№4(15)(2013)

1. LEGISLATION

1.1 Minfin approved the Guidelines to fill in the forms of Financial Statements

Order from 28.03.2013, № 433

These Guidelines are a compilation of extracts from canceled R(S)A 2-5 with changes that take into account specificity of detail of articles of new forms of financial statements

New forms of financial reports, approved by Order of the Ministry of Finance from 07.02.2013, № 73, beginning to be applied to the balance sheet for I quarter of 2013.

In connection with transition of a number of enterprises in preparation of financial statements in accordance with IFRS legal conflict was revealed regarding composition of quarterly financial statements.

According to the law on accounting, interim (quarterly) financial statements include only the balance sheet and income statement, and norms of international accounting standards, though not forced to file quarterly reports, but in the case of provision require a full set of reports.

Legally, priority belongs to the law on accounting, as it allows using international standards to the extent not contrary to its own provisions.

Thus, while strictly fulfilling requirements of the Act, there is a risk of non-compliance with IFRS reporting and in accordance with international standards - the law on accounting is violated.

1.2 Approved the order of defining a mechanism for valuation of real and personal property

Resolution of the Cabinet of Ministers of Ukraine from 04.03.2013, № 231 approved procedure for determining valuation mechanism of real and personal property for tax purposes and payment of other compulsory payments levied on income of taxpayer – individual from sale (exchange) of movable and immovable property (unless inheritance and gifts), and calculating amount of state fee, taxes and charges.

The effect of this Order applies to the following objects of assessment:

- Real estate - land improvements (facilities and a multi-storey low-rise building, including suburban and country type, non-residential premises and construction in progress), land;

- Movable property (other than passenger cars, motorcycles, mopeds, to determine if income from sale (exchange) on choice of payer, their average market value is used, and except pursuant to an exemption from alienation of such objects of taxation);

- Property rights over immovable and movable property.

Also this resolution revokes provisional procedure for determining assessed value of real estate and construction in progress, which is sold (exchanged).

Strictly by the new Order the property will be assessed from 1 August 2013.

1.3 Cabinet of Ministers refining activities in technology transfer

In Order from 15.04.2013, №271 the Cabinet added features to department responsible for issues of technology transfer, innovation and intellectual property of ministries and other central executive body, the National Academy of Sciences and the National Academy of Sciences of industry.

In particular, it was found that structural unit should provide:

- Formation of databases on technology, property rights, namely intellectual property rights held by companies, academic institutions, organizations and universities that belong to management of relevant central executive body or are responsibility of the NAS or the National Academy of Sciences of industry;

- Participation in drafting of agreements on transfer of technology;

- Providing StateInformScience with information on completed technology, including those created or acquired by budget, technologies developed or acquired by state-owned enterprises, as well as technologies proposed for registration as transfer of technology (owners of technology) for inclusion in register of technologies;

- Information on transferred technology, created by budget, academic institutions, organizations and universities that belong to management of relevant central executive body or are responsibility of the NAS or the National Academy of Sciences of industry;

- Applications for need to maintain patenting of technologies outside Ukraine;

- Reports on patent and opportunistic, research, design, engineering, testing activities related to the development and use of technologies, patenting and licensing rights on them, on payment of compensation by the poster.

Decision will enter into force from the date of publication.

2. CLARIFICATIONS

2.1 How tax invoices should be properly registered in electronic form?

The State Tax Service in the Letter from 28.03.2013, № 7454/7/15-33-17-04 provided clarification of some issues on registration tax invoices in electronic form.

On the need for registration of all tax invoices in electronic form in the Unified Register of tax bills, regardless of amount the following information is provided.

Tax invoice in which the VAT amount does not exceed 10 thousand UAH should not to be included in SRTI. Thus, the tax invoice, issued in implementation of supply of goods and excisable goods imported into customs territory of Ukraine, from January 1, 2012 shall be included in the Unified Register of tax invoices, regardless of the size of VAT in a tax invoice. In addition, in accordance with paragraph 4 of the Order of maintaining SRTI, tax invoices, which are not issued to buyer and stay at the seller, in accordance with the STS, are not subject to registration.

Concerning possibility of imposing an electronic signature/seal during 15 calendar days following the date of their issue on tax invoices in electronic form, regardless of amounts that are transferred to buyer, there is the following.

 So, after drawing up the tax invoice and/or adjustment calculation in electronic form on which is superimposed digital signature of officials of the taxpayer in the following order: first - electronic digital signature of the chief accountant (accountant) or electronic digital signature of the head, second-electronic digital signature, which is analogue to seal of seller.

