New Tax Rules in Ukraine

Today the Law "On prevention of financial disaster and creation of favorable conditions for economic growth in Ukraine" came into force. The law introduces significant changes to the Ukrainian tax system that will affect both legal entities and individuals. The major provisions of the law are as follows:

Personal Income Tax

Starting from the 1st of July 2014 passive incomes of individuals (including interest, dividends, royalties, investment income) will be subject to tax at increased tax rates of 15%, 17%, 20%, and 25% depending on the amount of income.

Purchase of currency

Starting from the 1st of April 2014 transactions of individuals and legal entities on purchase of foreign currency are subject to 0.5% mandatory contribution to the state pension fund.

Tax rates

Current standard 18% rate for corporate tax and 20% rate for VAT will be set up permanently. The parliament abolished the previously planned cuts of tax rates for the future years. Such taxes as ecological tax, excise duty, land tax, charges for the use of radio frequency resource, subsurface resources and other natural resources, transport vehicle registration fees will be increased.

VAT

Temporarily supplies of cereal crops on the territory of Ukraine and their export abroad will be VAT exempt. This exemption will not apply to the first supply of these crops and their export by the producers. This rule will be effective till the 1st of October 2014.

Supplies of pharmaceuticals and medical products (according to the approved list) will trigger 7% VAT.

The non-taxable limit for the import of goods delivered by international mail is decreased from EUR 300 to EUR 150.

For further information please contact Asters'
partner Constantin Solyar and associate Pavlo Odnokoz.