RECENT DEVELOPMENTS IN TAX LEGISLATION
Mazars Ukraine – Tax Alert | 13 January 2017
TABLE OF CONTENTS
CONTACTS
Please find hereinafter a brief overview of recent
developments in tax and financial legislation in
Ukraine including:
 Tax changes;
Gregoire Dattee, Partner
[email protected]
 Extension of currency control restrictions;
 State budget of Ukraine for 2017;
Yuriy Netskyy, Tax Manager
[email protected]
Tel: +38 044 390 71 07
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 Removal of administrative barriers for
export of services;
 Threshold for cash transactions.
Tax Changes
On 20-21 December 2016, the Verkhovna Rada
adopted Laws No. 1791-VIII and No. 1797-VIII on
tax changes. They were signed by the President
of Ukraine on 30 December 2016.
We would like to draw your attention to a brief
overview of changes specified by these Laws; tax
changes take effect on 1 January 2017.
Corporate profit tax
 Numerous small technical changes
regarding tax differences, clarifying the
wording of Tax Code;
 0% corporate profit tax rate for small
companies for 2017-2021.1
Transfer pricing
The main change consists in higher thresholds
for controlled transactions:
 Taxpayer’s total income exceeds UAH
150 million for the relevant year
(previously UAH 50 million);
 Volume of transactions with a given
counterparty exceeds UAH 10 million for
the relevant year (previously UAH 5
million);
 Deadline for submission of report on
controlled transactions is 1 October of
the following year (previously 1 May).
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VAT changes
 Cancellation of special VAT regime for
agricultural enterprises;
 Implementation of a unified public
register for automatic VAT refund with
chronological order of repayment at the
state level;
 Some changes in rules of electronic VAT
invoice issuing and registration, aiming at
increasing control of tax authorities.
Other points
 Implementation of an electronic office
for taxpayers, enabling access and
control of data on a taxpayer’s respective
tax position (should start working not
later than 1 January 2018);
 Tax police is abolished (however, in
practice it continues its work until the
establishment of new finance police),
which should result in reduced
administrative pressure on taxpayers;
 Cancelation of 2% pension tax imposed
on cash currency purchase transactions;
 Increase of excise duties for beer, wine
and alcoholic beverages;
 Increase of thresholds for recognition as
a “large taxpayer”;2
 Simplified tax regime is retained without
changes;
 Dormant private entrepreneurs using
general tax regime are liable to pay
monthly social insurance contribution
(UAH 704).
Companies with annual revenue not exceeding UAH 3 million and average salary exceeding at least twice the minimum
salary may apply 0% corporate profit tax rate for 2017-2021 (under certain additional criteria)
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Taxpayers with total income exceeding UAH 1 billion or amount of taxes paid exceeding UAH 20 million for the last year will
be recognised as large taxpayers (previously total income exceeding UAH 500 million or amount of taxes paid exceeding UAH
12 million)
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Extension of Currency Control Restrictions
On 13 December 2016, the National Bank of
Ukraine passed the Resolution No. 410.
 120-day limit for import and export
settlements in foreign currency.
As expected, key currency control restrictions
were extended for a half-year period until 16
June 2017, including as follows:
The National Bank of Ukraine prolonged the
permit for repatriation of dividends for 20142015 to foreign investors. The monthly cap for
dividends repatriation is kept as the higher of
either USD 1 million or 10% of the total amount
of dividends (but not more than USD 5 million).
 Mandatory sale of 65% foreign currency
inflow;
State Budget of Ukraine for 2017
On 21 December 2016, the Verkhovna Rada of
Ukraine adopted Law No. 1801-VIII on the State
budget of Ukraine for 2017.
The monthly minimum salary was increased to
UAH 3,200 starting from 1 January 2017 (UAH
1,600 for December 2016).
The state budget provides for revenue and
spending of UAH 731 billion and UAH 800 billion
respectively, representing a 20.3% growth
compared to the state budget for 2016. The
budget deficit, including loan repayments,
amounts to UAH 77.5 billion.
Therefore, social insurance contribution for
monthly minimum salary equals UAH 704,
personal income tax – UAH 576, military tax –
UAH 48 (tax amounts increased two-fold).
Maximum basis for monthly SIC calculation will
remain at the level of UAH 40,000, as it is not
connected with the level of minimum salary.
Removal of Administrative Barriers for Export of Services
On 3 November 2016, the Verkhovna Rada of
Ukraine adopted the Law No. 1724-VIII on
removal of administrative barriers for export of
services.
This Law provides for the following liberalisation
steps in regard on export of services (except for
transport and insurance):
 Contract may be concluded in either
written or electronic form – for example,
by accepting a public offer, by emailing
or by issuing an invoice;
 Invoices may be issued in electronic form
with an electronic signature;
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 Commercial banks would no longer be
entitled to request the translation of
documents that are in English or have an
English translation;
 Formal contracts or acts of acceptance
would no longer be required, with
invoices seen as sufficient prove of
contractual relations.
On 30 December 2016, the National Bank of
Ukraine passed the Resolution No. 419 for
practical implementation of this Law. As result,
this Law came into force on 3 January 2017.
For practical implementation of this rules please
consider position of other involved parties.
Threshold for Cash Transactions
On 25 November 2016, the National Bank of
Ukraine passed the Resolution No. 407.
This restriction came into force on 4 January
2017.
The threshold for cash transactions by
individuals was reduced to UAH 50 thousand
(previously UAH 150 thousand).
The threshold for cash transactions by legal
entities is kept at the level of UAH 10 thousand.
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CONTACT
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Address – Kyiv
Address – Lviv
04070, Illinska Street, 8, Kyiv, Ukraine
Illinsky Business Center
Tel. +38 (044) 390 71 07
Fax +38 (044) 390 71 06
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