Taxes
VAT
The State Fiscal Service of Ukraine informed in its tax advice “On the date of occurrence of additional VAT obligations on goods delivery transactions in case the good delivery by a supplier to a buyer is carried out with involvement of shipping agent” No. 3793/6/99-99-15-03-02-15/ІПК of August 14, 2019 that during shipping of yet unpaid goods when the supplier does not determine VAT-liabilities by cash method, the date of occurrence of VAT-liabilities is the date of the beginning of goods delivery by the supplier:
- directly to the buyer;
- or to the company that will provide delivery of the goods to the buyer in any way (transportation, sending, etc.)
the confirmation of the date of the beginning of goods delivery (transposition) is the date indicated in d documents for goods transportation (transposition, sending).
Such documents are prepared according to art. 307 of the Commercial Code of Ukraine in due form with preparation of shipping documents given the type of transport that provides shipping.
Excise Tax
The State Fiscal Service of Ukraine explained in its individual tax advice “On receipt of individual tax advice regarding the necessity to register a company as an excise tax payer when conducting fuel sale transactions using smart cards (fuel cards)” No. 3987/6/99-99-15-03-03-15/ІПК of August 23, 2019 whether the company has to be registered as an excise tax payer in the case the company delivers the fuel cards to the shipping agent who provides shipping operations.
Since July 7, 2019 the transactions with fuel cards which do not entail physical transfer (release, dispatch) of fuel are not recognized as fuel sale transactions according to subparagraph 14.1.212 of the Tax Code of Ukraine (hereinafter – TCU). So, when delivering smart cards for fuel receipt to the shipping agent who provides shipping operations the company has no need to be registered as the excise taxpayer for such transactions and, respectively, to submit excise tax declarations according to item 232.2 of TCU.
The fiscal service official also stated that regarding the preparation and registration of excise invoices in the system of electronic administration of fuel and ethanol sale the excise tax payer is the gas station (hereinafter – GS), as based on smart card produced it provides physical transfer (release, dispatch) of fuel as recognized in subparagraph 14.1.212 of the TCU.
Unified Social Contribution
The Verkhovna Rada of Ukraine considered draft Law “On the Amendments to the Law of Ukraine “On Collection and Registration of the Single Contribution for Mandatory State Social Security” regarding Submission of Single Reports on Single Compulsory State Social Insurance Contribution and Personal Income Tax” (No. 1057)
Presenting this document, the head of the Committee on Finance, Tax and Customs Policy Danylo Hetmantsev informed that the draft was developed to provide further implementation of tax reform which is aimed, among other things, at the simplification and unification of reports preparation and submission by the taxpayers to the controlling authorities. In particular, the draft provides that the reports on the unified contribution and personal income tax will be combined that will reduce the number of reports submitted by the taxpayers – insurers (enterprises and self-employed persons).
Relevant committee recommended to adopt this draft with the comments made by the members of the Committee and all technical and legal amendments.
The Draft was adopted in first reading by 318 MPs. The term of preparation for the second reading are reduced by half.
In addition, the MPs adopted in the first reading the Draft Law “On amendments to the Tax Code of Ukraine on the Submission of a Single Statement on a Single Contribution to the Mandatory State Social Insurance and Personal Income Tax” (No. 1072).
Accounting and Reporting
The State Fiscal Service of Ukraine explained in its individual tax advice “On the accounting of fractional currency at the place of accounts management and making an advance” No. 3978/6/99-99-14-05-01-15/ІПК pf August 23, 2019 the procedure for fractional currency accounting at the place of accounts management.
The fractional currency received at the company’s pay office or left in the box of the payment transaction recorder (PTR) since the following day must be put through PTR using «service entry». It is related to the fact that the withdrawal of cash not related to the account management, if such withdrawal is performed after “Z-report” implementation prior to registration of first banking operation and (or) prior to conduct of “service entry” operation.
The “Z-report that reflects information of “service entry” operation” confirms that the respective sum was entered to the PRT as fractional currency.
Thus, in case the fractional currency is reflected in the PRT through “service entry” the report on its usage is not prepared. But if the fractional currency is handed over to the company’s pay office then the report is prepared and deposit form for the sum issued as fractional currency in the morning.
The fiscal officials also reminded that the business entities are not subject to the penalties provided for by the President of Ukraine Decree No. 436/95 of June 12, 1995 due to the loss of effect of the Decree.
