Legislative news digest: LEGAL HOTLINE 31.01.2019

Pilot Project “Single Account” Has Been Launched

On January 23, 2019, a pilot project of a single treasury account for crediting customs payments was launched, which would allow business representatives:

• to reduce the time for customs clearance of goods;
• to freely choose a place of customs clearance, as the funds will be accounted for in the same card – the personal account of the subject of foreign economic activity;
• to use these funds during customs clearance of goods at any customs office;
• to optimize finances, because during customs clearance of goods in several customs offices the need to transfer funds to deposit accounts of many customs will be eliminated. It will also save time to refund these funds in case a place of customs clearance is changed.

By February 17, 2019, testing of a single account will be held only for Kyiv City and regional customs, from February 18 to March 15, it will be held at all customs offices of Ukraine, and from April 16, this year, a single account will be used by all enterprises mandatorily.

The decision to introduce a single account for crediting customs payments was made in 2017 and approved by Order of the Ministry of Finance of Ukraine No. 898 “On Approval of the Procedure for Transferring Customs and Other Payments Made Prior/or during Customs Clearance to the State Budget” dated November 01, 2017.

New Form of Real Estate Tax Declaration

On January 18, 2019, Order of the Ministry of Finance of Ukraine No. 897 “On Introducing Changes to the Tax Declaration Form for Real Estate Other than Land” dated November 15, 2018, came into force, updating the Real Estate Tax Declaration Form.

The new Declaration Form consists of a Tax Declaration and two Appendices for the calculation of tax liabilities separately, namely: for objects of residential and non-residential real estate.

The indicated innovations should ensure the convenience for business entities to declare tax liabilities pertaining to residential and non-residential real estate objects, especially when filing correction declarations.

Free Trade Agreement with Israel Has Been Signed

On January 21, 2019, Free Trade Agreement between Ukraine and Israel was signed.
The document provides for, in particular, the cancellation of import duties for about 80% of Ukrainian industrial goods and the cancellation of about 70% of import duties on Israel industrial products.

Besides on January 01, 2019, Ukraine became a member of Pan-Euro-Med, which allows to create the EU-Ukraine-Israel free trade triangle. Ukrainian producers will be able to import raw materials from Israel, recycle them in Ukraine and export at preferential rates to the EU.

Amendments to the Convention on Avoidance of Double Taxation between Ukraine and Switzerland

On January 24, 2019, the Protocol on Amendments to the Convention between the Government of Ukraine and the Swiss Confederation for the avoidance of double taxation with respect to taxes on income and capital was signed.
Changes will allow to avoid double taxation of individuals and legal entities income generated within the territories of both countries by:

• the distribution of the right to tax certain types of income between Ukraine and Switzerland, depending on their place of origin;
• taking into account in the taxpayer’s tax obligations in one state the amounts of taxes paid in the territory of another state.

The signed Protocol provides for, in particular:

• an increase in the interest and royalties income tax rate – from 0% to 5%;
• an addition of the new article on the improvement of mutual agreement procedure (the resolution of tax disputes) through arbitration;
• a new version of the article on the exchange of information, which provides for a significant expansion of the Contracting States’ ability to exchange tax information without reservations regarding the requirements of national tax interest or banking secrecy.

Following the signing of the Protocol, Ukraine and Switzerland should implement the internal procedures necessary for ratification of the Protocol.

Will a Moratorium on Land Sale Happen?

On January 23, 2019, the First Vice Prime Minister of Ukraine signed the Conclusion of the Ministry of Economic Development on the Law of Ukraine No. 2666-VIII, which continues the ban on the alienation of agricultural land until January 01, 2020. In its Conclusion, the Ministry of Economic Development proposes to the President of Ukraine to apply the veto right.
The Ministry of Economic Development is referring, in particular, to assessments made by the World Bank and the Center for Economic Strategy, according to which the introduction of the land market would create opportunities for the growth of Ukraine’s GDP, which would attract additional investment and develop the agricultural sector.
It should be noted that the abolition of the moratorium on the sale of agricultural land does not open the land market, since the Law on the circulation of agricultural land has not yet been adopted.

Income and Tax Information Online

The State Fiscal Service of Ukraine introduced a new electronic service “Obtaining information from the State Register of Individual Taxpayers on the Amounts of Income Paid and Taxes Withheld in Electronic Form with the Use of Electronic Digital Signature”.
In order to obtain the relevant information, an individual taxpayer may generate a request using the “Customized Client Software for Generating and Submitting Reports/Queries to the “Single Window of Electronic Reporting”, which is posted on the SFS official web portal and is publicly available for use.
The benefits of innovation are significant savings in time and the ability to receive the necessary information by e-mail at any time.