TAX ALERT 01/07/2024 | digest of main tax news

Laws on special regime for export of grains and oilseeds and deferral of fines regarding CFC came into force

On 01.07.2024, the Law of Ukraine No. 3706-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on the Specifics of Export of Certain Types of Goods during the Period of Martial Law” and the Law of Ukraine No. 3707-IX regulating customs clearance of export of certain goods came into force. The Laws concern the export of grains and oilseeds. At the same time, it is important that until the date of introduction of the export support regime by the Cabinet of Ministers of Ukraine, the general VAT rules will apply to the abovementioned goods. In addition, Law of Ukraine No. 3706-IX postponed the enforcement of liability for violations related to reporting on controlled foreign companies for the period of martial law and six months after its termination. For more details on the novelties, please see GOLAW’s Tax Alert by the link.

The statute of limitations for withholding tax audits has been extended

On 01.07.2024, the Law of Ukraine No. 3721-IX “On Amendments to the Tax Code of Ukraine and the Law of Ukraine “On Electronic Communications” regarding the rent payments for the use of the radio frequency spectrum (radio frequency resource) of Ukraine” came into force. The Law, in particular, establishes new and increased rent payment rates for 17 types of radio communications. At the same time, although it is not obvious from the title of the law, after it enters into force the following terms will increase from 1095 to 2555 days:

• the statute of limitations for conducting tax audits related to taxation of non-residents’ income with a source of origin from Ukraine;
• timeframe for taxpayers to keep the related documents. The extended periods will also apply to documents and information, which keeping period has not expired as of 01.07.2024. Thus, the adoption of the law enables conducting audits of transactions on the income payment to non-residents that have been carried out at least since 2018.

The timeframe for conducting audits of VAT budget refund has been reduced

On 01.07.2024, certain provisions of Law of Ukraine No. 3603-IX “On Amendments to the Tax Code of Ukraine on Improving Online Communication with Taxpayers and Clarifying Certain Legislative Provisions ” came into force. These include the establishment of a period of 20 days (instead of 30) for desktop audits and 40 days (instead of 60) for documentary audits to determine the amount of value added tax subject to budget refund.

Amendments to the form of the rent payment tax return are proposed

On 05.07.2024, the official website of the State Tax Service of Ukraine published a draft order of the Ministry of Finance of Ukraine “On Amendments to the Form of the Rent Payment Tax Return”. In particular, it is proposed to add a codifier of types of special use of forest resources and a list of types of subsoil use for purposes other than mining. According to the explanatory note, these novelties should simplify the process of rent payment management by the regulatory authorities. Comments and suggestions to the draft order are accepted within one month from the date of its publication.

Clarification on the specifics of declaring income from a joint spousal account

The Main Department of the State Tax Service in Kyiv provided individual tax consultation No. 3523/IPK/26-15-24-01-13-09 dated 02.07.2024 on the declaration of foreign income by spouses from an account that is jointly owned by both spouses, with unspecified shares of each spouse. The Consultation states that co-owners have the right to authorize one of them to declare joint income, or to decide themselves on the part to be declared by each spouse in their declaration. Both spouses do not need to declare the same part of the income.

Summary of the court practice on protection of investors in tax disputes

On 01.07.2024, the Supreme Court published a summary of the court practice of the Cassation Administrative Court within the Supreme Court on the protection of investors in tax disputes for the period from 2019 to May 2024. Inter alia, the review contains the resolution dated 23.05.2024 in case No. 640/14999/19. In this case, the supervisory authority informed the company that due to the commencement of the liquidation procedure of the payer, it is advisable to consider the refund of the overpaid tax amount after the liquidation procedures are completed. The Supreme Court emphasized that the lack of budgetary resources and commencement of the liquidation procedures cannot be a ground for refusing to refund an overpayment, provided that the legislative requirements for such refund are met.

The Supreme Court on administrative legal capacity of a non-resident’s representative office without the legal entity status

On 27.06.2024, the Supreme Court, by its ruling, referred case No. 640/31489/21 to the Judicial Chamber for Taxes, Fees and Other Mandatory Payments of the Cassation Administrative Court within the Supreme Court for revision of the previous position. The panel of judges noted that a non-resident’s representative office does not carry out commercial activities and is not a legal entity, and, therefore, does not have administrative procedural legal capacity to file a claim to the court for tax assessment notices annulment. At the same time, the Supreme Court has repeatedly found in cases, in which a non-resident’s representative office acted as a claimant, that such representative office has administrative procedural legal capacity. Therefore, the Judicial Chamber of the Supreme Court will provide a position on the issue, and thus, the upcoming court practice in similar cases may be influenced.