In the absence of accountant position at the seller, digital signatures of officials of the taxpayer are imposed in the following order: first - electronic digital signature of the head, second - digital signature - an analogue of seal of seller.

Seller, being an individual - owner, puts a digital signature in the following order: first - digital signature of individual-entrepreneur, second - digital signature which is analogous to seal of seller.

On validity of tax invoice, when a digital signature, which is applied at check-in the tax invoice in the Unified Register of tax bills, and signature that binds the tax invoice to the buyer at issue, belongs to different persons.

To delegate authority to sign the tax invoice and/or adjustment calculation to another official, the seller receives means of electronic digital signature accredited by Certification Authority for the person, and provides tax authority at the place of registration with certificates with electronic signature of specified person. In this case, digital signatures of officials the seller imposes in this order: first - electronic digital signature of the person to whom authority delegated to issue tax invoice and/or adjustment calculation, second - digital signature which is analogous to seal of seller.

Thus, digital signature, which is superimposed on tax invoice prior to registration in the Unified Register of tax bills, and signature, countersigned this tax invoice for its extradition to the buyer, must belong to the person who has been delegated by authority to sign tax invoices.

2.2. STSU explained the order of electronic signature of tax invoices

State Tax Service of Ukraine in the Letter from 04.04.2013 noted that after preparation of a tax invoice or adjustment calculation in electronic form, imposing on it digital signatures in the following order:

1) signature of the chief accountant (accountant) or the head;

2) analogue of seal of seller.

In the absence of accountant at the seller the first superimposed is a signature of the head.

Individual-entrepreneur puts a digital signature in the following order:

1) signature of individual-entrepreneur;

2) analogue of seal of seller.

In the case of delegation of authority to sign a tax invoice or adjustment calculation to another official, the first superimposed signature of the person to whom authority is delegated with signature. At the same time, signature superimposed on tax invoice prior to registration in URTI, and signature, which holds that tax invoice at issue to the buyer must belong to one person.

2.3. How overpaid financial obligations are credited for payment of monthly advance payments?

State Tax Service of Ukraine in the Letter from 01.04.2013, № 4420/6/15-14-15-13 indicated that, under transitional provisions of the Tax Code, tax payers, who since 2013 served an annual tax declaration in accordance with Clause 57.1 of Art. 57 of TCU paid in January and February of 2013 an advance payment in the amount of 1/9 income tax charge for the first nine months of 2012, within 20 calendar days following the last calendar day of reporting (tax) month.

According to Section 87.1 of Art. 87 of TCU, source of payment of monetary obligations or repayment of tax debt of taxpayer are any own funds, including proceeds from sale of goods (works, services), property, issuance of securities. In particular, corporate rights obtained as a loan (credit), and from other sources, with specifications defined by this article, as well as the amount of excess payments to relevant budgets.

Payment or repayment of liabilities of tax debt of taxpayer for relevant payments can also be made at the expense of overpaid for such payment (without application by payer) or by mistake, and/or overpaid for other payments (based on application by payer) to corresponding budgets.

Based on the above, the STS explained that enrollment of overpaid financial obligations of payer of income tax in payment of monthly advance payments may be made on the basis of declaration filed by payer of such enrollment.

2.4. NBU clarified some aspects of procedure for payment of money transfers from abroad to individuals

The National Bank of Ukraine in a letter from 11.04.2013, № 29-209/4174/4330 pointed out that, under Articles 34 and 37 of the Vienna Convention on Diplomatic Relations and article 49 of the Vienna Convention on Consular Relations, members of diplomatic missions and consular posts and members of their families shall be exempt from all dues and taxes, including on income received in service.

Action of these items apply for diplomatic agents and members of administrative and technical staff members of service staff of diplomatic missions, private servants employees of diplomatic mission, consular officers of consular offices, members of service staff of consular post and members of families of employees of diplomatic missions and consular post if the latter are not nationals or resident in time.

Belonging to persons under privileges and immunities under laws and international treaties, is to be certified with documents, which are issued by the Foreign Ministry in order determined by the Regulations on accreditation of members of diplomatic and consular institutions of foreign states, international organizations and their representatives, other international organizations.

