Legislative news digest: LEGAL HOTLINE 10.05.2018

National bank implements changes to individual license issuing order

On April 28, 2018 the Resolution of the National Bank of Ukraine No. 45 dated April 26, 2018 came into force, which, among other, amended the Regulation on the Procedure for Issuance by the National Bank of Ukraine of Individual Licenses for the Placement by the Residents (Legal Entities and Individuals) of Foreign Exchange Assets in Accounts Outside Ukraine, approved by the Resolution of the Executive Board of the NBU No. 485 dated October 14, 2004.

Among the positive changes the following can be noted:

• reduction of the list of documents submitted for obtaining a license by the applicant (legal entity, individual entrepreneur);
• expansion of the list of sources of exchange assets receipt, which the license holder (legal entity / individual entrepreneur) is allowed on the basis of a license to be credited to/from an account opened outside Ukraine;
• definition of the source of funds of the individual (the applicant), including funds, which are the joint property of the spouses. With the above taken into account, the list of documents confirming the availability of source of funds of the individual (the applicant) has been expanded.

In general, the changes adopted are intended to facilitate the improvement of the procedure for issuing individual licenses.

The State fiscal service of Ukraine in its letter has given explanation regarding the recognition of operations as controlled in the 2018 reporting year

On May 02, 2018, the SFS on its website published a letter No. 12908/7 / 99-99-15-02-01-17 “On the entry into force of the Resolution of the Cabinet of Ministers of Ukraine dated January 31, 2018, No. 108”, in which it was recalled that taking into account the entry into force of this resolution in case of realization of economic transactions with non-residents registered in Georgia, the Republic of Estonia, the Republic of Latvia, the Republic of Malta or Hungary in 2018, in the absence of other criteria specified in subpoints “a”, “b”, “d”, ”e” of subpara 39.2.1.1 of para 39.2.1 of clause 39.2 of Art. 39 of the Tax Code of Ukraine such transactions will be recognized as controllable in case of simultaneous fulfillment of such conditions:

• the annual income of the taxpayer from any activity determined by the rules of accounting exceeds is UAH 150 million (net of indirect taxes) for 2018 tax (reporting) year;
• the volume of business transactions of the taxpayer with such a counteragent (determined according to the accounting rules), carried out in the period from 01.01.2018 to 06.03.2018, exceeds UAH 10 million (net of indirect taxes).

This State Fiscal Service letter also provides some illustrative examples of the recognition of such operations in 2018.

National bank of Ukraine defines credit registration functioning order

On May 06, 2018 the Resolution of the Board of the NBU No. 50 dated May 04, 2018 “On Approval of the Regulation on the Credit Register of the National Bank of Ukraine” came into force. The approved Regulation, among other, determines the following:

• the procedure for providing information to the Credit Register by the Bank / Deposit Guarantee Fund of individuals or an authorized person of the Fund;
• the procedure for providing information to banks from the Credit Register;
• the procedure for obtaining information from the Credit Register by the applicant (legal entity / individual), and correcting such information in case of disagreement of the applicant with the information contained regarding them in the Credit Register.

It is necessary to recall that the information on loan operations should be included in the Credit Register if the amount of debt (in principal and interest) for such loan operations is equal to or exceeds 100 times the minimum wage (or equivalent of this amount in foreign currency at the official exchange rate of the National Bank set on the first working day of the month following the reporting period).

The specified Credit Register was created in place of the existing Unified Information System “Register of Borrowers”, which, in particular, provides for the list of clients of Ukrainian banks who have overdue debt to banks. Taking into account the Regulation adopted by the NBU Board, the Credit Register should start working in the short time.

National bank of Ukraine cancelling currency restrictions

From May 01, 2018, temporary administrative restrictions for banks and businesses were canceled. Corresponding changes are envisaged by the Resolution of the National Bank of Ukraine No. 31 dated March 29, 2018, and by the Decision of the National Bank of Ukraine No. 184-rsh dated March 29, 2018 “On the establishment of limits for an open currency position of the bank”, in particular:

• the possibilities of banks for conducting own operations with foreign currency on the interbank market have been expanded. The requirement for the amount of the authorized balance of purchase-sale by banks of foreign currencies and bank metals within one business day is canceled. Therefore, sanctions for its violation have also been abolished;
• the limits of the open currency position (L13-1) for banks have been changed. Starting from May 1 of this year it will be increased from 1% to 3%, the limit of the general short open currency position of the bank (L13-2) – decreased from 10% to 8%. This will allow banks to more effectively distribute currency risks;
• the restrictions on early repayment by Ukrainian companies of foreign loans and loans in foreign currency are loosened;
• the list of operations of the business, the receipt of which is not subject to the requirement for mandatory sale was expanded;
• the procedure for the conversion of foreign currency abroad to make payments related to litigation is simplified for business.

Adoption of these changes is another step aimed at the gradual liberalization of the Ukrainian currency market.

Position of the Supreme Court regarding the payment of personal icome tax after salary payment on the same day

The position of the Supreme Court in the case No. P/811/618/17 on liability of the taxpayer in the event of payment of personal income tax after payment of salary to employees (on the same day) was recently publicized.

In such cases, fiscal authorities, as a rule, apply sanctions to the taxpayer provided for in Art. 127 of the Tax Code of Ukraine, which establishes liability for non-accrual and non-payment and/or non-transfer of taxes by the taxpayer before or during the payment of income in favor of another taxpayer.

At the same time, the Supreme Court found that the specified norm establishes the measure of liability, which is imposed on the taxpayer, including the tax agent, specifically for non-accrual, non-payment and/or non-transfer of taxes, before or during income payment in favor of another taxpayer. Instead, when there is an accrual, but the timely payment by the taxpayer of an agreed amount of monetary obligation within the timeframe provided for in the Tax Code of Ukraine, such taxpayer is brought to justice in accordance with Art. 126 of the said Code (violation of the rules for payment (transfer) of taxes). With that, the size of such a sanction depends directly on the delay time of such payment.

Thus, in the case of paying the personal income tax after the payment of salary, the liability of the taxpayer can be applied to the taxpayer particularly by Art. 126, and not by Art. 127 of the Tax Code of Ukraine, and therefore the indicated actions of the tax authorities are unlawful.