What EBA experts think about the latest tax novelties

11/ 12/ 2017

Last week the Verkhovna Rada of Ukraine adopted several important draft laws, in particular, the Draft Law №7000 On State Budget of Ukraine for 2018 dd. 15 September 2017 and Draft Law #6776-d On introduction of the amendments to the Tax Code of Ukraine dd. 14 November 2017. Main novelties for the EBA members voted by MPs: Increase of the minimum wage to UAH 3732 (previously UAH 3,200) from January 1, 2018; Preservation of current rates of excise tax on spirits in order to stabilize the industry in 2018; Exemption from payment of VAT and excise duty on the import of electric vehicles into Ukraine for 1 year (until January 1, 2019); Expansion of the scope of the VAT rate of 7% on the operations of the supply and import of medical products, which are included in the Register of medical equipment and medical devices, that meet technical regulations and are allowed for use in Ukraine; Preservation of current rates of excise tax on rent for using the radio frequency resource of Ukraine; Limitation of the possibility of using the scheme for evasion of payment of customs duties, by establishing restrictions on stay for the declarant abroad for 24 hours and crossing the border no more than once every 3 days; Introduction of the 12% and 6% rental rates for new wells for natural gas extraction and the stabilization rate for the immutable rental rate is maintained during the next 5 years; Resolving the size of the rent for production sharing agreements (2% for oil and 1.25% for natural gas); Reduction of rent for gas condensate production from 45%/29% to 21%/14%; Exemption from taxation of travel vouchers provided by an employer to an employee. However, there are also several negative points contained in the adopted Draft Laws: Exemption from taxation of TAX on the export of technical crops of commodity items 1201 (soybean), 1205 (rape) and 1206 00 (sunflower) under the customs regime; The return to the test regime of the mechanism for suspending the registration of tax invoices. The Association will analyze the adopted legislative acts more precisely and provide detailed comments and suggestions to those issues, which, according to the EBA experts, will have a negative impact on the business environment.

Last week the Verkhovna Rada of Ukraine adopted several important draft laws, in particular, the Draft Law №7000 On State Budget of Ukraine for 2018 dd. 15 September 2017 and Draft Law #6776-d On introduction of the amendments to the Tax Code of Ukraine dd. 14 November 2017.

Main novelties for the EBA members voted by MPs:

Increase of the minimum wage to UAH 3732 (previously UAH 3,200) from January 1, 2018;
Preservation of current rates of excise tax on spirits in order to stabilize the industry in 2018;
Exemption from payment of VAT and excise duty on the import of electric vehicles into Ukraine for 1 year (until January 1, 2019);
Expansion of the scope of the VAT rate of 7% on the operations of the supply and import of medical products, which are included in the Register of medical equipment and medical devices, that meet technical regulations and are allowed for use in Ukraine;
Preservation of current rates of excise tax on rent for using the radio frequency resource of Ukraine;
Limitation of the possibility of using the scheme for evasion of payment of customs duties, by establishing restrictions on stay for the declarant abroad for 24 hours and crossing the border no more than once every 3 days;
Introduction of the 12% and 6% rental rates for new wells for natural gas extraction and the stabilization rate for the immutable rental rate is maintained during the next 5 years;
Resolving the size of the rent for production sharing agreements (2% for oil and 1.25% for natural gas);
Reduction of rent for gas condensate production from 45%/29% to 21%/14%;
Exemption from taxation of travel vouchers provided by an employer to an employee.

However, there are also several negative points contained in the adopted Draft Laws:

Exemption from taxation of TAX on the export of technical crops of commodity items 1201 (soybean), 1205 (rape) and 1206 00 (sunflower) under the customs regime;
The return to the test regime of the mechanism for suspending the registration of tax invoices.

The Association will analyze the adopted legislative acts more precisely and provide detailed comments and suggestions to those issues, which, according to the EBA experts, will have a negative impact on the business environment.