Business awaits the prompt amendments to the Tax Code
The European Business Association urges to adopt Draft Law No.2524 amending the Tax Code of Ukraine which was recently substantially amended by the Law of Ukraine “On Amendments to the Tax Code of Ukraine to improve tax administration, eliminate technical and logical inconsistencies in tax legislation ” (hereinafter – Law No.466).
Thus, the situation with the entry into force of Law No.466 caused a negative reaction in the business community. Business is dissatisfied with the terms of introduction of separate norms, as well as the content of some norms. Besides, the business community drew the attention of legislators to several technical errors and imperfections contained in Law No.466, including amendments to the rules of corporate income tax, taxation of controlled foreign companies, changes to land tax, property tax, and others.
It should be noted that draft Law No.2524 contains a number of positive proposals developed jointly in a working group with the participation of the largest business associations at the Office of the President of Ukraine.
Thus, the business welcomes the decision to postpone the introduction of the new tax rules:
– for controlled foreign companies (CFCs),
– for permanent representatives of non-residents,
– for income tax of non-residents.
The business also welcomes the reduction of fines for some violations regarding value-added tax and the retrospective application of this rule, the abolition of extended statutes of limitations on personal income tax and military duty.
Therefore, businesses await the prompt adoption of draft law No.2524 as a whole.
Besides, draft law No.2524 proposes some modifications to the provisions on “business purpose” which have provoked the sharpest criticism. However, the content of such provisions still causes concerns to the business.
Unfortunately, draft law No.2524 does not propose significant improvements to the controversial corporate income tax adjustments applicable to exports of goods and services.
In general, during the working meetings at the Office of the President, remarks were made on a much larger number of provisions of Law No.466. However, draft law No.2524 includes only a part of the proposals made. Therefore, the business calls on the authorities to continue working on errors in tax legislation with the involvement of business representatives.
Finally, the community hopes that diligent business will not be pressured by regulators for the period from 23 May 2020 (entry into force of Law No.466) until the adoption and application of the provisions of draft law No.2524.