In 2023, the agricultural holding Continental Farmers Group paid UAH 1.4 billion to the budgets of all levels and allocated UAH 37.7 million for social projects, the holding’s press service said on Tuesday.
“As an honest and responsible business, we constantly report annually on taxes paid and financial support to the communities we cooperate with. I would like to emphasize that Continental Farmers Group is and will remain a reliable long-term partner for both its shareholders and the state, especially in this difficult period,” the press service quoted Georg von Nolken, CEO of the agricultural holding, as saying.
According to the report, support for Ukrainian defenders remains an integral part of Continental’s social responsibility policy. Since February 2022, the agricultural holding has allocated UAH 55.1 million to help the military.
Mriya Agro Holding and CFG, united under the name Continental Farmers Group, have been operating as a single business since November 2018, when Mriya entered into an agreement with international investor Salic UK to sell its assets.
Salic was founded in 2012. Its sole shareholder is the Saudi Arabian Public Investment Fund, which invests in agricultural and livestock production.
According to the results of 2023, ATB Group paid taxes and fees to the budgets of all levels, including customs duties and unified social contribution, totaling UAH 25.06 billion, which is UAH 4.62 billion more than in 2022, the company’s press service reports.
According to the report, in particular, the state budget received UAH 16.49 billion, local budgets – UAH 6.02 billion, and UAH 2.55 billion was allocated to trust funds.
Last year, the corporation’s flagship enterprise, ATB-Market LLC, paid taxes and fees totaling UAH 19.45 billion (in 2022 – UAH 15.63 billion). Last year, the state budget received UAH 12.41 billion from ATB-Market LLC, UAH 5.12 billion in taxes and fees were paid to local budgets, and UAH 1.92 billion to trust funds.
ATB Corporation is an association of large Ukrainian companies operating in such business areas as retail, asset management, food production and sales, and sports and recreation services. The corporation employs over 70 thousand people.
As of June 1, 2023, the corporation’s retail network consisted of 1188 stores compared to 1316 stores in January 2022. Last year, the chain’s turnover amounted to UAH 176.9 billion, which is 2% lower than in 2021 (UAH 179.8 billion).
The total amount of taxes to be paid by OTP Bank in 2023 is UAH 4.8 billion.
The largest part is income tax – UAH 3.7 billion. The amount of military duty for 2023 is UAH 32.6 million. VAT, local taxes, non-resident tax, personal income tax, unified social tax, and unified social tax make up the rest of the total amount of payments by OTP Bank.
We would like to remind you that OTP Bank was ranked third in terms of capital adequacy according to the results of the stability assessment conducted by the National Bank of Ukraine. Thus, according to the asset quality ratio (AQR), the core capital adequacy ratio (N3) of OTP Bank amounted to UAH 7 billion 234 million, or 19.09%, with the required level of 7%.
Regulatory capital (N2) at OTP Bank amounted to UAH 12 billion 315 million. Its adequacy ratio is 32.5% with the required level of 10%.
In 2023, Astarta Agro Holding, the largest sugar producer in Ukraine, paid UAH 2.31 billion in taxes and fees to the budgets of all levels, up 42% compared to 2022, the company’s press service reported on Facebook.
According to the report, over UAH 1.31 billion of this amount went to local budgets of territorial communities in Poltava, Khmelnytsky, Vinnytsia, Ternopil, Zhytomyr, Chernihiv, and Kharkiv regions of Ukraine.
“In terms of the entire team of the agro-industrial holding in 2023, Astarta paid UAH 343 thousand of taxes per employee. In total, during the full-scale war alone, our company transferred over UAH 3.84 billion to the budgets of all levels. This is our contribution to strengthening the country’s defense capability, increasing the economic resilience of local communities, enhancing social responsibility and transparency of Ukrainian business,” said Viktor Ivanchuk, founder and CEO of the agricultural holding.
In addition, Astarta, together with its Ukrainian and international partners, also continues to implement social initiatives as part of the Common Help Ukraine humanitarian project. As of today, the financial value of charitable contributions and humanitarian aid provided by the project already exceeds UAH 1.062 billion.
