With effect from 1 January 2021, the Law of Ukraine № 1117-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Ensuring the Collection of Data and Information Necessary for Declaring Certain Objects of Taxation” (the “Law 1117”) effectively postpones entry into force of certain previous amendments to the Tax Code of Ukraine introduced in May 2020 by the Law № 466-IX.
Below are the most important details of the Law 1117:
- CFC taxation rules shall be effective commencing 2022;
- Use of “business purpose” shall become effective commencing 2022 and shall be limited for transfer pricing purposes and for the acquisition and sale of goods, services, works from non-residents from low-tax jurisdictions and accrual of royalties in favor of non-residents;
- Non-residents that perform business activities on the territory of Ukraine through separate divisions, including permanent establishments, and as at 1 January 2021 are not registered with the Ukrainian tax authorities, have to register before 1 April 2021, whereas tax audits of such non-residents will be legitimate from 1 July 2021;
- Date of entry into force of the taxation of indirect sales of real estate by non-residents is moved from 1 July 2020 to 1 January 2021;
- Exemption from taxation of proceeds from termination of CFC by its Ukrainian individual owner is prolonged by the end of 2021.
For more information, please contact Dmytro Ivanusa, Partner