured person, working in part-time during the period of leave for care of child under three years age, sick leave is paid on common grounds. If woman is on maternity leave until the child reaches three years age and does not work (without salary), in the case of temporary disability sick leave should not be issued.
The Verkhovna Rada of Ukraine adopted the Law 'On Amendments to the Law of Ukraine 'On State Budget of Ukraine for 2014 '.
According to the Law and referring the unfavorable economic situation in Ukraine up to the end of the year the minimum wage and the living wage for able-bodied persons will remain at 1218 UAH. As it is known earlier the minimum wage and the living wage up to the end of the year was planned to raise up to 1301 UAH).
Also unified amount of child birth benefit is set. Now the benefit sum does not depend on order of child birth and comes to 41280 UAH. This amount will be combined with maternity benefit up to the 3 years age. First tranche will come to 10320 UAH, the remaining funds will be paid over the next 36 months in equal shares - 860 UAH .
The Ministry of Social Policy of Ukraine in its letter of 18.11.2013 № 232/10/137-13 informed that in case of increase in the minimum wage as well as growth in incomes, the month when increase was fixed should be considered as the datum month in indexation calculation. Income earned in the datum month, should not be indexed. Next month is carried out calculation of consumer price index cumulatively for further indexation. For indexation in the following months the inflation rate is calculated cumulatively.
If income with the amount of increase is less than the amount of income with indexation before its increase, in the datum month the amount of total income is determined in such a way that the amount of income with indexation does not exceed total income before increase.
Secondary job employees could get reference from principal place of business on the amount of income which is subject to indexation and indexed income. On the basis of this document is provided indexation of income from part-time work within amount not exceeding the living wage, taking into account wage received at the principal place of business.
Thus, the total income of the employee received in the principal place of business and in secondary job should not exceed the living wage
Securities
National Commission on Securities and Stock Market by its decision of 22.01.2014 № 47 approved the Regulation on the procedure for ensuring the existence of nominal securities in paperless form.
Financial Services Market
The National Bank of Ukraine by its Resolution of 27.02.2014 № 104 amended the Resolution №49, containing a number of measures on the activities of banks, aimed at ensuring the stability of UAH.
In particular, canceled the obligation of banks to fulfill orders of legal entities or physical persons-entrepreneurs to transfer funds in any currency (other than payments to the budget and social funds), including getting of cash (other than payments of wages, pensions , stipends and social payments, trips payments) in the balance of current accounts at the beginning of the working day (excluding amounts received during the working day ).
Set additional conditions of the temporary ban on the purchase of foreign currency for UAH on the interbank currency market of Ukraine for:
- early repayment of credits, loans (financial aid) in foreign currency under contracts with non-residents , including signing of additional agreements to loan agreements;
- coverage of the insurance reserves by insurers;
- implementation of resident investment abroad.
Provided that the said prohibition applies to instances of execution resident borrower obligations as to the principal amount of the loan and on other payments established by lending contracts (loans, financial aid ).
Residents have the right to conduct such transactions solely on their own (not purchased, not involved in the form of loans, loan) funds in foreign currency.
The National Bank of Ukraine by its Resolution of 18.03.2014 № 137 decreed as follows. When the bank completes an assignment of legal entities and private entrepreneurs to purchase foreign currency the time between the date of enrollment UAH on separate analytical account of account 2900 and the date when such funds may be used to buy foreign currency should be reduced.
From 19 March 2014 this period decreased from 6 to 5 business days, and from 25 March 25 2014 - four days.
The National Bank of Ukraine by its Decree № 43' On approval of provisions on the registration of payment systems, payment systems participants and operators of payment services infrastructure' introduced registration of services providers of payment infrastructure - clearing agency, processing agency and other persons authorized to provide individual services in the payment system.
According to the Decree, the payment infrastructure services providers operating in Ukraine , should submit to NBU documents for registration before up to 1 January 2015.
Public Procurement
The Verkhovna Rada of Ukraine adopted the Law of 06.02.2013 № 2207 'On Amendments to the Law of Ukraine 'On Public Procurement '. This normative act is intended to ensure transparency of public procurement.
Law prescribes strengthening of public control through the access grant to information on procurement results of enterprises, including procurement for their own funds.
There are presented changes into the mechanism of procurement information disclosure that carried out not only for public funds but also on own account.
The company is now obliged , under the Act , within three business days after signing the contract to place reports on the results of their procurements made on own account.
These reports will be posted on the web portal of the Authorized body but not all -only with value of the goods/ services - 100 thousand UAH ( in construction - 300 thousand UAH), for the works - one million UAH) .
Аudit Activities
The Auditor's Chamber of Ukraine during explanation of the Order of providing to auditors and audit firms auditing services in the form of expertise by its Decree of 27.02.2014 № 290/8 resolved the following.
