News (#5 May 2018)

Draft

Ministry of Finance proposed establishing criteria for high income individuals

The Ministry of Finance of Ukraine has submitted the Draft Law On Amendments to the Tax Code of Ukraine and some Legislative Acts Regarding Criteria for Identifying Persons with High Income for public discussion.

Under the draft, a person with a high income Ч a taxpayer Ч is an individual-resident meeting one of the following criteria:

а) being the ultimate beneficial owner (controller) of a large taxpayer;

b) direct or indirect ownership of 10% or more of the authorized (share) capital or voting rights of the acquired stock (shares) of a legal entity, which is a tax resident of another state and has declared (received) income for the previous year of more than EUR 10 million;

c) total annual taxable income for the previous tax (reporting) year exceeds
UAH 50 million.

It should be pointed out that late submission of a tax return by such a taxpayer entails imposition of a fine in the amount of 10% of the accrued sum of personal income tax.

Authorizing the State Fiscal Service of Ukraine to obtain access to information on bank accounts of this category of individuals is also envisaged.

Adoption of the document is due to implementation of the BEPS plan and OECD recommendations.

These rules will promote an increase in control over circulation of individualsТ money according to legality of such income, avoidance of headline-making situations related to keeping funds received from УschemeФ transactions conducted in violation of tax legislation, particularly by evading taxes, on accounts of banking institutions by individuals.

Ukraine signed four conventions of the Council of Europe

The signing took place on 12 April 2018 in the Ministry of Justice in Copenhagen within the framework of the conference on reform of the Convention on Human Rights.

In particular, Ukraine signed:

Ч European Convention on Service Abroad of Documents relating to Administrative Matters (STE No. 94), aimed at defining the legal basis for mutual assistance in providing documents on administrative matters;

Ч European Convention on Obtaining Abroad of Information and Evidence in Administrative Matters (STE No. 100), facilitating mutual assistance in administrative matters, providing information on the law, standards and customs, actual data and documents, as well as evidence to be used in judicial proceedings;

Ч Council of Europe Convention on Access to Official Documents (STCE No. 205), the first binding international legal instrument defining general right of access to official documents owned by public authorities;

Ч On Amending the Additional Protocol to the Convention on the Transfer of Sentenced Persons (STCE No. 222).

New Draft envisages new Sanctions over conflict in Donbas

A group of Ukrainian MPs has registered Draft Law No. 8117 entitled On Amendments to the Law of Ukraine On Sanctions regarding prevention of foreign military aggression against Ukraine. It is proposed to supplement the law with a new type of sanction Ч Уprohibition to carry out economic activity on the territory of UkraineФ.

The following will be subject to sanctions stipulated in clause 25, part one of Article 4:

Ч legal entities registered on the territory of Ukraine or registered in a state recognized as the aggressor state if the owner of any amount of stock (shares, interest) and/or their ultimate beneficial owner (controller) is a resident of the aggressor state or the aggressor state itself, or which are related parties to such entities;

Ч legal entities registered in a third country, 100% of stock (shares, interest) of which is owned by a resident of the aggressor state or by the aggressor state itself, or which are related parties to such entities;

Ч legal entities registered in a third country, less than 100% of stock (shares, interest) of which is owned by a resident of the aggressor state or by the aggressor state itself, or which are related parties to such entities in proportion to share of such entities;

Ч citizens of the aggressor state and stateless persons related to such citizens.

According to amendments to Article 5
of the Law, the decision on application, cancellation of such sanctions and amendments thereto is adopted by the National Security and Defense Council, put into effect by the Decree of the President of Ukraine and approved by the Resolution of the Parliament within 48 hours from the date of issue of the Decree of the President of Ukraine.

Subscribe
The Ukrainian Journal of Business Law

Subscribe to The Ukrainian Journal of Business Law right now and enjoy the most relevant issues on doing business in Ukraine on your device or in print.

All this for just USD 9.99 a month.

 

Subscribe now

яндекс.ћетрика