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Legal Hotline 8/12/2017

LEGAL HOTLINE . 12 December 2017

The Law of Ukraine “On the state budget of Ukraine for 2018” was adopted

The period for tax invoice registration and tax credit representation was extended

The moratorium on the alienation of agricultural land was extended until 2019

The Verkhovna Rada of Ukraine adopted the amendments to the Tax code

Contacts

Iryna Kalnytska

Сounsel, Head of tax practice, Attorney at law

Vladyslav Dubrovskiy

Junior Associate

THE LAW OF UKRAINE “ON THE STATE BUDGET OF UKRAINE FOR 2018” WAS ADOPTED

The Law stipulates the following rates for the amounts of the minimum subsistence level and the minimum wage for 2018.

The minimum subsistence level and related payments:

Major demographic and social groups of the populationAs of January 1As of July 1As of December 1
Overall rateUAH 1,700UAH 1,777UAH 1,853
Children under 6 years of ageUAH 1,492UAH 1,559UAH 1,626
Children from 6 to 18 years of ageUAH 1,860UAH 1,944UAH 2,027
Able-bodied personsUAH 1,762UAH 1,841UAH 1,921
Disabled personsUAH 1,373UAH 1,435UAH 1,497


The minimum wage:

  • The monthly amount: as of January 1 – UAH 3,723 (as of today – UAH 3,200);
  • The hourly rate: as of January 1 – UAH 22.41 (as of today – UAH 19.34).


THE PERIOD FOR TAX INVOICE REGISTRATION AND TAX CREDIT REPRESENTATION WAS EXTENDED

On December 3, 2017, the Law of Ukraine “On Amendments to the Tax Code of Ukraine Regarding the Stabilisation of Settlements on the Wholesale Electricity Market of Ukraine” entered into force.

This Law grants all VAT payers the right to register tax invoices / settlement adjustments (hereinafter referred to as “TI/SA”) drawn up as from July 1, 2015, without any limitations within the period of 365 calendar days. Herewith, it establishes a fine of 50% of the amount of VAT indicated in the tax invoice registered in violation of the deadlinefor 366 calendar days or more.

Also, the period during which a buyer has the right to ascribe the VAT amounts from the registered tax invoice to the tax credit has been extended (from 365 to 1095 days).


THE MORATORIUM ON THE ALIENATION OF AGRICULTURAL LAND WAS EXTENDED UNTIL 2019

On December 7, 2017, the Verkhovna Rada of Ukraine adopted as a whole the draft Law No. 7350. This draft Law stipulates the extension of the moratorium on the purchase and sale and otherwise performed alienation of plots of agricultural land, as well as on the introduction of the right to land share to the authorised capital of economic associations.

The said moratorium is set until the entry into force of the Law of Ukraine on the circulation of agricultural lands and cannot be terminated until January 1, 2019.


THE VERKHOVNA RADA OF UKRAINE ADOPTED THE AMENDMENTS TO THE TAX CODE

On December 7, 2017, the Verkhovna Rada of Ukraine adopted the draft Law No. 6776-d “On Amendments to the Tax Code of Ukraine (hereinafter referred to as “TC of Ukraine”) to Ensure the Balance of Budgetary Revenues in 2018”.

The main amendments envisaged by the draft Law are as follows:

1) Changing the procedure for stopping the TI/SA registration. In particular, it is established that the registration of TI/SA in the Unified Register of Tax Invoices (URTI) can be stopped in the order and on the grounds defined by the Cabinet of Ministers of Ukraine. As from January 1, 2018 and until the Government makes the respective decision, the registration of tax invoices/settlement adjustments shall not be stopped;

2) Introduction of the norm, according to which tax invoices/settlement adjustments, registration thereof in the URTI was stopped, will be registered as from 2, 2018, except for:

  • TI/SA, for which no explanations and documents were submitted as of December 01, 2017;
  • TI/SA, for which the decision to deny registration was made, and as of December 01, 2017, no procedure for administrative or judicial appeal was initiated;

3) Indexation of tax rates set in absolute values, namely:

  • Increase of ecological tax rates, taking into account the consumer price index, by 11.2%;
  • Increase of rental rates for subsoil use for the purposes not related to the extraction of mineral resources, rent for the special use of water, and rent for the special use of forest resources, taking into account the producer price index, by 16.8%;

4) Establishment of the schedule for increasing the specific excise tax rates on tobacco products and the minimum excise tax obligation to pay the excise tax on tobacco products in 2018 and subsequently by 2025 – by 20% annually until a minimum EU standard (i.e., EUR 90 for 1000 pieces) is achieved;

5) Changing the criteria for a taxpayer belonging to the category of large taxpayers. There were increased:

  • The indicator of payments made to the state budget based on payments controlled by the SFS – from UAH 20 million to the equivalent of EUR 1 million, in which the amount of taxes, duties, payments, other than customs duties, exceeds the equivalent of EUR 500 thousand;
  • The criterion of the level of income from all activities for the last four consecutive tax (reporting) quarters – from UAH 1 billion to the equivalent of EUR 50 million.

Please note that the above information is based on the text of the official draft Law, but the text of the Law may partially differ.

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