The Verkhovna Rada intends to amend the Tax Code of Ukraine to support culture, tourism and creative industries.
Some 273 MPs voted in favor of bill No. 3851 at first reading.
According to an explanatory note to the bill, the document proposes to introduce tax mechanisms to provide state support to the spheres of culture, tourism and creative industries in order to prevent their stagnation, preserve and create new jobs.
The bill, in particular, proposes not to tax corporate profits, income of individuals, and a single income tax in the form of a cultural grant.
According to the bill, a cultural grant means “targeted assistance in the form of funds or property, which are provided on a free and irrevocable basis at the expense of the national and/or local budgets, international technical assistance for the implementation of a project or a program in the fields of culture, tourism and creative industries.
In addition, in terms of value added tax, it is proposed not to tax operations on import into the customs territory of Ukraine (import of goods) that are part of the national cinematic heritage.
It is also proposed not to tax certain operations for the supply of national films until January 1, 2025, and from January 1, 2023 to January 1, 2025, not to tax operations on the supply of services for the demonstration, distribution and screening of national films and foreign films that are dubbed, voiced in the state language on the territory of Ukraine, provided that such films are adapted, in accordance with the legislation, in the Ukrainian language version for persons with visual and hearing impairments.
BENEFITS, CREATIVE INDUSTRIES, CULTURE, SUPPORT, TAX, TOURISM
Ukrainian winegrowers and winemakers have asked the president and the government to reduce tax burden to minimize the economic consequences of the COVID-19 pandemic and the national quarantine. According to Bayadera Group’s press service, the initiative was supported by more than 50 vineyards and major wineries.
“In an open letter, they proposed, in particular, to introduce a special taxation regime for agricultural producers engaged in the cultivation of perennial plantations, viticulture and winemaking. Due to the worsening economic situation in the industry and adverse climatic conditions in the Black Sea region, this year they urge the abolition of certain taxes and reduce financial burden,” Bayadera Group said.
In addition, due to the negative consequences of the pandemic, national producers urge the government to support them by providing more loyal terms of representation in retail chains, increasing the share of Ukrainian wine and introducing duties as a protective mechanism.
“A significant increase in the import of alcoholic drinks in Ukraine has been observed over the past three years. For example, in 2019 the share of imported wine in retail chains was 58%, sparkling wine some 51%, vermouth and aperitifs some 69%,” Bayadera Group noted.
The winegrowers and winemakers hope that in connection with the difficult situation resulting from the pandemic and the introduction of quarantine, the authorities will take the proposed measures in the near future.
The Aurum Group has said that it is necessary to annul the land tax in April 2020 to support business for the period of quarantine. The group paid attention of the government that ambiguous interpretations of the provisions of the so-called “anti-crisis law” adopted on March 30, according to which, in particular, the employer can be exempted from paying a fee for the use of property, will increase the loss of business from the consequences of quarantine.
“In March, in connection with the quarantine, the business was exempted from paying land tax, but in April, when the situation became even worse, the corresponding changes were not made,” the press service of the group told Interfax-Ukraine.
“Given the specifics of the activities and location of Aurum Group enterprises, the proportion of land tax of the tax burden of some companies ranges from 15% to 70%. In addition, in some regions, the land tax rate has doubled since January 1, 2020,” the press service said.
According to the company, the law on additional social and economic guarantees in connection with the spread of the coronavirus disease (COVID-19) provides an opportunity not to pay rent in commercial relations. However, in April, business must pay for renting land and real estate tax to the state.
The Ministry of Digital Transformation of Ukraine together with the relevant committee of the Verkhovna Rada are working on the preparation of a tax reform for the IT industry, which provides for the establishment of a single tax at the level of 4-7% of the companies’ turnover. Deputy Minister of Digital Transformation Oleksandr Bornyakov gave this information on his Facebook page.
“We propose discussing a single tax for legal entities without a turnover limit and setting it at 4-7%… According to this regime, a legal entity-exporter of services will pay a single tax and will be a tax agent for an employee, paying two single social security contributions and a military tax,” Bornyakov said.
