Legislation Overview (September 2017)

Taxes

VAT

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the procedure for adjusting the amounts of tax liabilities on VAT and preparing by the taxpayer, which was reorganized by joining another tax payer, of the adjustment calculation for the tax invoice made before the beginning of such a reorganization” of 11.09.17, No. 1901/6/99-99-12-02-01-15/ІПК considered VAT accounting in a situation where the successor returned to the buyer the advance, which was received by the taxpayer, which was reorganized by joining.

Under such conditions, officials prohibit successors from computing the adjustment calculation and, accordingly, adjusting the tax liability. The representatives of the fiscal department argue that a person formed as a result of the reorganization of the taxpayer (other than the person created by the conversion), is registered by the taxpayer as another newly formed person (para. 183.17 of TCU). And registration of the VAT payer, which was joined another taxpayer, was cancelled.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Procedure for Filing in the Tax Reporting on VAT” of 07.09.17 No. 1859/6/99-99-15-03-02-15/ІПК considered the order of filling in the annex D2 “Certificate of Amount the negative value of the reporting (tax) period, which is credited to the tax credit of the next reporting (tax) period” to the tax return for VAT.

It is said in clarifying of the representatives of the fiscal department that when filling in the annex D2 in the graphs 2, 3 of its title part, it should be indicated the reporting (tax) period in which the amount of the negative value of VAT arose in the following format:

• two figures of the month (for example, 01, 02, 03, etc., or quarter − I, II, III, IV);
• four figures of the year (for example, 2017).

The officials advise to fill in the graphs of table 1 of Annex D2 in the chronological order of the amounts of the negative values reflected in the column 4 (total amount) of Table 1 of Annex D2 starting from the reporting period closest to the date of submission of the tax return for VAT (the newest reporting period), and ending with the oldest reporting period.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the Procedure for the Formation of Tax Liabilities and Tax Credit by the Housing and Utility Management Unit upon Receipt from Consumers of Costs for Thermal and Electric Energy, Water Supply and Drainage and subsequent Recalculation of Such Funds to Enterprises, Organizations Who Supply Such Goods/Services” of 14.09.17, No. 1955/6/99-99-15-03-02-15/ІПК considered the procedure for the formation of tax liabilities and a VAT credit by the housing and utility management unit, which receive from consumers the funds for thermal and electric energy, water supply and drainage, and also transfers these money to the suppliers of the mentioned services.

In the opinion of the representatives of the fiscal department, in case of receiving of such funds, the housing and utility management unit does not have the subject to VAT, since there is no transaction in the supply of services or goods.

However, in the case of the establishment by housing and utility management unit of a separate fee for the services of recalculation of funds received from consumers to the enterprises-providers of services, it is arisen the subject to taxation at the cost of services rendered.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the exemption from VAT of services for the carriage of passengers on public bus routes” of 14.09.17, No. 1958/6/99-99-15-03-02-15/ІПК has explained to carriers, which are the payers of value added tax (hereinafter - VAT), the peculiarities of application of the benefit from para. 197.1.8 of the Tax Code of Ukraine (hereinafter - TCU). Representatives of the fiscal department in advice considered services for passenger transportation on public bus routes.

Such services without charging a 20 percent tax can be provided under the condition that the transportation is carried out within the settlement and tariffs for such transportation are established by the authorized state authority or local self-government. Otherwise, transportation should be the subject to VAT according to the general rules.

Also, tax officials emphasized that the carrier is not entitled to refuse to use the privilege under discussion or to stop its use for one or several tax periods. After all, the release is not provided directly to the taxpayer, but provided for a specific transaction delivery.

The State Fiscal Service of Ukraine in the Individual Tax Advice “On the Procedure for Correcting the Error in the Individual Tax Number of the Buyer” of 05.09.17, No. 1824/6/99-99-15-03-02-15/ІПК reminded the procedure for correcting the error in the tax invoice, admitted in the individual tax number of the buyer:

• a “minus” adjustment calculation should be made by the date of the error detection;
• issue a tax invoice with the correct ITN date of tax obligations.

Also, the tax authorities emphasize: Article 1201 of the Tax Code of Ukraine does not provide for exemptions for the application of penalties in case of late registration of a tax invoice related to the correction of errors in the buyer’s ITN. That is, if from the date of the occurrence of tax obligations until the date of registration in the URTI of the tax invoice with the correct ITN deadline expired − a fine should be imposed on the seller.

