This site uses cookies to provide you with a more responsive and personalized service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.

Bookmark Email Print page

Tax and Legal headlines, 25 December 2013

Ukrainian Verkhovna Rada Accepts a Tax Code Amendment Law
Given below is a brief overview of the principal amendments to the Tax Code of Ukraine (hereinafter, the “Tax Code”).

Tax rates

• The VAT rate reduction to 17% is postponed until 1 January 2015
• The CIT rate to be reduced from 19% to 18% in 2014, from 18% to 17% in 2015, and from 17% to 16% in 2016
• Excise tax rates for specific goods are increased  

Other amendments

• The VAT exemption for grain transactions that previously was introduced by the Transitional Provisions of the Tax Code to have effect only by 1 January 2014 is now included in the General Provisions of the Tax Code as part of the VAT exempt transactions (Article 197)
• The VAT exemption for transactions related to natural gas import into the customs territory of Ukraine is cancelled  
• Losses from transactions with securities accumulated as at 1 January 2014 can not be used to calculate profit/loss for 2014
• From 1 January 2014, if the Law takes effect, export of certain grain crops by agricultural producers and by companies that purchased grain from such producers will not be subject to VAT exemption  
• The VAT exemption of supply of scrap metal and raw skin or leather is extended until 1 January 2015  
• Supply of paper and cardboard for recycling (waste paper) is VAT exempt until 1 January 2015

Comments:

Despite expectations, the tax load will not decrease in 2014, due to the above amendments.  However, there are some positive aspects.  Notably, many companies will not have to change their current business and tax planning models given that the VAT rate is not reduced.  This is particularly important to grain trading companies provided the VAT exemption of grain transactions has been extended and included in the general provisions of the Tax Code.

Ukrainian Verkhovna Rada Approved a Draft Law on Consolidated Tax Groups in Ukraine.

Comments:

In general, the anticipated introduction of the consolidated tax group concept is a very positive move of the government which is in line with the foreign countries’ practice.  Tax consolidation will allow for a legal and transparent transfer of losses within the same group of companies.  Moreover, it will let the companies simplify significantly the pricing and administration of intragroup transactions provided the companies are not required to comply with the transfer pricing requirements.
We believe, however, the current requirements a group of companies need to comply with to apply the tax consolidation mechanism are too rigid (e.g., the CIT paid for the previous year should amount to UAH 4 billion as a minimum).  Only the largest groups of companies will benefit from this initiative.  We hope the requirements will be softened during further analysis of the Draft Law so that more taxpayers can benefit from the tax consolidation.

Contacts

Name:
Ruslana Pisotska
Company:
Deloitte
Job Title:
PR-Specialist
Phone:
+38 (067) 464 1101
Email
rpisotska@deloitte.ua
/Platform/Portal/Solution Delivery/Footer/Copyright Message

 

© 2014 PJSC “Deloitte & Touche USC”. All rights reserved. Please see www.deloitte.com/ru/about for a detailed description of the structure of Deloitte CIS.

 

Get connected:

 

Information:

 


 

Deloitte is the brand under which tens of thousands of dedicated professionals in independent firms throughout the world collaborate to provide audit,consulting, financial advisory, risk management, and tax services to selected clients. 

The CIS is evolving rapidly and this dictates that we cannot be bound by traditional approaches. We are constantly tailoring our services to fit this unique market and to match the needs of our clients, often being called upon to develop new solutions to current issues. Our success can be measured in the response of the market, making us the fastest-growing professional services firm in the CIS.