He also said that the following requirements for those who join this taxation regime are being discussed: staff of more than 10 employees; the share of exports in profit and the share of the salary fund in the cost of production being more than 75%; and the average salary being at least five minimum wages.
According to the Ministry of Digital Transformation, this will create legal working environment for the industry, make it more attractive for investment, creating a transparent and understandable corporate structure. In addition, this will create equal competitive working conditions in the industry, as well as conditions for the export of other services.
“At the same time, the model preserves the mechanism for ensuring social guarantees for employees and does not increase the tax burden and administration. After all, on the one hand, tax and reporting are introduced for IT companies, and on the other, we cancel a number of taxes for employees,” the deputy minister said.
He also cited statistics according to which in the first half of 2019, according to the Ministry of Digital Transformation, 158,000 IT private entrepreneurs with income of UAH 52.3 billion worked in Ukraine. At the same time, in Ukraine, there are only about 60,000 officially employed employees of IT companies, whose payroll amounted to about UAH 6.5 billion in the first half of last year.
“And no, we are not sure that this is the only right decision. But, after spending hours of analysis, we consider it to be the best idea that will literally create an industry where not 200,000 legally unrelated private entrepreneurs will work, but fully-featured transparent companies,” Bornyakov said.
He also recalled that the previously formulated idea to create a fifth group of private entrepreneurs for IT specialists was criticized because it violated the principles of equality of taxpayers and did not eliminate any risks in the system.
As reported, previously a group of 20 deputies of the Servant of the People parliamentary faction proposed to the parliament to exempt startups from taxes for a period of nine months from the moment of their registration, making appropriate changes to the Tax Code of Ukraine.
For this purpose, it was planned to introduce an additional fifth single tax group, which will include startups using exclusively cash registers and/or cash settlement software and which income during the first nine months of activity does not exceed UAH 300,000.
The Blockchain Association of Ukraine (BAU) has proposed to make Ukraine competitive jurisdiction for companies dealing with cryptocurrencies and blockchain technology and proposed some principles for being implemented into the law, including the introduction of 5% tax on deals with cryptocurrency.
The respective document was posted on the association’s website last week.
According to the text of the document, proposals for implementation in the legislation in the field of regulation of cryptocurrencies were developed with the aim of accelerating the pace of development of this market.
In particular, according to the association, cryptocurrency exchange and sale transactions should not be subject to VAT and cryptocurrency suppliers should not be tax agents of individuals. For transactions with cryptocurrency, personal income tax should be levied at a rate of 5%, and the tax base should be net profit for the reporting year.
Blockchain Ukraine also proposes to introduce licensing of the exchange of cryptocurrency for fiat currencies.
The BAU said that the proposals of the association were accepted for consideration by the Ministry of Digital Transformation of Ukraine and the interfactional parliamentary association of the Verkhovna Rada Blockchain4Ukraine.
In the near future, it is planned to sign a memorandum of understanding and cooperation between the Ministry of Digital Transformation and the community of blockchain and crypto companies.
The Blockchain Association of Ukraine brings together experts in the blockchain industry and is a non-profit organization that actively promotes the integration of blockchain technology into the Ukrainian economy. The main mission of the association is to develop multilateral dialogue, the result of which will be consensus in all areas of activity.
In 2019 Ukraine is required to implement new international tax rules at the legislative level in accordance with its obligations . How not only to lose from their introduction, but also to win – will be discussed by representatives of the authorities, consultants and business at the National Forum “INTERNATIONAL TAXATION: TRANSFORMATION OF BUSINESS” in Kiev on September 20 .
The new government’s strategies and first steps towards changing the rules of international taxation, combined with best-in-class consultancy practices, will be on the focus of the International Forum for International Taxation: BUSINESS TRANSFORMATION 20 September at the Park Inn Hotel in Kiev .
