1. Corporate Profit Tax ("CPT")
- The general tax rate of 18% remains intact. CPT tax basis is heavily based on the general accounting rules. The new differences for the tax purposes have been put in place. This led to non-deductibility of some of the expenses related to non-production fixed and intangible assets and transactions with CPT-exempt entities;
- From now on interest payable under qualifying Eurobonds are exempt from the Ukrainian withholding tax. Starting from January 1, 2019 the 5% tax rate will apply;
- Real estate tax cannot be credited against CPT. The land is not within the scope of this tax;
- Small businesses meeting qualifying criteria (up to UAH 3 mln. (USD 107k) annual income, etc.) are exempt from CPT until the end of 2021;
- Machinery and equipment purchased in 2017 and 2018 and meeting some other criteria may be subject to reduced 2 year depreciation;
- No changes to 20% general VAT rate;
- The law has repealed the special VAT regime for agricultural businesses allowing them to keep some part of the VAT and to use it for their own purposes. Instead they will receive state subsidies;
- The VAT exemptions for the aero and space, coal, filmmaking, paper waste and metal scrap recycling industries are extended;
- VAT arising upon importation of (i) wood processing equipment or (ii) plastic and rubber processing equipment used in the medical industry may be paid in installments over the period of up to 3 years;
- The two existing in 2016 VAT refund registers are merging into one. Though there will be a separate temporary register for VAT refund claims filed before February 1, 2016;
- Starting from April 2017 the tax authorities will be empowered to temporary suspend registration of VAT invoices (giving the right for VAT credit) that match high risk criteria.
3. Personal Income Tax ("PIT") and Property taxes
- As before the PIT standard rate is 18%. Dividends payable by the Ukrainian entities that do not enjoy any CPT preferences are subject to a reduced 5% PIT;
- For the business trips the PIT exempt per diem amounts are as follows: for the domestic trips – UAH 320 (USD 12) and for the foreign trips – EUR 80;
- The tuition fees payable to Ukrainian educational institutions are fully deductible for PIT purposes;
- The law repeals the mandatory pension fund fee payable upon purchase of foreign currency by an individual;
- The authorities plan to publish a list of vehicles that will be subject to the transportation tax each year by February 1st.
4. Transfer pricing
- The value thresholds making the transaction controllable have been increased to UAH 150 (USD 5.4) million for the annual income requirement and to UAH 10 million (USD 350k) for the transactions with one party;
- The law has extended the list of types of controlled transactions and the criteria for grouping of separate controlled transactions;
- The deadline for filing of the TP report has been extended to October 1st;
- The law provides for a more extensive list of information to be included in the transfer pricing documentation (e.g., information on taxpayer's subsidiaries and description of management structures, copies of agreements, etc.).
5. Administration of taxes
- The multifunctional taxpayer's e-cabinet is planned to provide taxpayers with a more comprehensive set of data and electronic services (management of tax overpayments, ordering tax reconciliation reports, e-notification about tax audits, access to electronic VAT system, etc.);
- Starting from April 1, 2017 all tax rulings are to be published on the website of the tax authority;
- The tax authorities will have to publish once a year a schedule of planned tax audits for the next year by December 25th.