In legal practice, there is a difference between the auditors conclusion on the results of the economic expertise and conclusion of forensic investigation. The auditor's report is not a forensic examination, which can be imposed only by a court and only after the initiation of the proceedings.
Current legislation does not consider Ukraine as a forensic investigation as a type of business, so the auditor can perform tasks of forensic expert , which are not inconsistent with auditing standards, Code of Ethics and not prohibited by the legislation of Ukraine and the Auditor's Chamber .
If the auditor is involved as a forensic expert, he is the subject of forensic activities and in the documents of the expert can not invoke on the name given by the Auditor's Chamber in auditor's certificate or a certificate of inclusion into the Register of auditors and audit firms because an auditor does relevant work not within the audit profession but as a forensic expert .
Other things
The Cabinet of Ministers of Ukraine decided to liquidate the Ministry of Revenue and Duties of Ukraine and restore the activity of the State Tax Service (STS) and State Customs Service. This was reported by the government portal.
Appropriate decision was made at a meeting of 1 March 2014. The document stipulates that STS is the central body of executive power, ensuring the implementation of the unified state tax policy, public policy, administration of a single fee for obligatory state social insurance, state policy in the sphere of fighting crime in the application of tax legislation as well as legislation on payment of the single contribution.
The State Customs Service is a central executive body, ensuring the implementation of the state policy in the field of customs.
Both services are directed and coordinated by the Cabinet through the Minister of Finance. The document stated that the Customs Service and STS are successors of the rights and obligations liquidated the Ministry of Revenue and Duties of Ukraine in appropriate fields.
The Ministry of Revenue and Duties of Ukraine in its Explanation of 27.02.2014 clarified the memo on the procedure for tax calculation of income accrued (paid) for the benefit of taxpayers and amounts withheld from their taxes, the order of approval of which will come into force on 1 April 2014 .
The proposed form is different from the previous by lack of the details 'Amount of tax debt as of 01.01.2011 (UAH, cop.)'. In addition, in guide revenues criteria changed the names of some codes ( 108, 118, 127, 129, 144) and added new ( 179 - 183).
The first time a form №1ДФ is submitted during the reporting period - I quarter of 2014.
When submitting the revised calculations for the period from 01.01.2011 to 31.12.2013 , the income is recorded on the grounds that were in the previous edition of the form.
The Cabinet of Ministers of Ukraine by its Resolution of 01.03.2014 № 65 headed for the savings of public funds and decided to avoid budget losses.
The Ministry of Revenue and Duties of Ukraine by its Order of 27.01.2014 № 85 approved the form of the Tax report on using of funds of non-profit institutions and organizations and the order of its preparation.
Compared with the current form, approved by the State Tax Administration, there are a number innovations. In particular, added groups of lines to reflect income of non-profit institutions and organizations with signs 0017 (employers' organizations and their associations) and 0018 (gardening and garage cooperatives or partnerships) .
Taken away lines to reflect the amounts of revenues and costs for the previous fiscal year. Added lines to reflect the amounts received and used humanitarian aid as well as appendix 'Explanation of transactions of humanitarian aid'.
The Ministry of Revenue and Duties of Ukraine in its letter of 28.02.2014 № 5087/7/99-99-10-03-01-17 considered some judgments of the Supreme Court of Ukraine on customs valuation of goods, based on provisions of the Customs Code of Ukraine of 2002. The Ministry came to the conclusion that they are applicable in response to provisions of the Customs Code of Ukraine of 2012 as well.
The Ministry of Revenue and Duties of Ukraine in its letter of 21.03.2014 № 6664/7/99-99-24-01-03-17 informed that according to Art. 233 of the Customs Code of Ukraine only national express carrier is provided a number of simplifications when forwarding international express dispatches (shipping) on the customs territory of Ukraine using of its own or hired vehicles registered by Traffic Police.
For foreign express transportation operators there any simplifications provided. The same applies to Ukrainian and foreign carriers providing to Ukrainian express carrier services on transporting goods through the territory of Ukraine (from checkpoint with border crossings and back). In this situation should be applied customs rules established for goods traffic using guarantee of payment of customs charges imposed by the Customs Code.
The Ministry of Economic Development and Trade of Ukraine by its Order № 62 of 01.23.2014 approved the Code of time standards for verification of measuring equipment.
The Code takes into account the time for verification, ground and closing works, workplace servicing, leisure and personal needs of the provider.
Time standards are used in determining the cost of verification of measuring equipment in accordance with Procedure for determination the value of metrological works and services, approved by the Order № 706 of 15.06.2012 of the Ministry of Economic Development.
If the Code does not provide certain time standards, the Company sets them in consideration of mentioned above time standards and/or company time standards for verification of the same measuring equipment or based on time card .
The Code is intended for application during verification of measuring equipment by state enterprises and institutions which are under management of the Ministry of Economic Development and Trade of Ukraine, and enterprises (their associations) irrespective of ownership and activity.
