No major tax changes are planned in 2022, but there will be some exceptions

21/ 01/ 2022

As of today, the key systemic changes to the tax legislation have been made. Further work should take place at the level of Government. Thus, it is necessary to properly implement the rules on RSO, anti-BEPS (without shocks for business), to establish international exchange of tax information, and, last but not least – to remove any corruption components. Surely, targeted changes may take place, however, such global initiatives as draft law №5600 are not planned. This was claimed by Danylo Hetmantsev, Chairperson of the VRU Committee on Finance, Taxation and Customs Policy at the meeting with the EBA. An exception (that is expected to be positive) may be a reduction in the tax burden on personal income. Various options are being considered: either lowering the personal income tax rate (leaving the SDR and abolishing the military tax) or combining the three mandatory payments into one. However, it is unknown at this time what mechanism will be supported. Such changes, if adopted, may be accompanied by significant changes to the mechanisms for administering taxes and fees. In the context of changes, the issues of real estate taxation, personal and family declaration were raised. It was noted that no taxes are planned to be raised this year. Although, some adjustments are possible - due to inflation. However, the Verkhovna Rada Committee will not propose such decisions without the position of the Ministry of Finance. The possible introduction of a tax on withdrawn capital is being considered for a limited number of persons with a turnover of up to UAH 200 million per year. It is expected that this tax will be applied as an option - that is, taxpayers will be able to choose between a tax on withdrawn capital and a regular corporate income tax. Business was also interested in the situation regarding RSO. Thus, according to preliminary information, in early January, banks began to receive information about the mass disconnection of POS terminals. According to the Verkhovna Rada Committee, this situation has now stabilized. The European Business Association will gather all the information for January and share it with the Committee for further discussion. We also discussed customs issues, namely criminalization of smuggling and the risks of pressure on transparent business as previously they suffered from questionable enforcement practices. Thus, transparent business is worried that the existing legislative proposals do not trace the fight against the real big smugglers who are causing huge losses to the country. At the same time, the business had more specific issues related to taxation and customs. The community will collect all suggestions and comments and will share them with Mr. Hetmantsev shortly. We are very grateful to Danylo Hetmantsev for the meeting and we hope that in 2022 the VRU Committee and EBA will have even more fruitful cooperation and dialogue! The recording of the event can be found at the link.

This was claimed by Danylo Hetmantsev, Chairperson of the VRU Committee on Finance, Taxation and Customs Policy at the meeting with the EBA.

An exception (that is expected to be positive) may be a reduction in the tax burden on personal income. Various options are being considered: either lowering the personal income tax rate (leaving the SDR and abolishing the military tax) or combining the three mandatory payments into one. However, it is unknown at this time what mechanism will be supported. Such changes, if adopted, may be accompanied by significant changes to the mechanisms for administering taxes and fees.

In the context of changes, the issues of real estate taxation, personal and family declaration were raised.

It was noted that no taxes are planned to be raised this year. Although, some adjustments are possible – due to inflation. However, the Verkhovna Rada Committee will not propose such decisions without the position of the Ministry of Finance.

The possible introduction of a tax on withdrawn capital is being considered for a limited number of persons with a turnover of up to UAH 200 million per year. It is expected that this tax will be applied as an option – that is, taxpayers will be able to choose between a tax on withdrawn capital and a “regular” corporate income tax.

Business was also interested in the situation regarding RSO. Thus, according to preliminary information, in early January, banks began to receive information about the mass disconnection of POS terminals. According to the Verkhovna Rada Committee, this situation has now stabilized. The European Business Association will gather all the information for January and share it with the Committee for further discussion.

We also discussed customs issues, namely criminalization of smuggling and the risks of pressure on transparent business as previously they suffered from questionable enforcement practices. Thus, transparent business is worried that the existing legislative proposals do not trace the fight against the real big smugglers who are causing huge losses to the country.

At the same time, the business had more specific issues related to taxation and customs.

The community will collect all suggestions and comments and will share them with Mr. Hetmantsev shortly.

We are very grateful to Danylo Hetmantsev for the meeting and we hope that in 2022 the VRU Committee and EBA will have even more fruitful cooperation and dialogue!

The recording of the event can be found at the link.