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LEGAL HOTLINE 30.08.2018

LEGAL HOTLINE . 30 August 2018

Останні новини законодавства:


Iryna Kalnytska

Partner, Head of tax practice, Attorney at law

Olena Sulyma


Law on family farms entered into force

On August 15, 2018 the Law of Ukraine “On Amending the Tax Code of Ukraine and Certain Laws of Ukraine Regarding Promotion of Establishment and Business Activity of Family Farms” entered into force. This law introduces a number of amendments to the laws of Ukraine, including the following.

From now on, the fourth group of the single tax payers, i.e. agricultural commodity producers, also includes individual entrepreneurs operating only within a farm registered in accordance with the Law of Ukraine “On Farming” provided that they meet the following terms and conditions in full:
- They only grow and feed agricultural products, gather, catch and process such products grown and fed by them, and sell such products;
- They carry out their business activities (except for supply) at their tax address;
- They have no employees;
- Members of the individual’s farm are only his/her family members in the meaning of Part 2 of Article 3 of the Family Code of Ukraine;
- Area of agricultural lands and/or water resources owned and/or used by the members of the farm is 2 to 20 hectares.

Furthermore, duly registered individual entrepreneurs who have filed an application on selection of the simplified taxation system and the tax rate established for the fourth group by the end of the month when the state registration was carried out are deemed to be single tax payers from the date of their state registration.

As a reminder, the Law was adopted in order to establish the legal, economic and social framework in order to legalise family farms acquiring the status of the individual entrepreneur being an agricultural commodity producer, and therefore in order to ensure their full-scope participation in the social and economic development of the country on the basis of the preferential procedure for payment of the single tax and unified social tax.

Law on prevention of illegal land takeover signed

On August 20, 2018 the President of Ukraine signed the draft Law of Ukraine “On Amending Certain Legislative Acts of Ukraine Regarding Settlement of the Issue of Communal Ownership of the Land, Improvement of the Land Use Rules for Agricultural Land, Prevention of Illegal Takeover, and Promotion of Irrigation in Ukraine”.
As a reminder, the purpose of the Law was to create an efficient mechanism for using agricultural land in order to prevent illegal takeover and promote irrigation as well as to settle an issue of use of the collective land. In particular, the draft Law proposed the following provisions:

- Settling issues of collective ownership of land, particularly declaring the collective land of the dissolved collective agricultural enterprises to be communal property of territorial communities of villages, towns and cities;
- Establishing the procedure for inventory of the land in the State Land Cadastre, in the course of which, inter alia, errors in the State Land Cadastre with regard to the land plots within the land will be corrected;
- Enabling individuals and legal entities to use land plots under wood lines and other protective stands on a leasehold basis;
- Granting the land users using land plots with the total area of 75 % off the total area of the land the right to take on lease other land plots in the land provided that another land plot within the same land is subleased.
According to the final provisions of the draft Law, it shall enter into force on January 1, 2019.

New amendments made to the SFS inspection schedule for 2018

On August 16, 2018 the State Fiscal Service published the updated schedule of documentary scheduled inspections of tax payers for 2018 again.
The changes applied to the scheduled inspections of accuracy of calculation, completeness and timeliness of payment of the individual income tax, military levy and unified social tax for the first time.

Draft financial guarantee form published

On August 14, 2018 the draft order of the Ministry of Finance of Ukraine “On Approving the Financial Guarantee Form” was published on the website of the State Fiscal Service. The purpose of the draft order was to approve the financial guarantee form and to establish the list of data to be set out in the guarantee.

According to the explanatory note implementation of the order will facilitate customs control and customs clearance of commodities and commercial vehicles provided for by the Customs Code of Ukraine by means of the financial guarantee form submitted in soft copy or hard copy accompanied with the soft copy.

As a reminder, according to Article 311 of the Customs Code of Ukraine, the revenue authorities accept financial guarantees issued by the guarantors included into the register of guarantors maintained by the central executive authority in charge of development and implementation of the public tax and customs policy, as security for payment of customs duties. A financial guarantee submitted as a document is an irrevocable obligation of the guarantor included into the register of guarantors to pay a certain amount upon request of the revenue authority if customs duty payment obligations secured with the guarantee are not fulfilled.