It should be recalled that tax invoices, compiled from the 1^st to the 15^th of the month inclusive, should be registered no later than the last day of the month. And documents issued from the 16^th to the last day of the month, can be included in the URTI by the 15^th of the next month inclusive (para. 201.10 of TCU).

The State Fiscal Service of Ukraine in its letter “On Guidelines for Providing Information on Separate Issues in the Acts of the Documentary Inspections of the Beneficiaries of the Circular Tax Credit” of 02.11.16, No.  35277/7/99-99-14-02-02-17 made public for Providing Information on Separate Issues in the acts of documentary inspections of beneficiaries of the circular tax credit.

The controllers will analyze information about the contract, primary documents and accounting records to detect and fix in an act of unreal transaction.

In addition, representatives of the fiscal department will evaluate the illegality of reflection the data of primary documents in registers of accounts. Unreal transactions are conventionally divided into three types for this purpose:

• “commodity” − related to acquiring the asset (services) acquired by the beneficiary, the real source of which is unknown;
• “non-commodity” − the acquisition by the beneficiary of non-existent stocks (the asset is not actually formed) or the services not really provided with groundless attribution of their cost to expenditures;
• “advance payment” −  transfer of funds as supposedly an advance for goods/services with the formation of receivables for a transaction  that is obviously unrealistic (there are no objective circumstances for the possibility of real supply of goods/services in the future).

It should be noted that such recommendations are relevant to the checks of VAT payers for reporting periods until July 1, 17. Since this date, the unconditional basis for the formation of a tax credit is the registration of a tax invoice in the URTI (para. 201.10 of the Tax Code of Ukraine).

Corporate Income Tax

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Taxation by the Income Tax of the Share Contributions paid by Members (Associate Members) of the Housing Cooperative” of 08.09.17, No. 1872/6/99-99-15-02-02-15/ІПК clarified the peculiarities of the tax-profit accounting of share contributions paid by members of the housing and construction cooperative, which at the time of their receipt did not complete the construction of a residential building.

It should be recalled that while the residential building is not put into operation, the housing construction cooperative is a payer of the income tax on a general basis.

At the same time, tax legislation does not provide for adjustments to the financial result for the amount of share contributions paid by members (associate members) of the housing construction cooperative in its favour. Such transactions are for purposes of taxation, strictly according to accounting rules.

The State Fiscal Service of Ukraine in its individual tax Advice “On the classification of indebtedness as a category of “bad debt” of 01.09.17, No. 1783/6/99-99-15-02-02-15/ІПК explained which corrective differences would arise in case of write-off commodity receivables, for which the limitation period expired, if the measures concerning its collection were not carried out or did not give results.

Consequently, if there were no attempts to return commodity receivables, then after expiry of the limitation period, it should be classified as irrevocable financial assistance. As a result, the correctional difference from paragraph 140.5.10 of the Tax Code of Ukraine is activated. That is, if the debtor was a “zero tax payer”, then the result will have to be increased by the amount that has been transformed into reimbursable financial assistance of overdue receivables.

Representatives of the fiscal department expressed an interesting position regarding the taxation of overdue commodity receivables whose enforcement measures were carried out but were unsuccessful. Under these conditions, the payer must reduce the financial result to the amount of such a bad debt (para.139.2.2 of TCU). It turns out that before it is necessary to increase the financial result on the amount of such costs according to para. 139.2.1 of TCU.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On adjusting the financial result before taxation on the amount of accrued depreciation of the leased integral property complex and its repairs (improvements)” of 15.09.17, No. 1976/6/99-99-15-02-02-15/ІПКclarified that a company that leased an integral property complex (state or communal property) should adjust the accounting financial result to depreciation differences. That is:

• increase the financial result before tax on the amount of accrued accounting depreciation of production fixed assets included in the leased integral property complex;
• reduce the financial result before tax on the amount of estimated tax depreciation of such fixed assets.

The obligation to apply such differences will arise only in the situation where the taxpayer will have an annual income tax of more than UAH 20 million or will decide on an adjustment on his/her own.

Such a conclusion is based on para. 3 of Art. 23 of the Law of Ukraine ‘On the lease of state and communal property” of 10.04.92, No. 2269-XII. It says that depreciation deductions for leased integral property complexes of enterprises, their structural divisions, buildings and structures are levied and left by the tenant.

Representatives of the fiscal department also emphasize that in case of repair of the leased integral property complex, the VAT payer will have the right t to a tax credit for such expenses. This requires:

• an integral property complex to be used in the economic activity of the company;
• the tax invoices prepared by the supplier for such transactions to be registered in the Unified Register of Tax Invoices.

