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Ukraine: Amendments to Tax Code

On 7 July 2011, the parliament adopted a number of amendments to the Tax Code by way of Law No. 3609-VI which came into effect on 6 August 2011 (except for certain provisions, for which a different date is stated).

In general the Law includes many positive innovations though it doesn’t answer all the questions of taxpayers. Please note that the changes mentioned are not final because work on wording is still in progress.

We’d like to draw your attention to the issues most crucial for foreign business: IFRS

Taxpayers using IFRS shall use them in tax accounting as well. Starting from January 1, 2012 public joint stock companies, banks, insurance companies and companies listed by the Cabinet of Ministers of Ukraine must prepare financial statements in compliance with IFRS. All other legal entities use IFRS on voluntary basis.

Exchange rates

While importing goods with payment on delivery, their cost shall be restated into UAH at rate of the National Bank of Ukraine in force at date of purchase transaction, i.e. according to the accounting rules.

This innovation is retrospective, it shall be applied when determining income tax liabilities from April 1, 2011.

VAT payer registration

Legal entity with share capital or balance assets cost (fixed assets, intangible assets, stocks) exceeding 300 thousand UAH and not registered as a taxpayer under paragraph 181.1 Article 181 of Tax Code may voluntarily get registered regardless existance of taxable transactions and scope of goods/services supplied to other taxpayers.

VAT

Rendering of services to foreign and national vessels engaged in international transportation of passengers, their luggage and cargos are tax exempt if port charges are paid according to the Ukrainian legislation.

Tax exemption

Temporarily, for 10 years from January 1, 2011 tax exempt is income received from providing hotel services in five-, four- and three-star hotels including newly constructed/reconstructed/overhauled/restored.

Non-resident RO

Agents acting on behalf and in favor of a non-resident must withhold and transfer non-resident income tax, calculated under taxation rules for permanent ROs, to the budget. Herewith, it is not required to register additionally such RO with tax authorities. However, there is no obligation to administrate non-resident income tax, if residents carry out agent services within their usual activity.

For further information please contact Valeriy Bondar at This e-mail address is being protected from spambots. You need JavaScript enabled to view it  

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