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LEGAL HOTLINE 18.02.2021

Contents

  1. The government proposes to define the signs of Labour Relations at the legislative level
  2. The Cabinet of Ministers of Ukraine lifted the moratorium on conducting tax audits of businesses
  3. A mechanism for monitoring banks compliance with the legislation on consumer protection and advertising of Financial Services has been defined
  4. The President signed a law that exempts investments of more than 20 million Euros from taxes

The government proposes to define the signs of Labour Relations at the legislative level

The Cabinet of Ministers of Ukraine has submitted to the Verkhovna Rada of Ukraine draft law No. 5054, which proposes amendments to the Labour Code of Ukraine regarding the definition of the concept of Labour Relations and signs of their existence (”The Draft law”).

The draft law expands the concept of Labour Relations, and defines the following signs of their presence:

  1. personal performance of work under a specific qualification, profession, position by proxy and under the control of the person in whose interests the work is performed;
  2. regulation of the labour process, which is permanent and does not provide for the establishment of a specific result of work for a certain period of time;
  3. performing work at a certain or agreed workplace, in compliance with the internal labour regulations;
  4. provision of means for work (equipment, tools, materials) by the person in whose interests the work is performed;
  5. systematic payment of remuneration in cash and / or in kind;
  6. setting the duration of working hours and rest time;
  7. reimbursement of travel and other financial expenses related to the performance of work.

To recognize a relationship as an employment relationship, such a relationship will have to have three or more of these characteristics. According to the Draft law, the list of signs is not exhaustive, and depending on the specifics of the business, other signs of Labour Relations may be established that are not specified.

To re-register their contractual relations for employment, businesses are offered a three-month transition period. The Draft law is currently being worked out by committees of the Verkhovna Rada of Ukraine.

The Cabinet of Ministers of Ukraine lifted the moratorium on conducting tax audits of businesses

On February 9, 2021, Resolution of the Cabinet of Ministers of Ukraine No. 89 of February 03, 2021 (hereinafter referred to as the Resolution) came into force. The Resolution allows conducting such types of inspections of companies:

  • documentary and factual inspections that were initiated before March 18, 2020 and were not completed;
  • documentary scheduled inspections;
  • documentary unscheduled inspections of companies in the real sector of the economy that have formed a tax credit due to risky operations for the purchase of goods/services – based on receipt by the tax authorities of information about violations of the law and / or identification of false data in the tax return;
  • documentary unscheduled inspections, based on the receipt by the tax authorities of information about violations of the deadlines for the receipt of goods for import operations and/or foreign currency earnings for export operations;
  • other types of documentary unscheduled inspections, in particular on the grounds of violation of reporting requirements for controlled transactions and transfer pricing.

A mechanism for monitoring banks compliance with the legislation on consumer protection and advertising of Financial Services has been defined

On February 9, 2021, the National Bank of Ukraine approved Resolution No. 15 of the Board of the National Bank of Ukraine, which defines the procedure for monitoring banks’ compliance with the legislation on consumer protection of financial services (“the Procedure“).

The procedure provides for supervision by the National Bank of Ukraine in the form of supervision without on-site visits and inspections. The NBU will monitor the following information from banks:

  • information, contracts and documents posted in bank branches and websites;
  • advertising of banking and other financial services;
  • appeals of consumers of financial services, in particular appeals of companies, as well as complaints and applications (petitions) of lawyers in the interests of companies, to the NBU regarding violations of the legislation on consumer protection of financial services;
  • internal bank documents on consumer protection of financial services and advertising legislation;
  • information from open sources.

For violations by banks of the legislation on consumer protection of financial services, bank officials may be subject to administrative penalties, and the bank may be subject to penalties or measures of influence (for example, termination of certain types of operations or revocation of a license). The procedure came into effect on February 13, 2021.

The President signed a law that exempts investments of more than 20 million Euros from taxes

On February 10, 2021, the President of Ukraine signed the law “On State Support for Investment Projects with Significant Investments” (based on draft law No 3760) (“the Law“).

The law provides that state support for investment projects with significant investments, in particular, may provide for exemption of the investor: from income tax for 5 years, from VAT and duties on the import of new equipment.

One of the requirements for investment projects with significant investments, for the implementation of which the specified state support can be provided, is that the amount of investment during the project implementation period must exceed the amount equivalent to 20 million Euros. The term of implementation of an investment project with significant investments in accordance with the Law should not exceed 5 years.

The Law provides that state support can also be provided to an investor in the following forms:

  • granting the pre-emptive right to lease land plots of state and municipal ownership with the right to buy them out and with special conditions for land charge;
  • construction, reconstruction, restoration or major repairs of the infrastructure adjacent to the project at the expense of the state budget.

State support in accordance with the Law will not exceed 30% of the planned investment in the project.

Taras Lytovchenko

Taras Lytovchenko

Counsel, Attorney at law

  • Recognitions
  • Best Lawyers in Ukraine 2021
  • The Legal 500 EMEA 2019

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