Due to loopholes and inconsistencies in national and international tax law, companies reduce or evade income tax liabilities, which causes Ukraine to lose budget revenues. Ukraine has announced changes to all 77 tax treaties it has signed. Recall that on February 28 this year, the Verkhovna Rada ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) .Thus , the new Parliament will immediately submit bills to counteract the erosion of the tax base and profit under taxation.
2020 or 2021? What and when does the President, the new Verkhovna Rada and the Government implement the world transparencies of business in Ukraine?
What to change this autumn in the legislation of Ukraine with regard to strengthening the control of international transactions?
What should business do for normal operation in the new global transparency?
When and how is the automatic information exchange system operating in Ukraine?
What will be the strength of TP control in 2019-2020?
How to minimize risks in the new conditions?
How to protect business from the pressure of controlling bodies and avoiding penalties?
Forum Speakers :
Gabriela Miranda , Project Manager in Ukraine , Eurasia Program, OECD
Sergey Verlanov , Chairman of the DPS
Danylo Getmantsev , Member of Parliament of the 9th convocation , President of the Association of Tax Advisers
Elena Makeeva , Chairman of the Board of Directors Audit firm ” Aksenova and partners ”
Geneva Group International, Deputy Minister of Finance (2015-2016), Advisor
performing duties of head of DFS
Anna Sergiychyk, Manager of RoyaltyRange
Maksym Lavrynovych, Managing Partner, Lavrynovych & Partners Law Firm
Dmytro Savchuk , Associate Partner, Lavrynovych & Partners Law Firm
Tetyana Ostrykova , Member of Parliament of Ukraine, 8th convocation, eepert in international taxation
Nina Yuzhanina , Member of Parliament of Ukraine, 9th convocation
Alexander Lepetyuk , Acting Director of the Department of Transfer Pricing and International Taxation of the State Tax Service of Ukraine
Lyudmila Palamarchuk , Director of the Department , Ministry of Finance of Ukraine
Oleksiy Zadorozhny, Head of the Department of Profit Tax Methodology of the Department of Methodological and Rulemaking Work of the State Fiscal Service of Ukraine
Yevhen Kozlov, Senior Project Manager, Reform Support Office at the Ministry of Finance of Ukraine
Evgeniya Abrosimova , Partner, Head of the Transfer Pricing Department of Audit- Invest I
Ivan Shynkarenko, Partner, KM Partners
Oleksandr Shemyatkin , Partner, KM Partners
Vyacheslav Kruglyak , Head of the Transfer Pricing Audit Department of the State Fiscal Service of Ukraine
Tatiana Savchuk, auditor of ID Legal Group . Head of ID Legal Transfer Pricing Practice
Group
Tatiana Kamenska , Chairman of the Audit Chamber of Ukraine
Irina Sivolap , Head of the Interaction Department for Transfer Pricing of the State Fiscal Service of Ukraine
Olga Yelchenko , managing partner of “Audit- Invest ”
Andrey Segal , lawyer, contract partner of AMBER Law Firm
Victoria Fomenko , partner, head of the practice of tax and customs law international law firm « INTEGRITES »
WE WELCOME TO PARTICIPATE:
CEOs, CFOs, heads of financial and tax services, chief accountants and heads of legal departments of leading Ukrainian and international companies.
REGISTRATION on the FORUM: (https://rating.zone/event/20-september-2019/)
by phone: +380 (44) 394 88 83, +380 (93) 029 84 07 , or e- mail : info@rating.zone
The Forum is held with the participation of the Verkhovna Rada Committee on Tax and Customs Policy, the Ministry of Finance of Ukraine and the State Tax Service of Ukraine. Partners of the Forum are: – RoyaltyRang e – Strategic Partner; Audit- Invest is a partner; Forum partners -, ID LEGAL GROUP , UK ” Amber “, Law firm EUCON , Law firm “KM Partners” , Integrites , OOO “Borey”. Information partners – Interfax-Ukraine – General News Partner; Ukraine Business Review; Ukrainian News Agency, Observer , ACC , MaxEvents , TAX Link .
Organizers Forum: Journal “Rating. Business in official numbers, Market.Info Agency .
