The President of Ukraine signed the Law of Ukraine No. 2628-VIII “On Amendments to the Tax Code and Certain Other Legal Acts of Ukraine in Relation to Improvement of Management and Revision of Certain Taxes” dated 23 November 2018 (the “Law”).

Below are the most important novelties introduced by the Law:

  • For corporate tax purposes, the Law introduced the definition of an asset related to the right of use.
  • If a non-resident established in the form of a partnership or its equivalent (for example, a UK LLP or a Delaware LLC or a German KG) paid a tax during the reporting year, then the transactions with such non-resident shall be considered as non-controlled for transfer pricing purposes, unless other criteria are met.
  • The Law has introduced “substance over form” principle for transfer pricing purposes.
  • Transfer pricing documentation has to be submitted at the request of fiscal authorities within 30 calendar days.
  • VAT exemption for import and supply of certain medical products has been extended until 31 December 2020.
  • VAT exemption for import of electrical vehicles has been extended until 31 December 2022.
  • VAT exemption for import of equipment for renewable power plants (including solar panels, wind turbines) has been introduced to apply until 31 December 2022.
  • Taxpayers cannot refuse to apply VAT privileges.
  • For personal tax purposes any obtained gift with the value not exceeding UAH1,043 shall not be taxed.
  • Businesses that employ disabled persons shall pay a decreased unified social contribution regarding the wages of such persons at the rate of 8.41%.
  • The Law introduced 0% rate of excise tax for supply of pure alcohol as a component in the production of cosmetics and other listed products.
  • Rent taxes for extraction of oil and condensate has been increased to 31%/16%, depending on depth of wells.
  • Maximum court fee for filing a tax claim has been substantially reduced to UAH19,200.
  • Fiscal authorities shall issue tax assessments within 15 working days.
  • Taxpayers may submit their objections to fiscal authority rulings within 10 working days.

Most of the amendments entered into force on 1 January 2019, whereas the amendments relating to excise tax will gradually apply throughout 2019.

For further information, please contact Dmytro Ivanusa, Partner, divanusa@mazurivanusa.com