Tax Code update: what's next?
Author: Alexey Khomyakov


Corporate Profit Tax

Tax losses. The Draft Law introduces gradual utilization of tax losses accumulated prior to 1 January 2011. The tax losses may be carried forward to 2012-2015 within the limits specified for the legal entities depending on their incomes level. The Draft Law will not eliminate existing controversies in Ukrainian Tax Code regarding tax losses and the tax disputes are yet to come.

Advance payment. Currently, insurance companies are exempt from the advance payment upon dividends' distribution. The Draft Law makes such advance payment obligatory for insurers. This requirement will definitely worsen the investment opportunities in insurance industry.


Voluntary Registration. According to the Draft Law, certain mandatory requirements upon voluntary VAT registration have been removed. Particularly, the charter capital and taxable transactions thresholds have been abolished. Generally, this initiative may be viewed as positive, since it improves regulatory framework for newly established entities.

Mineral Resources

The Draft Law canceled rental payment for oil, natural gas and gas condensate starting from the 1 January 2013. However, the Draft Law also increased royalties for the use of mineral resources (approximately by 2-2.5 times). According to preliminary calculations, it will substantially increase the cost of international businesses operating in oil and gas industry in Ukraine.

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