PIT and War Tax

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Taxation of Amounts by the Tax Agent of Reimbursed Expenses Incurred by an Individual (employee) During a Business Trip” of 01.09.17, No. 1785/6/99-99-13-02-03-15/ІПК notes that reimbursement of travel expenses in a two-bed compartment of first class carriage (SV vagon) is not the subject to the income tax and the war tax, provided for provision of a travel document by a seconded employee, which is executed for a separate compartment.

It should be noted that the passenger is entitled to occupy, as a rule, one seat in accordance with the purchased travel document. However, in the presence of vacant seats, he/she can be provided the opportunity to buy a double compartment in first class carriage (SV vagon). A travel in a separate compartment is executed by one travel document (para. 2.26 of the Rules of carriage of passengers, luggage, load-carrying and mail by rail transport of Ukraine, approved by the order of the Ministry of Transport and Communications of Ukraine dated December 27, 2006 No. 1196).

It should be reminded that the amount of travel expenses, reimbursed to the individual, who is in labor relations with his/her employer or is a member of the governing bodies of enterprises, institutions, organizations, in accordance with the procedure established by law, travel expenses within the limits of actual expenses, in particular for travel (incl. Carriage of luggage, reservation of transport tickets) to the place of business trip, back, at the place of business trip (including leased transport) (paragraphs 170.9.1 of the Tax Code of Ukraine).

Unified Social Contribution

The State Fiscal Service of Ukraine in its Individual Tax Advice “On appeal to the court on the application of penalties and the payment of a penalty for non-payment (non-transfer) or untimely payment (untimely transfer) of the unified contribution” of 15.09.17, No. 1969/6/99-99-13-02-01-15/ІПК reported the following. As it is known, after receiving a decision on the application of a fine and a penalty for the untimely payment of the unified social contribution (hereinafter − USC), the insured has 10 calendar days for their payment. In case of disagreement with such decision, the policyholder has the right to appeal against it, in particular, in court. In addition, the appeal will stop the above payment deadline. Payers should know that the relevant fiscal authority must necessarily be notified in writing about the appeal. This is provided for by para. 2 of sec. 14 of Art. 25 of the Law of Ukraine “On the Collection and Accounting of the Unified Contribution to the Mandatory State Social Insurance” of 08.07.10, No. 2464-IV. If not informed, after the expiration of the 10-day term, the fiscal authority will pass the decision to the executive service.

Simplified Tax System

The State Fiscal Service of Ukraine in its Individual Tax Advice “On the receipt of reimbursable financial assistance by an individual – unified tax payer” of 29.08.17, No. 1757/6/99-99-13-01-02-16/IПК clarified that reimbursable assistance given to an individual – unified tax payer should be taxed at a rate of 18% of the income tax and 1.5% of the war tax. In accordance with paragraph 177.6 of the Tax Code of Ukraine, income received by an entrepreneur outside his/her business activity should be taxed in accordance with the general rules established for individuals.

Other Taxes and Fees

The Ministry of Finance of Ukraine in its Order “On Approval of the Procedure for Repayment of Advance Payments (Prepayment) and Mistakenly and/or Excessively Amounts of Customs Payments” of 18.07.17, No. 643 approved the procedure for returning to the payer a fee paid in advance or transferred incorrectly.

In order to receive back advance payments or mistakenly paid customs payments, the payer should send a statement (free form) to the customs authorities to return the advance. From now on, such an application can be submitted electronically within 1095 days from the date of the advance payment or false payment.

Customs officials will spend no more than five business days for consideration of an application and a decision on the return of funds (earlier they were given 10 days).

Accounting and Reporting

The Ministry of Finance of Ukraine in its letter “On Documentary Registration of Commercial Transactions” of 22.08.17, No.  35210-07/23-3364/2658 expressed its opinion regarding documentary registration of lease transactions. Thus, it is logical that the representatives of the department have noted that only one contract is not enough for confirming the lease transaction. In their words, the parties usually constitute an act of rendering services, which is the basis for calculations, the procedure of which determines the lease agreement.

In this case, if the terms of the lease agreement establish a separate primary document, which serves as a confirmation for calculations for the provision of services (lease of property), then the parties have the right to use it. The Ministry of Finance emphasizes: in particular, an invoice duly drawn up may be a sufficient basis for reflection in the accounts of the business transactions for the provision of services (lease of property) without preparation of an act of the services rendered. But only if it is paid, which is confirmed by the corresponding settlement documents.