Control and Responsibility
The State Fiscal Service of Ukraine will comply with the rules of the Ethic Conduct. The Order “On approval of the Rules of Ethical Conduct in SFS bodies” was signed by the Chief of the SFS Serhii Verlanov and published on the SFS web-site.
The Rules of Ethic Conduct laid down precise requirements for the etic conduct that must be met by the officials during the performance of their duties.
Indeed, the taxmen should conscientiously, competently, effectively and responsibly perform their duties, be impartial, and observe all generally recognized norms of ethic conduct and respect rights, freedoms and lawful interests of citizens.
Special attention was drawn to the prevention of corruption within the SFS bodies. For this purpose, the authorized persons on etic conduct issues who monitor the compliance with the Ethic conduct rules and provide explanations and consultations to the employees, will be designated, etc.
Document defines the actions that are taken by the service employee in case they question the lawfulness of the order issued by the head.
The rules are developed taking into consideration and in accordance to laws of Ukraine “On Civil Service”, “On Prevention of Corruption”, Resolution of the Cabinet of Ministers of Ukraine “On Approval of the Procedure for Conducting an Inquiry into Persons Authorized to Perform State or Local Government Functions and Persons Equated for the Purposes of the Law of Ukraine“ On Prevention of Corruption ”with Persons Authorized to Perform State or Local Government Functions” No. 950 of June 13, 2000 approved by the Order of The National Agency of Ukraine For Civil Services No. 158 of August 5, 2016.
Controlled Transactions
The State Fiscal Service of Ukraine in its individual tax advice “On recognition of transactions as uncontrolled” No. 64/6/99-00-05-05-01-15 of September 6, 2019 informed that the representative office which is not permanent doesn’t has to submit Report on controlled transactions.
If the tax audit of documents establishes that throughout the reporting (fiscal) period the representative office met all the criteria of permanent one, the business transactions with non-resident are recognized as controlled. The transactions are recognized as controlled as well in case all the conditions laid down in subpar. 39.2.1.7 of TCU are observed.
Such representative office will be responsible as VAT payer who conducted controlled transactions during reporting (fiscal) period but didn’t submit the Report on controlled transactions.
Financial Markets
The National Bank of Ukraine has informed on this official site that starting September 25, 2019 the banks have the right to round off the amounts of cash transactions. This decision was made considering the proposals by the banking community based on the requisition of coins of small denomination.
In particular, Ukrainian banks will be able to round off the amounts of cash transactions for each cash document under the grounds provided by the Ukrainian legislation, and in accordance with rules laid down in the item 4 of Regulation of the Board of the National Bank of Ukraine “On optimization of circulation of coins of small denomination” No. 25 of March 15, 2018.
The results of round off are other bank’s operational income/expenses.
Respective rules are contained on Regulation of the Board of the National Bank of Ukraine “On amendments to Regulation of the Board of the NBU No. 82 of June 20, 2019” No. 117 of September 24, 2019 that is effective of September 25, 2019.
Let us remind, that starting October 1, 2019 the small coins of 1, 2, 5 denomination won’t be used. So, all cash transactions must be conducted by the banks in amounts that are multiple of the smallest denominations in circulation which is 10 kopecks.
The round off of total amounts of cash payments for goods (works, services) in the cheque are made following such rules:
- the amount that end with 1-4 kopecks is rounded down to the nearest amount that end with 0;
The cashless transfers do not need round off.
Labor and Salaries
The State Labor Service of Ukraine answered the question “Can an employer insist on paying wages to employees through a specific banking institution?”.
According to requirement specified in p. 4 art. 24 of the Law of Ukraine “On Remuneration of Labor” the wages are payed to the employees at their workplace. Under written consent of the employee the payment can be made through banking institution, mail remittance to the specified account (address), which is paid for by the employer as provided by p. 5 art. 24 of the abovementioned Law.
According t art. 25 of the Law of Ukraine “On Remuneration of Labor” the legislation prohibits any restrictions of employees right to freely manage their salary, unless otherwise provided by law.
It follows from the above that the account and bank institution are provided by the employee, not the employer, as the employee is the owner of the bank account.
In addition, under art. 19 pf the Constitution of Ukraine, state legal order is based on the principles according to which no one can be compelled to do anything that is not provided by the law.
So, the employers have legal grounds to force the employee to receive the salary at the specific banking institution.
