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Certain changes in payments to non-residents and other clarification from Ukrainian state authorities


Author: Iryna Kalnytska
Source: TaxLinked

The National Bank of Ukraine has recently unified the procedure for making payments to non-residents. The respective amendments were introduces by the NBU Resolution No. 593 dated 9 September 2015 (hereinafter referred to as "the Resolution") that became effective on 10 September 2015.

According to the provisions of the Resolution, all payments in the national currency in favor of non-residents shall be governed by the requirements similar to the requirements to the payments in the national currency.

In particular, the Resolution unified the procedure for the remittance of funds in the Ukrainian Hryvnia to the correspondent accounts of non-resident banks on behalf of resident clients under agency transactions according to agreements between residents and non-residents. As a first step, the banks authorized to process such transactions shall be obliged to debit the funds to a separate analytical account. As such, the funds will be transferred to the account of a non-resident bank not earlier than on the fourth business day after the entering by the authorized bank of all information on the planned transaction into the special registry of agency transactions on purchase or transfer of foreign currency abroad and provision of such information to the National Bank of Ukraine.

In addition, the above-mentioned transactions shall be prohibited if the funds in the Ukrainian Hryvnias are obtained by resident clients as loans.

The Ukrainian State Tax Service (STS) recently made public a guidance letters that clarify the tax treatment of assets imported as a nonresident's capital contribution.

In particular, the latter states that according to Article 287 of the Custom Code custom duties shall not apply to the goods that are imported to Ukraine for a period more than three years or as a nonresident's capital contribution. All other taxes and levies must be paid in accordance with the general established procedure and rules.

The STS also stated that the VAT base on imports of goods to Ukraine is the contractual value of the goods but that it cannot be lower than their established customs value as provided by Tax Code article 190, section 190.1.

However, if the assets that were imported as a contribution to a resident legal entity's capital are alienated before the expiration of three years period from the date they were recorded on the resident entity's balance sheet the custom duty shall be paid according to the standard rates alone with the VAT and relevant penalties for noncompliance with the requirements of the Custom Code.

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