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
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 : firstname.lastname@example.org
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 .
The Cabinet of Ministers has divided the State Fiscal Service into the State Tax Service and the State Customs Service, the Ministry of Finance has reported on its website. “The reform of the State Fiscal Service will create the basis for the demilitarization of tax authorities, improve the quality of services provided to taxpayers, increase the transparency and accountability of work of tax and customs authorities,” the press service of the agency said citing Deputy Finance Minister Serhiy Verlanov. According to the approved concept of reforming the State Fiscal Service, the tax police will be included in the State Tax Service. Both services will be created as separate central executive bodies, coordinated by the Cabinet through the Minister of Finance.
A commission, headed by Verlanov, will be created for the service reorganization.
The Cabinet intends to hold a tender for the leaders of both services within three months after the approval of a government resolution, the ministry said.
The resolution takes into account the recommendations of the IMF, the Finance Ministry added.
Kyiv City Council on October 18 at second reading passed a decision to set up the rate of a tax on land meant for the construction and maintenance of high-rise buildings at 0.01% of the recognized estimated monetary value of land. The current rate is 1%.
The respective changes are stipulated in Kyiv City Council’s decision on the establishment of local taxes and fees in the city of Kyiv dated June 23, 2011, which was taken as a basis on July 19, 2018.
Leonid Antonenko, a member of the Kyiv Team group of deputies, said that the changes had been introduced to provide reduced rates for multi-apartment building co-owners associations, however, in its current state the adopted norm can be enjoyed by real estate developers as well.
“Real estate developers have been given a gift – a tax on land meant for the construction and maintenance of high-rise buildings that was decreased by a factor of 100! The first decrease from 1% to 0.1% was voted for in July at first reading,” the deputy said in a post on his Facebook page.
The introduction of an exit capital tax, envisaged by the draft law on amendments to the Tax Code of Ukraine regarding the tax on exit capital (No. 8557), will draw the attention of tax authorities to companies carrying out foreign economic operations, expert for transfer pricing at Evris law firm Yekateryna Kuzmina has told Interfax-Ukraine. “Companies that carry out foreign economic operations will be under a special attention of tax authorities in case this tax is introduced. In view of the fact that the exit capital tax is focused on foreign economic transactions, the controlling authorities will pay closer attention to compliance with transfer pricing rules, since this will be one of the main instruments to ensure new tax payment,” she said.
The expert noted that since the exit capital tax will have to be paid for each specific operation, the controlling bodies will no longer need to conduct long-term tax inspections as to the correctness of determining the financial result, in theory it will be enough for them to analyze bank statements and contracts.
“Thus, it is likely that the controlling bodies will concentrate their entire attention on initiating and conducting inspections,” Kuzmina believes.
She noted a number of changes in transfer pricing that will occur after the alleged adoption of the exit capital tax, in particular, small businesses will be required to prepare reporting on transfer pricing, the accumulated losses or other costs will not be able to compensate for the need to pay the exit capital tax to the budget, in addition, control over compliance with transfer pricing rules will be tightened.
Kuzmina noted that the practice of the exit capital tax is unpopular in the world – such taxes exist only in Estonia (since 2000), Georgia (since 2017), and Latvia (since 2018). It is assumed that the introduction of this tax will stimulate Ukrainian companies to invest in the development, building up business or production.
“This is due to the fact that if companies reinvest the earned funds in the development and do not withdraw resources from the enterprise by paying dividends, irrevocable financial assistance, free transfer of goods, labor and services, royalties, interest and other operations that lead to withdrawal of capital from the company, there will be no object for exit capital tax and the companies will not pay the tax. Thus, the importance of transfer pricing rules that regulate foreign economic operations rises significantly,” the expert summed up.
Non-banking financial institutions of Ukraine in January-June 2018 paid profit tax in the amount of UAH 353.9 million to the national and local budgets, which is UAH 148.4 million or 72.2% more than a year ago, a member of the national commission for financial service markets regulation of Ukraine Oleksandr Zaletov has told Interfax-Ukraine.
“The aggregate amount of the paid profit tax by non-banking financial institutions, according to the Treasury, exceeded the similar indicator of banks by 8.7%, or UAH 28.2 million,” he said.
He also said that the upward pace of fiscal revenues is associated with the growth of services provided by non-banking financial institutions.
In the first quarter of 2018, the following financial services were most popular: third-party liability insurance (94.7% increase), financial leasing (76.2%), pension contributions to private pension funds from individuals (34%), life insurance (30.6%), tourist insurance (26.8%), contributions to the construction financing funds (23.3%), medical insurance (21.7%), car insurance (20.9%), deposits in credit unions (14.7%) and loans granted by credit unions (7.3%).
In Zaletov’s opinion, if several years ago the driver of growth in non-banking financial markets was financial risk insurance and factoring, now growth is primarily related to the activation of financial services oriented to the social needs of the population. The further development of this segment will depend on the adoption of bill No. 8415 dated May 25, 2018 amending some laws of Ukraine regarding state regulation of financial services markets aimed at creating a systemic basis for the recovery and development of non-banking financial services markets in modern conditions.