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Support of Business During Quarantine – Accountor Informs of What Ukrainian Authorities Have Prepared for Entrepreneurs

27/ 03/ 2020

Halyna Zelinska

Accountant, Tax Expert of Accountor Ukraine

The coronavirus pandemic is feverish not only for people, but also for Ukrainian businesses. The implementation of the quarantine regime has forced many companies to suspend their operations and, consequently, incur losses. Given the potential negative impact on the economy, some countries have launched business support programs.

To support both businesses and population, on March 17, 2020, the Law of Ukraine “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Support of Taxpayers for the Period of Implementation of Measures to Prevent the Occurrence and Spread of Coronavirus Disease (COVID- 19) # 533-IX was adopted. The law was officially published on March 18, 2020.

What Has the Government Prepared?

1) Penalties for violation of tax laws from March 1 to May 31, 2020 will not apply. However, Accountor informs that there are exceptions where they might apply, e.g.:

  • for breach of requirements for long-term life insurance or non-state pension insurance contracts, in particular, insurance of supplementary pension;
  • for alienation of property, which is in the tax lien, without the consent of the controlling body;
  • for violation of the rules of accounting, production and circulation of fuel or alcohol (for taxpayers on a general basis);
  • violation of accrual and payment of VAT, excise tax, rental payments, as well as of submission of the relevant reports for these taxes.

2) For the period from March 18 to May 31, a moratorium is imposed on documentary and factual inspections/audits of businesses. The inspections which began prior to March 18, 2020, and are still pending, are being suspended.

The Tax Office’s Explanation: “The ban does not apply to audits related to budget reimbursement. By March 30, 2020, the Tax Office will release an updated audit schedule.”

3) For the period between March 18 and May 31, 2020, the day count stops for expiry periods of limitations provided for in Article 102 of the Tax Code of Ukraine.

4) The declaration of property and income can be submitted by 1 July 2020. The taxes accrued in the declaration must be paid by October 1, 2020.

5) Payment for land used for business activities shall not be charged during March and April 2020.

6) As for the Unified Social Contribution, the following reliefs were introduced for the period from March, 1 to April, 30:

  • Natural persons-entrepreneurs and self-employed persons have the right not to pay the USC for themselves for March and April 2020. Attention! This legal norm does not apply to the USC paid for their employees. Failure to pay USC for employees must be shown in the USC report for the year. However, the pension insurance status for the above period will not be lost;
  • There will be no penalties for late payment part of USC neither for legal entities nor for individuals;
  • No penalty is charged for late filing of the report on USC;
  • For the period from March 18 to May 18, 2020, a moratorium is imposed on documentary audits of the correctness of USC accruals and calculations.

7) No penalties or fines shall be charged to the population in the event of late payment of a consumer loan between March,1 and April, 30. Lenders during this period are prohibited to raise interest rates on the loan.

Often, these changes result in temporary disorientation of businesses and an increased need for prompt explanations from the tax authorities.

Entrepreneurs are already wondering whether penalties for late payment of income tax for 2019 will be abolished, and why the rules for consumer loans and do not apply to the corporate ones.

During the quarantine period, state support is crucial for businesses. It will help companies to stay afloat in the face of current changes.

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