NBU published new explanations on cash desk discipline

FAQ regarding the Regulations on the Cash Desk Transactions in the National Currency of Ukraine (hereinafter the “Regulations”) have been published on the official website of the National Bank of Ukraine (hereinafter the “NBU”). In its explanations, the NBU published the recommendations that had already been published before, where the NBU:

- Emphasized the procedure for filling in the column “No.” in cash orders and cash record forms (annexes to the Regulations), namely:

  • The number by order (for short - No.) of the cash orders is printed in the column “No.” of the cash receipt and payment orders. Note that as the cash receipt and payment orders are drawn up for each cash receipt/payment transaction, “1” is printed in the column “No.”.
  • The number by order (for short – No.) is printed in the column “No.” of the cash record forms, particularly unified consecutive numbering is used in the cash pay register (Annex No. 1 to the Regulations, Clause 18 of Section II), log of cash receipt and payment orders in the standard forms No. КО-3, КО-3a (Annex No. 4 to the Regulations, Clause 33 of Section III) and log of cash disbursed and accepted by the Senior Cashier (Annex No. 6 to the Regulations, Clause 43 of Section

- Noted that funds for increasing the authorised capital, granted financial aid, funds contributed by one of the founders or official of the business entities to the company’s current account by wire transfer were not to be accounted in the business entity’s cash book;

- Explained that the last name and initials of the authorized official of the company were to be specified in the cash receipt and payment orders in the column “Senior Executive”, “Chief Accountant” in case of they are signed by the company’s authorized official.

No explanations or copies of documents on the blocked tax invoice – wait for a fine

The State Fiscal Service stated at their Public Information and Reference Resource web page that if the tax payer has taken no actions necessary for the regulatory authority to take a decision on registration of the tax invoice/adjustment calculation, registration of which with the Unified Register of Tax Invoices (hereinafter the “Register”) has been suspended, within 365 calendar days, but the regulatory authority has detected transaction carried out without registration of the tax invoice/adjustment calculation to the tax invoice with the Register on the basis of the inspection upon expiration of 365 days, the tax payer is subject to the penalties established by Article 120-1 of the Tax Code of Ukraine.

These explanations are completely reasonable as the given penalties do not apply only during the period of suspension of the registration until the decision on resumption of registration of tax invoices/adjustment calculations is taken. In its turn, the tax payer’s failure to submit explanations and copies of documents within 365 days is a basis for the regulatory authority’s decision on denial of registration of the tax invoice/adjustment calculation with the Register.

Draft on Law on Decreasing prices of branded clothes registered

Draft law No. 9018 dated August 10, 2018 “On Amending Article 397 of the Customs Code of Ukraine and Certain Legislative Acts of Ukraine Regarding Decreasing Prices of Clothes” has been published on the website of the Verkhovna Rada of Ukraine.

According to the explanatory note, the purpose of the draft law is to simplify the procedure for importing and exporting branded clothes to and from the customs territory of Ukraine for free circulation, and to decrease the cost of imported clothes. As a result, adoption of the draft law is supposed to decrease prices of clothes and textile materials, thus creating conditions for the wider and more versatile choice of high-quality Ukrainian and foreign clothes for consumers.

Further, the main proposals of the draft law are:

- To supplement Article 397 of the Customs Code of Ukraine with one more group of commodities not subject to the actions related to suspension of customs clearance, particularly regarding branded commodities introduced into the stream of commerce within the territory of any country by the brand owner’s consent;
- To amend the Law of Ukraine “On Protection of Rights to Marks for Goods and Services” in order to allow buying branded commodities abroad to be subsequently sold within the territory of Ukraine by the brand owners’ consent provided that the qualitative characteristics of these commodities are not changed or deteriorated upon their introduction into the stream of commerce;
- To decrease the preferential duty rates for textile materials and products down to 0 % by making respective amendments to the Law of Ukraine “On the Customs Tariff of Ukraine.”

Opinion of the supreme court regarding unlawfulness of the tax authority’s actions

In the case No. 823/1294/17 reviewed by the Supreme Court, the tax payer appealed from the unlawful actions of the fiscal authority with regard to the unscheduled documentary on-site inspection in pursuance of the ruling of the investigating judge. In that case, after the tax payer had not been found at their address, the tax authority repeatedly issued orders for the inspection and went out to the inspection in breach of the effective laws, and then drew up the respective report without the due inspection instead of taking respective actions aimed at establishment of the tax payer’s location.

Following consideration of the case, the Supreme Court upheld the decisions of the previous-instance courts that had satisfied the claim, and expressed a number of opinions useful for tax payers, which may be of use in wider variety of disputes:

- The regulatory authority is not authorised to attempt to carry out an inspection by issuing multiple orders in pursuance of the ruling of the investigating judge unless it meets the legal requirements to determination of the actual location (place of residence) of the tax payer. Moreover, in this case the regulatory authority may not relocate the inspection to the tax authority’s location.

- Pursuant to the tax laws, the officials of the regulatory authority are entitled to start a documentary on-site inspection provided that they have met the legal requirements regarding familiarization of the tax payer with the order on the inspection, data on the date of commencement and venue thereof in the manner prescribed by the law, before the inspection. In case of failure to meet the requirements to presentation or dispatch of a copy of the order on the documentary unscheduled inspection and written notice of the date of commencement and venue of such inspection as prescribed by the tax laws, the inspection is deemed illegal.


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