Business news from Ukraine

PRESIDENT OF UKRAINE INVITES FOREIGN INVESTORS TO INVEST IN ENERGY, INFRASTRUCTURE, TOURISM, IT UNDER PERSONAL GUARANTEES

President of Ukraine Volodymyr Zelensky has called on international business to invest in Ukraine and presented a number of promising projects.
“We have a number of projects to which I, under my personal guarantees, the guarantees of protection, invite foreign businesses. These are energy, infrastructure, transparent land circulation,” he said at the 16th Annual Meeting of the Yalta European Strategy (YES) in Kyiv.
In particular, Zelensky presented a project on land irrigation in the southern regions of the country, an inter-university IT cluster in Kharkiv, a film production center in Kyiv, a new resort on the Black Sea coast in a completely new city, ski resorts in Slavske and Borzhava, the development of Khortytsia island, a large-scale entertainment park for guests from Eastern and Central Europe.
“This is not a complete list of reasons why we invite you to invest in Ukraine,” the president added.

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TOURISM FEE RATE IN LVIV WILL BE 0.2-0.5%

Lviv City Council has set the rates of tourism fee at 0.2% to 0.5% of the minimum wage for Ukrainian and foreign tourists, depending on the cost of their accommodation. The rates will take effect on April 1, 2019.
According to the report on the website of Lviv City Council, the smallest rate of tourism fee is 0.2% of the minimum wage (UAH 8.4) and will be applied if payment for accommodation does not exceed UAH 350 per day.
If the cost of living is UAH 350-750 per day, the tourism fee will be 0.3% (UAH 12.5), UAH 750-1,200 per day some 0.4% of the minimum wage (UAH 16.7).
The rate for tourists who pay more than UAH 1,200/day for accommodation will be 0.5% of the minimum wage (UAH 20.86).
At the same time, Lviv City Council set equal tourism fee rates for Ukrainian and foreign tourists, the report says.
At the same time, it is noted that the rate of tourism fee for tourists living in the private sector is calculated on the basis of the cost of such property per day, regardless of the number of residents.

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BUDGET RECEIPTS FROM TOURISM FEE IN UKRAINE IN 2018 INCREASES BY 29%

Budget receipts from tourism fee in Ukraine in 2018 increased by 29.2%, to UAH 907 million, and taking into account tax payments the tourism industry raised payments by 20.7% last year, to UAH 4.2 billion, the Ministry of Economic Development and Trade has reported.
“This indicates an increase in the volume of domestic tourism flows and the effectiveness of implementation of the decentralization reform, namely local fiscal discipline improvement,” the agency said.
The ministry added there were also qualitative changes in the structure of foreign tourist flow to Ukraine in 2018. According to the ministry’s press release, the State Border Service recorded an increase in the number of tourists from the countries not bordering Ukraine, particularly Europe: from Spain by 68% Britain by 47.3%, Lithuania by 23.4%, Italy by 15.4%, Germany by 13.3%, and France by 9.2%.
The number of tourists from India over the past year rose by 57.4%, China by 38.8%, Japan by 38.3%, Israel by 21.7%, and the United States by 19%, while cross-border traffic, on the contrary, declined, the ministry said. According to the authority, this was achieved thanks to visa liberalization, and an increased offer of direct and low-cost flights.

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TOURISM FEE FOR FOREIGN TOURISTS IN KYIV TO BE UAH 41.73 PER NIGHT

The Kyiv City Council at a meeting on Thursday approved the tourism fee rate in the amount of 0.4% of the minimum wage for Ukrainian tourists and 1% of the minimum wage for foreign tourists. A total of 76 deputies backed the decision. “In 2019, the amount of this fee for domestic tourism will amount to UAH 16.69, for inbound tourism – UAH 41.73. Taking into account the rates, the city budget should receive at least UAH 35 million,” the press service of the Kyiv City Council reported, citing First Deputy Head of the Kyiv City Administration Mykola Povoroznik.
Earlier, he reported that in 2018, the budget of Kyiv city received UAH 33 million, which is almost a quarter more than in 2017.
As reported, Ukraine’s Verkhovna Rada in 2019 changed the base for accruing the tourism fee and obliged tourists living in private accommodation to pay it, according to the law amending the Tax Code and other legal acts on the review of some tax and duty rates (bill No. 9260 from the so-called “budget” package of bills).
In addition, the law changes the tourism fee rates in 2019. In particular, for domestic tourists, the rates should not exceed 0.5% of the minimum wage per day, which from January 1, 2019 will be UAH 20.87, for inbound tourism – up to 5% of the minimum wage (UAH 208.65). The final rates will be determined by local councils, but they will not depend on the cost of accommodation or hotel category.

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UKRAINIAN HOTELS NOT OBLIGED TO COLLECT TOURISM FEE UNTIL LOCAL AUTHORITIES APPROVE RATES

Ukrainian hotels are not obliged to collect tourism fee from their clients until local authorities make a decision to approve the fee rates, Deputy Director of the Tax and Duties Department of the State Fiscal Service of Ukraine Stanislav Beskydevych has said. “The tourist fee is a local tax and is charged in accordance with the requirements of the Tax Code, but taking into account the decisions of local governments that implement the mandatory elements of the tax,” Beskydevych said at a roundtable in the parliamentary committee on family issues, youth policy, sports and tourism.
He recalled that the travel tax is charged in accordance with Article 268 of the Tax Code, which was amended at the end of 2018. In particular, the tax base has been changed, tax rates have been differentiated depending on the consumer category, and the possibility of an advance payment of the tax has been introduced.
At the same time, the taxman said that in order to implement the law, local authorities should set rates, determine the possibility of an advance payment or the absence of this possibility.
“While local councils have not established specific elements of the tax rate, in fact this tax is not paid, it is zero. We cannot collect tax without a decision of local councils,” Beskydevych said.
According to him, for its part, the State Fiscal Service must publish a modified form of tax declaration, which will be submitted in the first quarter of 2019.
“Today we have already developed draft changes. They are undergoing internal coordination. In the near future, they will be presented for public discussion, after which they will be sent to local self-government agencies,” Beskydevych said.

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