The Ministry of Finance of Ukraine by its Order “On Approval of the Notice Form on the conclusion of a forward or a futures contract” of 03.07.17, No. 621 approved the form of notification of the conclusion of a forward or a futures contract. It should be recalled that para. 39.2.1.3 of TCU obliges taxpayers to inform the SFSU body about the conclusion of such contracts.

The contract details (who are the buyer and seller) and the terms of the contract should be indicated in the notice, in particular:

• brief description of the commodity that is the underlying asset of a forward or a futures contract;
• commodity code according to UCC FEA;
• amount of basic asset;
• allowable deviation of the amount of the basic asset in the event of such conditions in the contract;
• code of the unit of measurement of the subject of the transaction in accordance with the Classifier of the system of designations of units of measurement and accounting DK 011-96, approved by order of the State Committee for Standardization, Metrology and Certification of Ukraine of 9 January 1997, No. 8;
• price (tariff) per unit of measurement of the subject of the transaction in the currency of the contract;
• currency code according to the Classifier of foreign currencies and banking metals, approved by the decision of the Board of the NBU dated 04.02.98, No. 34;
• conditions of delivery of goods in accordance with the rules of Incoterms;
• term of a contract.

The National Bank of Ukraine by its Resolution “On Approval of the Normative Acts of the National Bank of Ukraine on Accounting” of 11.09.17, No. 89 approved a new chart of accounts of banks and guidelines to it.

Consequently, since December 25, 2017, all banking institutions must keep an accounting under the changed chart of accounts.

It should be recalled that due to the introduction of IFRS 9, charts of accounts of the banks were amended.

The National Securities and Stock Market Commission (hereinafter − NSSMC), by its decision “On Amendments to the Regulation on the Procedure for Reporting by Depositary Institutions to the National Commission on Securities and Stock Market” of 10.08.17, No. 584 amended the Provision on the reporting procedure by the depositary institutions to the National Securities and Stock Market Commission, approved by the decision of the NSSMC from 11.06.13, No. 992.

Now, additionally it will be necessary to disclose information about the holders of the shares of the PJSC, which have rights for shares in the amount of 5% or more of the authorized capital. Now, if the issuer is a public joint stock company, the owner of the block of shares is considered to be the person who has the rights to shares in the amount of 5% (and not the minimum 10% as before) and more than his/her authorized capital.

In fact, these changes are due to the update of 23.03.17 of certain provisions of the Law of Ukraine “On Securities and the Stock Market” dated 23.02.06, No. 3480-IV (paragraph 15 of the Law of Ukraine “On Amendments to Certain Legislative acts of Ukraine on increasing the level of corporate governance in joint-stock companies” dated 23.03.17, No. 1983-VIIІ). That is, at present the subjects to the disclosure in the stock market are:

• information on holders of packages (10% or more) of shares of private joint stock companies (regardless of type and/or class). It is submitted to the Securities Depositary by the Central Securities Depository within the statutory time limits;
• information on holders of shares of public joint stock companies, the package of which is 5% or more shares. It is submitted by the Central Depository to the issuer of securities in the period established by the NSSMC. In particular, this information must contain:

a) the size of the package of such owner, indicating the percentage, quantity, type and/or class belonging to such shareholder;

b) information about the owner indicating the name of the owner, the code according to the USR (for the legal entity − resident), or the code / number from the commercial, bank or judicial register, registration certificate of the local authority of the foreign state on the registration of the legal entity (for the legal entity − non-resident).

At the same time, information about the holders of 10% or more shares of private joint-stock companies and holders of shares of public joint stock companies, which package is 5% or more, is open and disclosed in the order established by the NSSMC by placing of valuable securities of the NSSMC in the publicly accessible information database on the market.

