TAX ALERT 01.11.2024–20.11.2024 | Digest of key tax news

The draft law on updating the list of double tax treaties has been registered

On November 13, 2024, the draft law No. 0293, “On amendments to Article 1 of the Law of Ukraine ‘On the ratification of the Multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting’,” has been registered.

The suggested amendments actualize the list of notifications and reservations of the said Law in connection with the entry into force or termination of a number of international double tax treaties of Ukraine and protocols amending such treaties.

Among other changes, the amendments suggest to reflect in the Law the termination of double tax treaties with countries such as Belarus, Syria, and russia. Additionally, the convention with Cuba has been excluded from the list of treaties due to Cuba’s failure to complete the necessary domestic procedures required for the convention to enter into force.

Introduction of the export security regime

On November 6, 2024, the Cabinet of Ministers of Ukraine published Resolution No. 1261, dated October 29, 2024, “On the introduction of the export security regime”, which will take effect on December 1, 2024.

This Resolution temporarily introduces an export support regime for operations involving the export of specific goods defined in Article 19-2 of the Law of Ukraine “On Foreign Economic Activity” (the “Goods”) for the duration of martial law in Ukraine. These Goods include wheat and wheat-rye mixtures (meslin), barley, oats, corn, soybeans, sunflower seeds, and others.

The following new rules will apply to the export of Goods, in particular:

• export of the Goods is allowed only to registered VAT payers;
• export of the Goods at prices lower than the minimum export prices approved by the decision (order) of the Ministry of Agrarian Policy is prohibited;
• only a registered tax invoice gives the right to export of the Goods;
• only taxpayers with 80% or more of the currency return as of the date of the tax invoice apply a zero VAT rate; the rest will apply 14% or 20%.

As mentioned in our October news digest, the following measures have already been implemented to support this regime:

• approval of the procedure for determining minimum allowable export prices for certain agricultural products;
• updates to tax invoices and VAT reporting forms;
• updates to the procedure for maintaining the Unified Register of Tax Invoices;
• updates to the Procedure for blocking and registering tax invoices and adjustment calculations.

Excise tax reporting has been updated

On November 7, 2024, the Ministry of Finance of Ukraine issued Order No. 567, amending the excise tax return form (the “Return”) and the Procedure for its completion and submission (the “Procedure”), both approved by the Ministry’s Order No. 14 dated January 23, 2015. The updated order was published on the Ministry’s official website on November 8, 2024.

In general, the amendments align the Return and Procedure with the Laws of Ukraine dated June 29, 2023, No. 3173-IX, “On amendments to the Tax Code of Ukraine and other Laws of Ukraine regarding the introduction of electronic traceability for alcoholic beverages, tobacco products, and liquids for electronic cigarettes”, and February 23, 2024, No. 3603-IX, “On amendments to the Tax Code of Ukraine and other Laws of Ukraine to improve online communication with taxpayers and clarify certain legislative provisions”.

In particular, the Return has been updated to include the lines necessary to reflect the amount of excessive losses of ethyl alcohol, alcohol distillates, bioethanol, as well as excessive production losses of alcoholic beverages and the amount of excessive total losses and waste of fermented or unfermented tobacco raw materials.

In addition, Annexes 1, 2, 3 of the Return were revised.

The Order will come into force from the date of its official publication, except for the following clauses, which will be effective from January 1, 2026:

• the exclusion of Annex No. 5 from the Return, with Annexes No. 6, 6-1, 7–13 renumbered as Annexes No. 5, 5-1, 6–12, respectively;
• adjustments to the Procedure to reflect the removal of Annex No. 5 from the Return.

Review of Supreme Court practice in administrative cases for September 2024 has been published

On November 5, 2024, the Cassation Administrative Court of the Supreme Court published a review of current judicial practice for September 2024.

The review highlights the Supreme Court’s positions on several key issues, including:

• the use of tax information from the Data Accounting System of cash register transactions during on-site (actual) tax audits;
• discounting of accounts payable under loan agreements concluded with non-residents;
• exemption from liability for late fulfillment of tax obligations due to repeated shelling and destruction.