“Astarta is a vertically integrated agro-industrial holding company operating in eight regions of Ukraine. It comprises six sugar factories, agricultural enterprises with a land bank of 220 thousand hectares and dairy farms with 22 thousand cattle, an oil extraction plant in Globyno (Poltava region), seven elevators and a biogas complex.
In the third quarter of 2023, the agricultural holding earned EUR1.24 million in net profit, down 27.7 times compared to the same period in 2022. Astarta’s revenue decreased by 14.4% to EUR104.75 million, gross profit by 2.7 times to EUR26.96 million, operating profit by 7.6 times to EUR6.79 million, and EBITDA by 42.7% to EUR97.25 million.
Due to significantly better performance in the first half of this year compared to the first half of last year, in the first nine months of 2023, net profit decreased by 9.8% to EUR 55.97 million, while revenue increased by 14.8% to EUR 392.00 million. The company’s gross profit increased by 3.0% to EUR 151.91 million, while operating profit decreased by 15.9% to EUR 79.91 million and EBITDA by 10.8% to EUR 116.63 million.
The State Tax Service (STS) has planned 3,242 inspections of businesses – both companies and individual entrepreneurs – for 2024. In more than half of the cases, documentary inspections of companies will take place. Most often, the tax authorities will visit businesses in Kyiv, and the most popular industry for company audits will be wholesale trade.
The State Tax Service has planned 2,328 inspections of companies and 914 inspections of sole proprietorships for 2024. This is 19% less than in 2023, when the tax authorities visited 2,551 companies and 1,461 individual entrepreneurs.
This is reported by Opendatabot, citing data from the State Tax Service.
In the vast majority of cases, 61.6%, tax authorities will check company documents. In 28% of cases, the State Tax Service will visit fops. At the same time, inspections of businesses that have questions about military duty and unified social tax will be halved by 2023, down to 156 companies. Inspections of non-resident financial companies account for only 5% of the plan.
Kyiv has the highest number of inspections – 590. Dnipropetrovs’k region is in second place with 205 inspections, followed by Lviv region with 156.
Businesses operating in the wholesale trade sector will be inspected most often – they account for 22% of the total number of company inspections. In 2024, businesses in the field of agriculture and hunting will also be the most frequently inspected by the tax authorities – 14.8% of inspections. The top is rounded out by inspections of retail businesses – 6.9%.
You can find out whether your business or partners are scheduled for inspections for free in the Opportunity Bot. To do this, send the bot the company code. If the business is on the tax plan, the relevant information will appear in the company card.
The law on raising the bank profit tax from 18% to 50% in 2023 and to 25% in the following years was adopted without discussions with banks, it is discriminatory and has long-term negative consequences for the investment and business climate in Ukraine, said Oleksandr Pysaruk, Chairman of the Board of Raiffeisen Bank (Kyiv).
“Excessive profits of banks cannot be determined based on the results of one year. Retrospective taxation of excessive profits for 2023, as well as an increase in bank profit taxes in the future, is unreasonable and discourages bank shareholders from investing in this business,” the head of Ukraine’s largest bank with foreign capital said in an interview with Interfax-Ukraine.
Pysaruk emphasized that he supports the need to temporarily raise the bank profit tax in the current circumstances and has publicly stated this. According to him, the version of the law approved in the first reading to increase the tax to 36% for 2024-2025 was discussed with banks and was fair.
According to the banker, the retroactive taxation approved without discussion at the end of the year creates a very dangerous precedent and tax uncertainty for all economic agents, especially for foreign investors. “Retrospective is bad in itself, but when retrospective is linked to 50% instead of the existing 18%, it is a shock,” he added.
Commenting on the 50% rate, Pysaruk explained it as a desire to collect an additional 0.3% of GDP from banks as part of the revision of the program with the IMF, when state-owned banks are already paying large dividends.
“In fact, the payers of this record-high tax are private banks, of which the largest tax burden falls on banks with foreign capital. And the retrospective taxation is compounded by disproportionate and discriminatory treatment of private shareholders of the banking system,” the banker stated.
He noted that the problem is also the unfair singling out of banks from the rest of the economy in terms of raising their income tax to 25% on a permanent basis in the coming years.
