On 21 July 2021, the Law of Ukraine on Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Encouraging the De-shadowing of Income and Improving Tax Culture of Citizens by Introducing a One-time (Special) Voluntary Declaration of Assets Belonging to Individuals and Payment of One-time Duty dated 15 June 2021 № 1539-IX (the Law) entered into force.
An amnesty for competition law violations is an integral part of the wider capital (tax) amnesty (which is also often referred to as a zero tax declaration) and had to be implemented by the government as one of preconditions for Ukraine to join the automatic exchange of information under common reporting standard rules.
Although the lawmakers present this disclosure as voluntary, in fact those who did not file the special returns according to the Law are deemed as if they had notified the state that they have nothing to report. That said, individuals who possess assets above the thresholds specified in the Law (e.g., assets of UAH 400,000 value, apartments of 120 sq. m, houses of 240 sq. m) and cannot prove that they had sufficient sources for acquiring these should carefully consider the amnesty procedure.
We expect that the government will further consider implementation of indirect taxation methods for individuals, and the Law clearly indicates the period within which the Cabinet has to come up with the proposal to increase control over personal income tax.
In addition to the capital (tax) amnesty, there is a possible amnesty for certain types of concentration which required the Antimonopoly Committee’s (the AMCU) clearance but have been closed without clearance.
Namely, in case of concentration in violation of the Law of Ukraine on Protection of Economic Competition, a reduced fixed fine of UAH 20,400 (approx. Euro 640) is to be imposed provided that:
As a reminder, a failure to clear a notifiable concentration entails a fine of up to 5 per cent. of the income (revenue) of the business undertaking for the financial year preceding the year in which the fine is imposed.
As a further reminder, as of 11 July 2021, due to adoption of specific regulations, legal entities registered in Ukraine are obliged to disclose their entire ownership structure. Disclosure of both the ultimate beneficial owner information and information on the entire chain of ownership is now required, on which you may read more here: https://bit.ly/3xNxNR7. Thus, cautious structuring and disclosure of the corporate group is now of prime interest to Ukrainian owners and their corporate advisers.
To read this article in the Ukrainian language, please follow the link: https://bit.ly/3y21y0y.