Control and Responsibility

The Cabinet of Ministers of Ukraine adopted the Resolution “On Amendments to the Procedure for the Implementation of Dimensional and Weighted Control and Collection of Fees for Travel by Roads of General Use of Vehicles and Other Self-propelled Machinery and Machinery which Weight and/or Overall Dimensions exceed the Normative” of 30.08.17, No.  671 made amendments to the Procedure for the implementation of dimensional and weight control and charging for the use of motor roads for the general use of vehicles and other self-propelled machinery and mechanisms which weight and/or dimensional parameters exceed the standard ones. In particular:

• the State Service of Ukraine for Transport Safety bodies will be monitored for the permissible weight and dimensions of vehicles;
• previous dimensional and weight control is cancelled. From now on, such control includes only documentary and/or precise control;
• dimensional and weight control of a vehicle must be carried out within not more than one hour (from the moment of arrival of the vehicle to the weight until the final registration of the materials in case of detection of violation);
• the order of actions is fixed in case of detecting the excess of the established dimensions and weights by means of automatic weighing points. In this case, vehicle dimensional and weight control will be carried out at the nearest fixed and/or mobile point of the weight and weight control;
• according to the results of the overall-weight control at the stationary or mobile station, the driver of the vehicle is issued a certificate on the implementation of dimensional and weight control, indicating the time and place of its implementation. In the case of presentation by the driver of the vehicle of an international certificate of weighing of dimensional and weight control should not be carried out in the part of weighing.

The Cabinet of Ministers of Ukraine issued an order “On Certain Issues of State Supervision (Control) in the Field of Technogenic and Fire Safety” of 20.09.17, No. 643-р, and instructed fire-fighters to carry out unscheduled inspections of pre-school and general educational institutions, health facilities, the elderly and the disabled, recreation facilities and the improvement of the state and communal forms of ownership. Private-ownership institutions will be checked in case of written request from business entities. Inspections should show the real state of technogenic and fire safety in these institutions.

The period of inspections is October-December 2017.

The Cabinet of Ministers of Ukraine by its Resolution “On Amendments to the Rules for the Provision and Receipt of Telecommunication Services” of 20.09.17, No. 703 amended the Rules for the Provision and Receipt of Telecommunication Services. Thus, the order of sending charity SMS was regulated at the normative level. Fundraising for charity by means of sms messages is carried out according to the agreement of joining between the operator and the corresponding organization with the indication of the telephone number allocated for collecting funds.

The operator must inform the subscribers in advance about the name of the charity service and the amount of money that he/she will transfer from their personal account for charity. After sending a charity sms, the operator must inform the subscriber of the amount of money that has been withdrawn from his/her account.

The operator must provide services for sending SMS-donations in favour of non-profit organizations (except political parties) free of charge.

The Ministry of Finance of Ukraine issued its order “On Approval of Amendments to the Procedure for Drafting the Results of Documentary Inspections to Compliance with the Legislation of Ukraine on the Issues of State Customs, Tax, Currency and Other Legislation by Taxpayers − Legal Entities and their Separate Divisions” of 21.07.17, No.  657, which updated the rules for drafting the results of documentary inspections to compliance with the legislation of Ukraine on issues of state customs, tax, currency and other legislation by taxpayers − legal entities and their separate units.

In particular, the list of information that representatives of the fiscal department should reflect in the act (certificate) is updated.

It is also cancelled the imperative norm that an act must be drafted in hard copy.

The Ministry of Finance of Ukraine by its Order “On Approval of the Procedure for Providing Information from the Register of Insurers of the State Register of Mandatory State Social Insurance” of 21.07.17, No. 651 approved the Procedure for providing information from the register of insurers of the State Register of Mandatory State Social Insurance.

Consequently, if the unified contribution payer or insured person will need documentary evidence of the insurer, they will be able to obtain an extract from the insurer’s register in accordance with the approved procedure.

The order defines the forms of:

• a request for obtaining an extract from the register of insured persons (form No. 1-ЗРС);
• extracts from the register of insured persons (form No. 1-ВРС − for legal entities-insurers, form No. 2- ВРС and No. 3-ВРС − for individuals-insured persons);
• certificates of absence of information in the register of insured persons (form No. 1-ДРС).

The extract or certificate should be provided to the unified contribution payer or the insured person upon their request in electronic or paper form free of charge within two working days following the day of receipt of such request.

The Ministry of Economic Development and Trade of Ukraine by its Order “On Тhe Establishment of Metrological Requirements for Packaged Goods” of 05.07.17, No.  969 approved the metrological requirements for packaged goods that do not have a sign of compliance with the Technical Regulations.

The establishment of requirements is related to the entry into force of the CMU Resolution “On Amendments to the Technical Regulation for certain goods packaged by weight and volume in the finished package” of 18.01.17, No.  23, which allows manufacturers to voluntarily affix the conformity mark on its products (of course, if it is not subject to compulsory certification).

Consequently, the requirements will help to regulate permissible levels of deviation when packing products without certificates in the finished package or bottle. That is, the manufacturer, when packing the product, must ensure that its actual quantity (weight) corresponds to the maximum quantity (weight) indicated on the bottle or packaging.