“Why are they the only ones to receive the tax increase? Why 25% and why permanently? Why not 28%, 22%, or 20%? … This is an example for investors and business in general: if you are transparent, you will be taxed even more. And at the same time, you leave a bunch of economy that does not pay taxes or pays little,” Pysaruk said.
In his opinion, the tax on banks starting in 2024 should have been discussed as part of the preparation of the National Revenue Strategy prescribed in the program with the IMF, which the Ministry of Finance is obliged to present by the end of this year and which declares the expansion of the tax base.
The head of Raiffeisen Bank also emphasized that banks are a cyclical business, and its profitability should be assessed over a fairly long period of time, on average 7-10 years. According to him, in the period from 2013 to 2023, the total return on equity of Ukrainian banks (excluding PrivatBank and its nationalization) was 69%, i.e. approximately 6% per annum in hryvnia, while the cost of capital in any year after 2013 exceeded 20% per annum.
“That is, the last ten years have been unprofitable for bank shareholders. The situation is much worse for foreign shareholders of Ukrainian banks who calculate their total income in euros. Over the past ten years, the banking system has suffered a total loss of 52%, approximately -8% per annum in euros,” Pysaruk said.
He explained this by the large losses of Ukrainian banks in 2014-2016, the almost fourfold devaluation of the national currency and the inability to receive dividends for several years.
“Today, the banking business in Ukraine is unprofitable. The cost of capital is very high due to high inflation and very high risks in the country. And I’m not even talking about the war,” stated the Chairman of the Board of Raiffeisen Bank.
In his opinion, the adopted law will discourage strategic banking investors from participating in the privatization of state-owned banks, which is necessary given their high market share.
“We may be left with a banking system with an excessive share of state-owned banks for a very long time,” Pysaruk said.
He added that this approach also does not stimulate foreign direct investment in other industries. “This is a very bad story for a country that needs external assistance both during the war and afterwards for development,” the banker said.
Commenting on the impact of the increased tax directly on Raiffeisen Bank, the Chairman of the Board said that in the short term there will be no significant impact, as the bank has excess capital and liquidity. “We will pass the NBU’s stress test without any problems and will continue to support our clients,” Pysaruk said.
At the same time, he believes that some other banks that are not as well capitalized may face problems.
“The National Bank will probably have to mitigate its plans to recapitalize banks, because it was the party that agreed to this decision. Because taxing banks in such a cruel, unfair way and then demanding capital is an additional horror story for investors,” the banker said.
He added that, combined with the NBU’s further increase in capital buffer requirements in line with EU standards, the higher corporate tax will reduce banks’ ability to generate capital to meet the increased demand for loans as Ukraine develops after the war.
Pysaruk also suggested that some banks may appeal to an international court because the adoption of such a law violates the provisions of intergovernmental agreements on investment protection, citing Spain as an example where banks challenged the windfall tax.
The Chairman of the Board of Raiffeisen Bank, who was formerly the First Deputy Governor of the National Bank of Ukraine and then worked for the IMF for three years, also expressed regret that the Fund had agreed to such a tax increase. According to Pysaruk, this is due to the program’s basic assumptions, which are under threat, of ending the war in mid-2024 and a certain level of international assistance.
“The IMF has to draw up a macroeconomic model and calculate the debtor’s ability… to repay the loan. And this tax was probably needed for such a model to be developed. But the price of the issue is exactly this: in order to save this program and continue it, laws are being introduced that reduce Ukraine’s already low investment attractiveness and may hinder plans to attract private foreign capital to rebuild Ukraine after the war,” the banker said.
According to the National Bank of Ukraine, as of October 1, 2023, Raiffeisen Bank ranked 4th in terms of assets (UAH 196.35 billion) among 63 banks operating in the country. Its net profit in January-September this year amounted to UAH 6.14 billion compared to UAH 2.39 billion in January-September last year.
In October 2005, the bank became part of the Austrian banking group Raiffeisen Bank International AG. Currently, Raiffeisen Group owns 68.21% of the bank’s shares, while the European Bank for Reconstruction and Development owns 30%.
