Business news from Ukraine

MPS PROPOSE REDUCING VAT FROM 20% TO 15%, AUTOMATIC TAX REFUND WITHOUT RESTRICTIONS – DRAFT TAX REFORM

KYIV. Oct 28 (Interfax-Ukraine) – Members of the Verkhovna Rada have proposed the reduction of value added tax (VAT) from 20% to 15% and the introduction of the automatic tax refund for all amounts confirmed by the electronic VAT administration system.

The provision is contained in the draft tax reform registered in the parliament by 114 deputies on October 26.

The bill provides for the abolition of restrictions on automatic VAT refunds, the introduction of public registration of applications for budgetary compensation, and the disclosure of information about the status of VAT refunds for certain taxpayers and the amount of VAT refunds they claimed. The MPs also proposed the introduction of compulsory VAT refunds according to the order of any given application.

The MPs also offered to solve the problem of the erosion of taxpayers’ working capital due to the increase of the “overdraft” incurred by monthly tax liabilities payable to the average monthly accrued tax liabilities of the taxpayer, as well as to introduce the possibility of recording tax bills late without any replenishment of VAT accounts via the changing the parameters of the formula.

The draft document also states that supervisory authorities should be banned from canceling the amount of tax credit on formal specifics: tax credit can be canceled if an error affects the individual tax number of taxpayers or if it is formed by non-taxable transactions.

UKRAINE, ITALY CONSISTENTLY EXPANDING BILATERAL COOPERATION WITHIN FTA WITH EU – KLIMKIN

KYIV. Oct 28 (Interfax-Ukraine) – Ukraine’s Minister of Foreign Affairs Pavlo Klimkin has stressed the importance of the documents signed between Ukraine and Italy in the context of the implementation of a free trade area (FTA) between Ukraine and the EU.

“The implementation of a free trade area between Ukraine and the EU will start in full from January 1 next year and, of course, we are working to use the entire potential, all the possibilities that will be laid in it,” he said at a briefing with Foreign Minister of Italy Paolo Gentiloni in Kyiv.

He expressed satisfaction that the Ukrainian and Italian parties in their cooperation covered various spheres of interaction.

“In the future we will move to cooperation with the involvement of the regions of Ukraine and Italy,” Klimkin said.

According to him, the documents signed by Ukraine and Italy on October 27 are the evidence of a fruitful work.

“This testifies about special attention we pay to the development of economic cooperation,” the Ukrainian foreign minister stressed.

UKRAINE, ITALY SIGN DOCUMENTS ON COOPERATION OVER SMALL, MEDIUM BUSINESSES, AGRICULTURE

KYIV. Oct 28 (Interfax-Ukraine) – The foreign ministries of Ukraine and Italy have agreed to cooperate on assisting small and medium businesses and agriculture.

According to an Interfax-Ukraine correspondent, three relevant documents were signed by Ukrainian Foreign Minister Pavlo Klimkin and Italian Foreign Minister Paolo Gentiloni.

The foreign ministers of the two countries signed the road map of cooperation between Ukraine and Italy for 2016-2017, the memorandum of understanding between the Ministry of Economic Development and Trade of Ukraine and the Ministry of Economic Development of Italy with respect to cooperation in the sphere of small and medium business sector, and a memorandum on cooperation in agriculture between the Ukrainian Ministry of Agricultural Policy and Food and the Italian Ministry of Agricultural, Food and Forestry Policies (the third document from the Ukrainian side was signed by Agriculture Minister Oleksiy Pavlenko).

EBRD COULD PROVIDE $37 MLN LOAN TO MV CARGO TO BUILD GRAIN TERMINAL AT YUZHNY PORT

KYIV. Oct 28 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) is mulling the provision of a $37 million loan to MV Cargo LLC to finance the construction of a grain terminal at Yuzhny port (Odesa region).

The EBRD said on its website that the total project cost is $130 million.

As reported, Cargill, the Ukrainian Sea Ports Authority and M.V. Cargo LLC have signed a tripartite memorandum of intent to realize an investment project at Yuzhny seaport.

The document confirms Cargill’s intention to acquire 51% in a transshipment terminal, which M.V. Cargo stevedoring company will build at Yuzhny seaport. Under the terms of the memorandum, before construction the Ukrainian Sea Ports Authority is to establish a water area on the approach to the terminal with an appropriate level of dredging.

The terminal will allow Cargill to handle grains, cereals and other goods. The capacity of the first phase of construction will amount to 5 million tonnes. The second phase would increase the capacity by another 2-4 million tonnes.

It is planned to launch the terminal in 2017.

SIEMENS INTERESTED IN ENTERING UKRAINIAN LOCOMOTIVE, TRAM PRODUCTION MARKET – UKRAINIAN MINISTER

KYIV. Oct 27 (Interfax-Ukraine) – Siemens is interested in entering the Ukrainian locomotive and tram production market, Ukrainian Infrastructure Minister Andriy Pyvovarsky said after the Ukrainian-German business forum in Berlin.

“We will continue talks on the format of this cooperation at the level of top managers and experts,” he wrote on his Facebook page.

The minister also said that at a meeting in the Transport Ministry of Germany an agreement on joint operations in the railway and road construction sectors, coordination of efforts on the Silk Road initative, and the further exchange of experience had been reached.

“State Secretary at the Federal Ministry of Transport, Building and Urban Development Rainer Bomba will again come to Ukraine in December. We will exchange with experts again: our [experts] will go to them and German [experts] – to us. We’re working on the joint action plan and clear KPIs from this cooperation,” he wrote.

The minister also held a meeting in the Federal Ministry of Economic Affairs and Energy of Germany.

“We discussed the credit from KfW to restore Donbas’ infrastructure. Germany is ready to consider the possibility of increasing its aid to Ukraine,” he said.

Earlier, Director of the Integrated Transport System Department at Siemens Ukraine Dmytro Chernenky said that Siemens is not currently interested in creating a joint venture (JV) to manufacture locomotives in Ukraine as the company is only interested in spare parts supplies.

CANADA TO INVEST CAD30 MLN IN SMALL, MEDIUM BUSINESS PROJECTS IN UKRAINE

KYIV. Oct 27 (Interfax-Ukraine) – The Canadian government is ready to spend CAD 30 million on small and medium-sized businesses’ projects in Ukraine.

“We’ve allocated and will use CAD 30 million to support the projects of small and medium [sized] businesses in Ukraine,” Ambassador of Canada to Ukraine Roman Vaschuk said at a press conference in Kyiv.

According to him, over the past two years the Canadian government has provided Ukraine with CAD 700 million, of which CAD 400 million is a loan of 1.5% per annum, and CAD 300 million is support for investment in various projects, including for providing military aid and ammunition supplies to the Ukrainian military.

Vaschuk said that for the first eight months of this year Canada increased goods exports to Ukraine by 45.6%, to CAD 150 million compared to the same period last year.

As reported, in mid-July this year Ukraine and Canada completed negotiations on establishing a free trade area (FTA).

The provisions of the draft agreement on a free trade area between Ukraine and Canada provide for deepening trade and economic cooperation, including on trade in industrial and agricultural goods, intellectual property protection, and public procurement regulation.