The Ministry of Economic Development and Trade of Ukraine and the State Regulatory Service of Ukraine by the joint order “On Approval of the Requirements for the Preparation of Annual and Complex Plans for the Implementation of State Supervision (Control) Measures, Amendments to them and a Report on their Implementation” of 07.08.17, No. 1170/81 approved the Requirements for the preparation of annual and comprehensive plans for implementation of state supervision (control) measures, amendments to them and a report on their implementation. It grouped all the requirements for planning inspection of business entities by the controlling authorities. In particular, the authorities in charge of inspection should:

• publish a plan of complex inspections − before November 15 of the year preceding the planned one;
• publish annual inspection plans − before December 1 of the year preceding the planned one;
• make amendments to the plans not later than 20 days before the beginning of the events and submit a copy of the decision on the making amendments to the State Regulatory Service of Ukraine within two working days after the adoption of such decision;
• prepare and publish reports of implementation of the plans on the official websites of the respective controlling bodies by April 1 of the year following the year of the activities.

The Ministry of Regional Development, Construction and Housing and Communal Services of Ukraine by its order “Some Issues of the Expertise of Project Design Documents for the Construction of Objects” of 15.08.17, No. 204 defined the criteria that should be met by expert organizations of any ownership form that carry out the examination of construction projects.

In addition to general criteria there are also put forward strengthened requirements to expert organizations,  if they want to carry out an examination of projects for the construction of objects that are classified as medium-impact (CC2) or with significant consequences (CC3) or objects constructed in territories with complicated engineering-geological and technogenic conditions or in relation to the estimated part of the project documentation of facilities constructed at the expense of state funds if their estimated cost exceeds UAH 300 thousand.

The State Fiscal Service of Ukraine in its Individual Tax Advice “On Determining the Calculation of Settlement of Cash Transactions for the Implementation of the Reimbursable Financial Assistance Agreement” of 05.09.17, No. 1803/С/99-99-14-05-01-14/ІПК clarified that the issuance of reimbursable financial assistance in cash through the cash office of the enterprise should be attributed to cash payments.

This means that there will be restrictions on cash payments. Consequently, the company can provide the financial assistance through cash to:

• individual − in the amount not more than UAH 50 thousand per one day;
• legal entity or entrepreneur − in the amount not more than UAH 10 thousand per one day.

According to the representatives of the fiscal department, the return of the financial assistance provided to an individual does not fall under the provisions of the Regulations on cash transactions. But the cash limit works in both directions. That is, when receiving a back financial aid provided, the company must also comply with the maximum allowable cash payments.

Financial Markets

The National Bank of Ukraine by its Resolution “On Amending Certain Legal Acts of the National Bank of Ukraine” of 07.09.17, No. 88amended the regulations governing the granting of loans by international financial organizations (hereinafter − IFO). The changes are aimed at simplifying the procedure for obtaining such loans. In particular:

• loan agreements in foreign currency with IFO are exempted from registration in the National Bank;
• possibility of attracting loans from IFO under contracts with special terms (the currency of the loan is defined in hryvnias, and transactions are in the currency).

The National Bank of Ukraine by its Resolution “On Amendments to the Regulation on the Identification of Bank-Related Persons” of 15.09.17, No. 91 obliged banks to notify individuals and legal entities in writing about their recognition as persons associated with the bank. The message must be sent no later than the next working day after the day the persons are granted such status. The NBU has determined that the persons associated with the bank can not be:

• Ukraine country;
• local community;
• an international financial institution with which the Government of Ukraine has concluded an agreement on cooperation and for which, in accordance with the laws of Ukraine, privileges and immunities have been established;
• legal entities that have a significant participation of the state, a territorial community or an international financial institution for which privileges and immunities are established.

It should be recalled that a related person − an individual who, due to his/her official status, family ties or property status, is related to the activities and management of the bank, and also

may receive certain material benefits in the process of performing the functions of the bank.

The National Bank of Ukraine by its Resolution “On the Publishing of Individual Information on the Activities of Banks of Ukraine” of 31.08.17, No.  85 confirmed that starting from 01.09.17 it would publish monthly on its website information on individual indicators of banks activity in the section “Statistics”, namely:

• turnover balance for the reporting month - to the 30^th day of the month following the reporting period, for December − to February 7 of the next year;
• turnover balance  taking into account the corrective postings for the reporting year − to April 30, the year following the reporting one;
• structure of loans granted to individuals and business entities by classes (in accordance with the Regulation on the determination by banks of Ukraine of the amount of credit risk under active banking transactions) for the reporting month − to the 30^th day of the month following the reporting period, for December − to  February 7 of the following year;
• distribution of loans to economic entities by type of economic activity (annually) − to February 7, the year following the reporting period.

