The Verkhovna Rada at first reading passed bill No. 3656 on amending the Tax Code of Ukraine with regard to the rate of value added tax on transactions for the supply of certain agricultural products that proposes to reduce the VAT rate from 20% to 14% for the agricultural sector. Some 233 MPs voted in favor of the draft law concerned.
The document provides for amending Paragraph 193.1 of Article 193 of the Tax Code of Ukraine by adding a new subparagraph ‘g’ and establishing 14% VAT on operations for supply to the customs territory and admission into the customs territory of Ukraine of agricultural products classified by the following foreign economic activity codes: 0102 (live bovine animals); 0103 (live swine); 0401 (regarding whole milk), 1001 (wheat), 1002 (rye), 1003 (barley), 1004 (oats), 1005 (corn), 1201 (soybeans), 1204 00 (linseed), 1205 (rapeseeds), 1206 00 (sunflower seeds), 1207 (other oil seeds and oleaginous fruits,), 1212 91 (sugar beet).
“First of all, such a reduction will reduce the tax burden on agricultural producers that in turn will reduce the cost of raw materials by the amount of VAT reduction exactly for processors of such products, whereas, in general, reducing the VAT rate on transactions for selling grains, oilseeds and whole milk will not lead to budget losses, since these goods are not sold to the final manufacturer that is actually VAT payer,” said Mykola Solsky, the head of the Ukrainian Parliamentary Committee on Agrarian Policy and Land Relations, at the presentation of the bill.
According to the explanatory note to the document, which refers to the analysis carried out by UCAB based on data from the USDA and market operators for certain types of oilseeds and grains (sunflower, rapeseed, corn), reducing the VAT rate from 20% to 14% will not lead to large-scale distortions in the structure of VAT receipts/losses for any of the stakeholders (state/enterprise).
Verkhovna Rada has passed at first reading the President’s draft law on reducing value added tax (VAT) to 7% for representatives of culture, tourism, creative industries.
An Interfax-Ukraine correspondent has reported that some 273 MPs voted in favor of bill No. 3851 on amending the Tax Code of Ukraine to support culture, tourism and creative industries at first reading at the meeting on Tuesday, September 15.
“Since our field of work mainly requires offline performance and it is extremely difficult to shift to online mode, therefore we believe that… theatre, opera, ballet, music, concert, other performances, … production of … films and so on may be charged 7% VAT,” noted the Minister of Culture and Information Policy of Ukraine Oleksandr Tkachenko at the presentation of the law.
He added that the bill provides for 7% VAT for operations related to temporary accommodation services provided by hotels, in view of the extremely high losses that this sector suffered due to quarantine measures.
“This law had been the subject of lengthy debates in the relevant ministries and I ask you now to lend a hand to the field of culture and creative industries,” Tkachenko summed up.
Kernel-Trade in August 2020 regained leadership in the list of the largest recipients of budgetary value added tax (VAT) refunds with UAH 1.26 billion, while in April, May and June the company topped the list, and in July it was not included in the list.
According to the State Treasury, Zaporizhstal affiliated with Metinvest Group followed Kernel-Trade with UAH 428 million in August compared to UAH 482 million in July, and Mariupol-based Illich Iron and Steel Works with UAH 385 million (UAH 515 million in July).
The top five companies from the list include also ArcelorMittal Kryvyi Rih, which in August received UAH 355 million of VAT refunds (in July it topped the list with UAH 573.7 million) and Dniprovsky Steel Plant with UAH 296 million (UAH 312 million).
The second five largest recipients of budgetary VAT refunds include Glencore Agriculture Ukraine with UAH 253 million (UAH 150 million) and Azovstal with UAH 189 million (UAH 482.8 million).
The top ten recipients also included Nibulon with UAH 182 million, Vilna Ukraina with UAH 180 million (there were no data on reimbursement from both companies in July), as well as Interpipe Nyzhniodniprovsky Pipe Rolling Plant with UAH 161 million (UAH 57 million).
In general, budgetary VAT refunds in August 2020 fell to UAH 8.57 billion compared to UAH 9.13 billion in July this year.
The Ministry of Infrastructure of Ukraine will insist on the adoption by the Verkhovna Rada of the law on the abolition of value added tax (VAT) on internal flights, Infrastructure Minister Vladyslav Krykliy has said.
“Aviation is gradually returning to the sky. Internal regular passenger flights started on June 5, and international flights will resume on June 15. There are still challenges for the industry. Therefore, we will insist on the fact, that the Verkhovna Rada support the abolition of value added tax for internal flights,” he wrote on his Telegram channel on Thursday, June 11.
Earlier, SkyUp Airlines (Kyiv) announced the urgent need to abolish VAT on domestic flights in order to maintain affordable prices for tickets within geographic expansion.
Zaporizhstal metallurgical plant, affiliated with Metinvest Group, topped the list of the largest recipients of VAT refunds in March 2020 with UAH 859 million, which is more than twice as much as in February (UAH 404 million).
According to the State Treasury Service, Zaporizhstal is followed by ArcelorMittal Kryvyi Rih mining and metallurgical plant, which increased its tax refund indicator from UAH 579 million in February to almost UAH 611 million in March.
At the same time, Kernel-Trade agro-exporter, the leader among VAT refunds recipients in February, worsened its result by almost 2.3 times and ranked third with UAH 473.5 million (UAH 1.075 billion in February).
The five largest recipients of VAT refunds also included Glencore Agriculture Ukraine enterprises with UAH 450.7 million (there were no data on reimbursement last month) and ADM Ukraine with UAH 405.7 million (UAH 428 million in February).
The companies are followed by AT Cargill with UAH 334.7 million (data were not available in February). Mariupol-based Illich Steel Mill, affiliated with Metinvest Group, almost halved its result to UAH 313.4 million, while in February it received UAH 604 million.
Businesses are signaling problems with the timely budget reimbursement of value added tax (VAT), Andy Hunder, the President of the American Chamber of Commerce (AmChem), has stated.
“We began to receive signals from the companies about delays in VAT refunds,” Hunder said, addressing Prime Minister Oleksiy Honcharuk.
He also emphasized the importance of transparent VAT refunds, as well as protecting the rights of investors in Ukraine.