Legislative news digest: LEGAL HOTLINE 07.03.2019

Enterprises will Be Able to Transfer Advance Payment Funds to a “Single Account” Only

From March 18, 2019, companies will be able to transfer advance payment funds to a “Single Account” only. The SFS customs accounts will be blocked for replenishment of advance payments by enterprises.

From March 18 to April 16, 2019, the balance of funds in the SFS customs accounts can be used for customs clearance of goods. Advance payment funds will be refunded to enterprises within the period of 1,095 days from the date such payments were deposited to the account in accordance with the Refund Procedure approved by the Ministry of Finance Order No. 643 “On Approval of the Procedure for Transferring to the State Budget Customs and Other Payments Made before/or at the Time of Customs Clearance” dated 18.07.2017 (as amended).
 

The VAT Payer Register Has Become Public

The SFS has completed the “Registers” menu of the Electronic cabinet in the part of uploading the VAT payers Register data in full.

Besides accessing to the data of the VAT payers Register, users of the open part of the Electronic cabinet have the opportunity to obtain a complete list of VAT payers, taking into account information on cancellation of VAT payers’ registration by their unloading.

A software interface (API) for automated uploading of a complete list of VAT payers has also been developed.

Export Duty on Scrap of Ferrous Metals Has Been Increased

The Verkhovna Rada has ensured the preservation of an effective mechanism that legally regulates scrap exports in order to reduce the deficiency of ferrous metals scrap on the domestic market with the priority to ensure the defense industry needs and to ensure the conditions for the infrastructure restoration.

On February 28, 2019, the relevant Law (draft No. 9474) “On Amendments to Section II “Final and Transitional Provisions” of the Law of Ukraine “On Amendments to Certain Laws of Ukraine on Reduction of the Deficiency of Ferrous Metals in the Domestic Market” was adopted. This Law, temporarily, for a period of 6 calendar years (instead of the current 3 calendar years), raised the rates of export duties on waste and scrap of ferrous metals up to EUR 58 per ton (instead of the current EUR 42 per ton). This Law shall come into force on the day following the day of its publication.

The MLI Convention Has Been Ratified by the Verkhovna Rada

The Verkhovna Rada has ratified the Multilateral Convention on the implementation of measures relating to Tax Agreements, in order to counteract the tax base erosion and profit shifting (hereinafter referred to as the Multilateral Convention MLI).

The necessity to conclude and ratify the Multilateral Convention MLI is justified by the fact that on January 01, 2017 Ukraine joined the enhanced cooperation program within OECD framework and committed itself to implementing the minimum standard of the Action Plan to counteract the tax base erosion and profit shifting (BEPS).

The ratification of the Multilateral Convention MLI will allow Ukraine to implement Step 6: “Avoiding benefit abuse under the Bilateral Agreements” and Step 14: “Improving the mutual coordination procedure by the dispute resolution” of the minimum standard of the BEPS Action Plan, which are mandatory for Ukraine, as well as to make simultaneous necessary changes in all existing international treaties of Ukraine on the avoidance of double taxation.

Responsibility for Illegal Enrichment Has Been Revoked, but It is Going to Be Returned

The Constitutional Court of Ukraine, by its Decision No. 1-p/2019 dated February 26, 2019, declared Article 368-2 of the Criminal Code of Ukraine pertaining to unlawful enrichment unconstitutional. The Court concluded that this provision does not meet the requirements of clarity, accuracy and unambiguousness, and therefore contradicts legal certainty as an integral part of the supremacy of law principle enshrined in Article 8 of the Constitution of Ukraine.

On February 28, 2019, the President of Ukraine registered Bill No. 10110 in the Parliament on the restoration of responsibility for illegal enrichment. In place of the revoked article, the Criminal Code of Ukraine is proposed to be supplemented by a new Article 368-5, which provides for a penalty for acquiring a significant amount of assets without the lawful grounds or transferring such assets by a person authorized to perform functions of the state or local self-government.