This innovation will allow clients and investors to more fully assess the financial position of individual financial institutions, make informed decisions about their cooperation, in particular regarding the placement of deposits. Disclosure of information will also ensure greater transparency of the activities of individual banks and the banking sector as a whole.

The National Securities and Stock Market Commission (hereinafter − NSSMC) by its Resolution “On Amendments to Certain Regulatory Acts of the National Commission on Securities and Stock Market (regarding the improvement of the procedure for registration of issue of shares)” of 14.07.17, No. 529 approved changes to the by-laws that regulate the procedure for registration of the issue of shares.

The main innovation is the abolition of the imprint of the seal as a mandatory requisite for all documents submitted for registration of the issue of shares. In addition, to certify copies of such documents, now only the signature of the authorized person is sufficient.

It should be recalled that since 19.07.17 the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on the Use of Seals by Legal Entities and Individual Entrepreneurs” came into force from 23.03.17, No. 1982-VIII, which abolished the requirements for mandatory use of seals and the need for their use in business relations with state bodies and local government bodies.

Labor and Salaries

The Ministry of Finance of Ukraine by its Order “On approval of the Amendments to the Regulation on business trips within Ukraine and overseas” of 28.07.17, No.  669 amended the Regulations on business trips, approved by the Ministry of Finance “On Approval of Regulation on business trips within Ukraine and overseas” of 13.03.98, No.  59.

From now on, an employee who has applied a payment card for making settlements in a non-cash form, will be reimbursed the fee for the transfer of funds by electronic means if there is a documentary proof of its payment.

Managers of a company can impose additional restrictions on the amounts for the payment of the cost of services for the implementation of online order and the purchase of electronic travel documents for vehicles.

It is also specified that expenses for business trips are reimbursed only if there are original documents certifying the cost of these expenditures, namely:

• transport tickets or accounts (baggage receipts), including electronic tickets in the presence of a boarding pass, if it is mandatory for the appropriate type of transport, and settlement documents for their purchase;
• accounts received from hotels (motels) or from other persons providing services for the accommodation and residence of the employee in a business trip, including reservation of places in places of residence;
• insurance policies, etc.

The reason for the reimbursement of the cost of the purchase of the ticket is en electronic boarding pass printed on a paper carrier, obtained in the case of online registration for the flight. And if it is lost, then with the permission of the manager (or the person with whom the trip was agreed), the cost of purchasing an electronic ticket may be reimbursed, provided the original of the air carrier certificate is provided, which certifies the status of the order and the status of the ticket purchased for the individual passenger, the fact of using the ticket completely on a certain route.

In case of purchase via the Internet of electronic tickets for bus passenger transportation, the basis for the reimbursement of expenses for the purchase of an electronic ticket will be travel document printed on a paper carrier.

The Ministry of Social Policy of Ukraine in its letter “On the application of restrictions on the calculation of assistance for pregnancy and childbirth and assistance for temporary disability” of 18.05.17, No. 254/0/86-17/273 reported: if a woman on maternity leave has less than six months of work experience for the past 12 months, then the amount of pregnancy and maternity benefits per month should not exceed twice the size of the monthly salary (as of the month of the occurrence of the insured event). At the same time, the upper limit of the average daily salary is determined by dividing the double minimum wage on the average monthly number of calendar days (by 30,44). At the same time, if the amount of assistance calculated under such average wage for a certain month will still be more than double minimum wage (it is possible for months, which are 31 days), then its size should be reduced − to limit be the specified indicator.

The Ministry of Social Policy of Ukraine by its letter “On providing explanations regarding the maternity leave until the child reaches the age of three” of 25.08.16, No. 437/13/116-16 reported: the maternity leave until the child reaches the age of three could be used in full or in part by the father of a child, grandmother, grandfather or other relatives who are actually caring for a child (part seven of Art. 179 of the Labor Code of Ukraine, hereinafter − Labor Code). The current legislation does not include the term “other relatives who are actually caring for a child”, therefore the employee can arrange a leave to care for the child of her niece at will. At the same time, the agency notes that she should confirm the fact that she actually carries out of the child, in addition to the application for the leave provided for in part 1 of Art.181 of the Labor Code.

