Legislative news digest: LEGAL HOTLINE 09.01.2017

ADDITIONAL CHANGES FOR THE INTRODUCTION OF ESCROW ACCOUNTS ENTERED INTO FORCE

On December 30, 2017, the Resolution of the Board of the National Bank of Ukraine (NBU) No. 147 of December 28, 2017 entered into force. In particular, this Resolution:

• Stipulates that foreign investors are entitled to use escrow accounts to make any foreign investments in Ukraine (purchase/sale real estate, corporate rights, securities, etc.);

• Defines the simplified procedure for the purchase of foreign currency for operations on the return of foreign investments because of the sale of shares by a foreign investor under the “squeeze-out” procedure;

• Established the possibility for the authorised banks to grant export credits in foreign currency to foreign buyers of Ukrainian goods.

THE MORATORIUM ON INSPECTIONS WAS EXTENDED THROUGHOUT 2018

The moratorium on conducting scheduled state supervision (control) activities in the field of economic activities by the state supervision (control) authorities was extended until December 31, 2018.

Also, the list of grounds for conducting unscheduled state supervision (control) activities was supplemented by the following:

• In the occurrence of an event that has a significant negative impact (in accordance with the criteria approved by the Cabinet of Ministers of Ukraine (CMU) on the rights, legitimate interests, human life and health, environmental protection, and national security;

• To verify an economic entity’s compliance with the prescriptions, orders, or other executive documents concerning the elimination of violations of legislative requirements issued by the state supervision (control) body based on the results of the preliminary activity.

FURTHER AMENDMENTS TO THE TAX CODE OF UKRAINE (TCU) ENTERED INTO FORCE

On January 1, 2018, the Law of Ukraine “On Amendments to the Tax Code of Ukraine and Certain Legislative Acts of Ukraine on Ensuring the Balance of Budget Revenues in 2018”, No. 2245-VIII of December 7, 2017, entered into force.

The most important changes introduced by this Law are as follows:

• It is established that the registration of the tax invoice/settlement adjustment in the Unified Register of Tax Invoices (URTI) may be terminated in the manner and on grounds determined by the CMU. As from January 1, 2018, the registration of tax invoices/settlement adjustments is not to be carried out prior to the respective Government decision;

• Payers, who will import industrial equipment for production needs to the customs territory of Ukraine by January 1, 2020, will have the right to a 24-month instalment payment of import VAT;

• The rules on the tax consequences of the transition from the simplified system to the general system for tax payers of the fourth group were clarified;

• It includes the provision stipulating that single tax payers shall pay a repatriation tax in the event of payments to a non-resident;

• It is defined that if the tax authority fails to send an individual a notification-decision about paying the real estate tax within the term established in the TCU, such individual will be exempted from liability for the late payment of the tax due.

THE NEW LIST OF STATES, OPERATIONS WITH RESIDENTS THEREOF ARE CONTROLLED, IS ESTABLISHED

On January 1, 2018, the CMU’s Resolution No. 1045 of December 27, 2017 “On Approval of the List of States (Territories) that Meet the Criteria Determined in Subclause 39.2.1.2 of Subparagraph 39.2.1 of Paragraph 39.2 of Article 39 of the Tax Code of Ukraine” entered into force.

According to this Resolution, the list included 85 countries (territories), such as Guadeloupe, Guatemala, French Guiana, the Commonwealth of Dominica, the Dominican Republic, Estonia, Iran, Cuba, Laos, Latvia, Lebanon, Mauritius, Malta, Morocco, Monaco, the UAE, Singapore, Georgia, and Hungary.

THE MORATORIUM ON SALE OF LAND WAS EXTENDED UNTIL 2019

On December 31, 2017, the Law “On Amendments to Section X “Transitional Provisions” of the Land Code of Ukraine” entered into force.

The document extended the moratorium on sale or otherwise performed alienation of agricultural land by one year (until January 1, 2019).

THE PRESIDENT SIGNED THE LAW ON SIMPLIFYING BUSINESS OPERATIONS

On January 5, 2018, the President signed the Law of Ukraine No. 2210-VIII “On Amendments to Certain Legislative Acts of Ukraine on Simplifying Business Operations and Attracting Investment by Issuers of Securities”.

The most important changes are as follows:

• The requirement to indicate the type of joint-stock company in its name was cancelled;

• It is determined that only issuers, securities thereof are listed on the stock exchange (included in the stock exchange register) as of January 1, 2018, will be considered public. All other JSCs will be automatically recognised as private ones;

• The procedure and the scope of disclosure of specific information were elaborated, and the categories of such information for public and private JSCs were differentiated;

• The requirement for banks to carry out their activities only in the form of public joint-stock companies (PJSCs) was abolished; however, they got more significant requirements for the corporate governance, than other PJSCs, in particular, as regards the formation of the supervisory board and its committees.

THE REQUIREMENTS FOR THE FORMAT OF THE IDENTIFICATION NUMBER OF CONFORMITY MARK WERE CLARIFIED

On January 04, 2018, the CMU’s Resolution No. 1027 of December 20, 2017 “On Amendments to Paragraph 3 of the Rules and Conditions for Marking the Conformity with Technical Regulations” entered into force.

According to this Regulation, the conformity mark must be accompanied with the identification number of the designated conformity assessment authority (if such an authority was involved at the stage of production control) in the following format: UA.TR.YYY, or YYY, where:

UA – the identifier of Ukraine in Latin letters;

TR – the identifier meaning that the conformity assessment authority was designated to assess the conformity with technical regulations;

YYY – the identification number of the designated conformity assessment authority.

The identification number of the designated conformity assessment authority is to be affixed by such authority or, on its instruction, by the manufacturer or its authorised representative.