Finance and taxes in wartime: the main innovations

22/ 04/ 2022

On April 21, 2022, at a meeting of the EBA Odesa Financial and Tax Committee, we talked about finance and taxes in wartime. The topic is relevant in view of the updated legislation. Therefore, the need to pay taxes is extremely important for Ukraine now. That is why the state has provided all the necessary explanations regarding the non-submission or late submission of declarations or non-payment of taxes. Vitaliy Smerdov, Tax Practice Partner Crowe Mikhailenko and Andriy Dukhnytsky, Adviser Crowe Mikhailenko, covered financial and fiscal issues, cooperation with russia and booking critical employees at businesses. In particular, we talked about the transition to a single tax at a rate of 2%, how in martial law to most effectively finance their employees in terms of taxation, whether it is legal for individuals in Ukraine, including entrepreneurs to use accounts abroad (banks, payment systems) and how such income is taxed, etc. Here are some of the recommendations on the above issues that were voiced during the meeting. It makes sense to switch to a 2% single tax rate when your counterparties have also switched to a 2% rate, especially in the B2B segment. The Unified Register of Single Taxpayers will help to check the status of the counterpartys transfer. It is really advantageous to switch to this rate when the business is highly profitable and your business segment is B2C. But here it is important to take into account another point: the status of the amount of balances in the warehouse and due to which operations these balances are formed. It is envisaged that companies can decide to leave Russia and complete all legal processes of termination within 1.5 years. You will not have to pay additional taxes (income tax, environmental tax, rental property tax) for 1.5 years if the company has started the process of terminating economic ties. In a state of war, the issue of financing its employees is quite important. Dismiss-not dismiss-declare simple - the employer decides, according to the labor law regulation. If it is simple - pay at least 2/3 of salary. If you do not dismiss - to issue a person on vacation at his own expense. However, it is extremely important to think more about people. In order for businesses to continue to operate while meeting the needs of the population, it is important to reserve critical employees in military service businesses. By the way, detailed step-by-step instructions on how to do this were developed by the European Business Association and are available at the link along with other explanations. Thanks to the speakers for the useful advices! Everything will be Ukraine!

On April 21, 2022, at a meeting of the EBA Odesa Financial and Tax Committee, we talked about finance and taxes in wartime. The topic is relevant in view of the updated legislation. Therefore, the need to pay taxes is extremely important for Ukraine now. That is why the state has provided all the necessary explanations regarding the non-submission or late submission of declarations or non-payment of taxes.

Vitaliy Smerdov, Tax Practice Partner Crowe Mikhailenko and Andriy Dukhnytsky, Adviser Crowe Mikhailenko, covered financial and fiscal issues, cooperation with russia and booking critical employees at businesses. In particular, we talked about the transition to a single tax at a rate of 2%, how in martial law to most effectively finance their employees in terms of taxation, whether it is legal for individuals in Ukraine, including entrepreneurs to use accounts abroad (banks, payment systems) and how such income is taxed, etc.

Here are some of the recommendations on the above issues that were voiced during the meeting.

It makes sense to switch to a 2% single tax rate when your counterparties have also switched to a 2% rate, especially in the B2B segment. The Unified Register of Single Taxpayers will help to check the status of the counterparty’s transfer. It is really advantageous to switch to this rate when the business is highly profitable and your business segment is B2C. But here it is important to take into account another point: the status of the amount of balances in the warehouse and due to which operations these balances are formed.
It is envisaged that companies can decide to leave Russia and complete all legal processes of termination within 1.5 years. You will not have to pay additional taxes (income tax, environmental tax, rental property tax) for 1.5 years if the company has started the process of terminating economic ties.
In a state of war, the issue of financing its employees is quite important. Dismiss-not dismiss-declare simple – the employer decides, according to the labor law regulation. If it is simple – pay at least 2/3 of salary. If you do not dismiss – to issue a person on vacation at his own expense. However, it is extremely important to think more about people.
In order for businesses to continue to operate while meeting the needs of the population, it is important to reserve critical employees in military service businesses. By the way, detailed step-by-step instructions on how to do this were developed by the European Business Association and are available at the link along with other explanations.

Thanks to the speakers for the useful advices! Everything will be Ukraine!