It should be recalled: part 4 of Art. 20 of the Law of Ukraine “On Leaves” of 15.11.96, No. 504/96-ВР stipulates that the relatives caring for the child, the said leave is provided on the basis of a certificate from the place of work (education, service) of the mother of the child that she went to work before the expiration of this leave. The legislation does not require any other documents for taking leave for the care of the child by her relatives, except for the certificate and application.

The Ministry of Social Policy does not explain how exactly an employee should prove the fact of caring for the child of her relative.

Land Relations

The Cabinet of Ministers of Ukraine by its Resolution “On Certain Issues of Implementation of the Pilot Project on the Implementation of Electronic Land Tenders and the Provision of Data Storage and Protection during their Implementation” of 21.06.17, No. 688 approved the Procedure for the implementation of the pilot project on conducting electronic land tenders. On September 2, 2017, approbation of electronic tenders through the system of electronic land tenders has already taken place. Thus, according to the document, from October 01 to June 20, 2018 it will be possible to rent a land plot or issue perpetual lease at an electronic tender. An individual or legal entity registered in the system of electronic land tenders may be involved in the auction. Lot at the auction is the right (lease, emphyteusis) on the land plot of agricultural purpose state property.

Summary of Court Rulings

The Supreme Administrative Court of Ukraine in its ruling of 06.09.17 in the case No. K/800/5707/17 came to the conclusion that the debtor, who received an additional benefit in the form of forgiveness (cancellation) of the principal amount of the debt on the loan and which was duly informed about forgiveness of such a debt, must reflect the canceled amount of debt in the taxable income and transfer the income tax to the budget.

The reason for such a conclusion is sub-para. “д” of para. 164.2.17 of TCU, according to which the amount of debt, forgiven (canceled) by the creditor on his/her own decision, not related to the bankruptcy procedure, before the expiration of the limitation period, are included in the income of the debtor, if it exceeds 25% of one minimum wage (calculated per year), established on January 1 of the reporting tax year.

In addition, the creditor (that is, the bank), which forgave the debt, should include the amount of the canceled debt to the tax calculation for f. № 1ДФ on the basis of the reporting period, in which such a debt was forgiven.

Consequently, even if the bank forgives the part of the debt to the lender, as it happened in the considered situation, the amount of the canceled debt is for the debtor an additional benefit with all the consequences. The debtor independently pays a tax on such income and reflects them in the annual tax return.

The Other Things

The President of Ukraine signed the Law of Ukraine “On Education” of September 5, 2017, No. 2145-VIII, which introduces significant changes in the life of educational institutions, educators, schoolchildren, students. This is reported on the official website of the Head of State.

According to the new law, educational institutions will be obliged to publish on their sites estimates and financial reports on the receipt and use of all funds received. This, among other things, will allow parents to monitor on what needs the school spends provided money.

The school period will last for 12 years. Generally, it will be a three-level school: primary, basic and profession-oriented secondary education. And the latter will have appropriate orientations that will enable senior students to choose the direction of learning according to their skills, rather than learning everything and anything.

The Law on Education establishes a number of guarantees for raising wages, as well as various allowances and surcharges for educators.

The Ministry of Social Policy of Ukraine issued an order “On Approval of the Procedure for Compensation to Citizens Affected by the Chernobyl Disaster, costs for treatment in health care facilities in the territory of Ukraine, the purchase of drugs not in such institutions, medical products, prosthetics, except dental prosthesis with precious metals and metal ceramics” of 26.07.17, No. 1211 approved the Procedure for reimbursement to citizens who suffered as a result of the Chernobyl disaster, the cost of treatment in health facilities on the territory of Ukraine, the purchase of drugs not in such institutions, medical products, prosthesis, except dental prosthesis precious metals and metal ceramics. This Procedure, in particular, expanded the list of documents (from 3 to 8) necessary for the reimbursement of expenses for treatment, as compared with its predecessor − Procedure for compensation to citizens who suffered as a result of the Chernobyl disaster, expenses for treatment in health care facilities in the territory of Ukraine, purchase of drugs not in such institutions, medical products, prosthetics, except dental prosthesis with precious metals and metal ceramics, approved by order of the Ministry of Social Policy of Ukraine dated May 29, No. 319.

Affected citizens are also entitled to file applications for reimbursement of treatment costs during the year after the end of hospital treatment.