On 1 January 2016 the Law of Ukraine "On amendments to the Tax Code of Ukraine and certain legislative acts of Ukraine to balance budget revenues in 2016" (the "Law") became effective. The Law introduces amendments to the corporate tax, personal income tax, unified social contribution, excise tax, real estate tax, transport tax, land tax, royalty rates for natural gas, taxation in agriculture and administering of the VAT. A brief overview of certain noteworthy aspects of the amendments are indicated below.
- The general tax rate remains unchanged at 18 % of the taxable profit
- While there are certain transitional provisions for 2016, generally monthly advance tax payments are abolished and quarterly reporting is introduced (except for new taxpayers, agricultural producers, and for taxpayers whose income does not exceed UAH 20 million for the previous year)
- The special regime for suppliers of agricultural products has been changed and partially abolished
- Assets acquired by banks via enforcement of security interests are not subject to VAT
- The tax authorities are prohibited from cancelling VAT credit on formalistic grounds, and from cancelling the VAT registration of a taxpayer in case the taxpayer is not residing at their registered address
- A public register of VAT refund claims is introduced
Personal income tax
- A new base rate of 18 % is introduced instead of the 15 % and 20 % rates
Unified social contribution
- The single rate of 22 % is introduced. This rate applies up to a cap of 25 minimum salaries, i.e. currently UAH 34,450 for 2016
- Only employers are responsible for paying unified social contributions; i.e., nothing is deducted from employee salaries as was previously the case
- The rates are increased for alcohol, tobacco and fuel depending on the specific type of product
- An electronic administration system is introduced for fuel sales
Real estate tax (local tax)
- The maximum tax rate is increased to 3 % of the minimum salary for 1 sq. m.
- An additional annual payment in the amount of UAH 25,000 is introduced for owners of property with space of over 300 sq. m (for flats) and 500 sq. m. (for houses)
An overview of the key changes regarding natural gas royalties is available here.