Odesa Legal issues, Odesa Finance and Taxes

17/ 10/ 2019


Countries around the world are increasingly focused attentions on directives and anti-tax evasion actions.  And Ukraine isn’t an exception. In recent years, many initiatives have been proposed and legislative changes related to the implementation of the so-called “de-offshore” project have been adopted. What  innovations await the corporate world in 2020? A joint meeting of EBA Odesa Legal + Finance & Tax Committees’ Meeting on October 17, 2019, was dedicated to this issue. Speakers of the event were representatives of the Interlegal affiliate company: Artur Nicevich, Irina Voevodina, Darius Liashenko and Martha Sverlikovskaya.

The experts’ reports were full of latest and relevant information on changes in the legislation of the crane with preferential taxation and inspection of the safest jurisdictions, news and trends in the registration of business. We discussed the peculiarities of tax information exchange, risks for owners and liability standards, means of protecting assets, currency liberalization and discrimination of fictitious entrepreneurship in Ukraine, the prospects of adopting a law on controlled companies, the introduction of BEPS in our the country.  The impact of proposed and already implemented legislative changes on specific structures used by Ukrainian business abroad.

The main messages of our meeting:

  • The concept of substance: the main reason for its economic presence in the position of the tax authorities for which it is not enough just to establish a company in the country of registration. The situation have some concern: risk of loss of tax benefits in the country of registration of the foreign company, and additional taxes in the country where the business is conducted
  • BEPS Rules: refers to tax planning strategies that exploit gaps and mismatches in tax rules The idea is not about to punish taxpayers but to radically change the “rules of the game.” The necessity of BEPS rules in Ukraine does not cause resistance, but the question arises when it comes to how to implement them ?! Ukraine is planning to work on this in 2020, so it should be continued…
  • CRS rules: according to the standard, banks can receive information about financial activities of the individual account of the non-resident, corporate partners of non-resident companies. They have the right to convey information automatically to subordinate state authorities. The question of Ukraine’s participation in the automatic exchange of information has already been resolved.   It remains only to determine the timing of its implementation (pre-2021) and create by now the necessary technical and regulatory framework.
  • The only opportunity today to develop and win a competitive race is – apply to tax jurisdictions in good reputation. Today, a businessman has the right to conduct a foreign economic activity with the help of any of his foreign companies, BUT such activity should have a real economic nature, and not be solely aimed at reducing the tax.

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