National Bank has clarified that requirements of the Ordinance from 16.11.2012, № 476 "On Procedure for payment of money transfers from abroad to individuals” on mandatory sale on interbank currency market of Ukraine the transfers from outside of Ukraine in foreign currency in favor of individuals in relation to members of diplomatic missions and consular institutions of foreign states in Ukraine and representative offices of international organizations in Ukraine, if latter are not citizens of Ukraine or do not reside there permanently and accredited in the Ministry of Foreign Affairs, does not apply.

3. LAW PROJECTS

3.1. The Cabinet of Ministers suggests to prohibit updating period certified by tax authorities

CMU has drafted a bill from 08.04.2013, № 2752 on limitation of control measures, provision specifying payments and increasing responsibility of officials supervising bodies.

Project offers the following new features:

- For making illegal decisions that affect rights and obligations of taxpayers, including those which are defined tax or monetary liabilities, officials regulatory authorities are responsible under the law;

- taxpayer has no right to make clarification to calculation provided for in the tax returns for any reporting period for which regulatory authority carried out a scheduled documentary inspection;

- unscheduled documentary audit of taxpayer is prohibited for periods for which a planned documentary check was  carried out, unless officials of the Tax Service, who conducted such checks, are subject to disciplinary, administrative or criminal liability for corruption offenses or offenses in area of performance-related with taxpayer;

- Restrictions on conduct of unscheduled inspections of taxpayers are not subject to checks that:

a) are held pursuant to Regulation (determination) of a court or in order to verify the grounds proving violation of calculating VAT refund;

b) related to adoption of measures to counter results of verifications carried out in connection with scheduled documentary inspection.

3.2. Guaranties of employment of young people will increase

A draft law from 04.04.2013, № 2725 is developed on students with internship and subsequent employment of young specialists providing first job, which introduces changes to certain articles of the Labor Code, the Law "On Employment", Law "On promoting social development of young people".

Project, in particular, suggests to:

- Oblige the State employment service to provide information on vacancies falling under definition of the first job, to heads of higher and professional education institutions;

- To introduce a control mechanism in the event of failure of employer to hire young people within established standard, as well as in preparation of statement of desire of passage undergraduate workshop or field study of person to whom employer has offered the first job;

- Oblige employer to inform the principal of institution or its structural unit on sending the person that completes training, on practice at the place of future employment.

3.3 Payers of income tax are to be consolidated

In addition to the draft law on transfer pricing, a bill from 05.04.2013, № number 2737 was developed on introduction of consolidated group of taxpayers.

The said institution provides for members of consolidated group to consider possibility of tax losses of other participants. According to authors of the project, it would eliminate possibility of abuse of members of consolidated group to bargain prices in order to minimize tax liabilities.

It is assumed that consolidated group of taxpayers can form parties, which together must meet both of the following criteria (for calendar year preceding the year of filling to the tax authority documents for registration of agreement on establishment of a consolidated group of taxpayers)

- Aggregate amount of income tax paid is not less than 100 million UAH;

- Total volume of resulting economic gain is at least 1 billion UAH.

3.4. Environmental tax rates for domestic waste are proposed to increase

A draft law from 01.04.2013 № 2672, which proposed to increase the rate of environmental tax for disposal of solid waste and to establish that tax for disposal of solid waste is withheld and paid to the budget by tax agents.

Tax agents are business entities engaged in carriage of solid waste in a designated disposal site or facility.

The basis of division the sizes of tax rates by proposed project is a scheme to clean communities, developed on the basis of scientific expert of project.

4. DIFFERENT

4.1 Special duties on imports of cars to Ukraine are in action

On April 13, 2013 came into effect the decision of Interdepartmental Commission on the International Trade of the Ministry of Economic Development and Trade of Ukraine, according to which a three-year special duty on import of new cars was introduced.

Special arrangements apply regardless of country of origin and exports by implementing a special duty on imports into Ukraine cars with internal combustion engine with spark ignition (gasoline) depending on engine displacement:

- More than 1000 cubic cm. but not more than 1500 cc. cm - at the rate of 6.46% (UKT VED code 8703 22 October 00);

- More than 1500 cubic cm. but not more than 2200 cc. cm - at the rate of 12.95% (UKT VED code 8703 23 19 10).

Note that for expensive cars with large engine displacement the rate will not change.

4.2. Entrepreneurs will be fined for refusing to accept payment by credit card

The National Bank of Ukraine has obliged entrepreneurs accepting payments for goods and services using electronic means of payment

For limitation of right of consumers to pay by credit card the seller can be fined with 8500 UAH (500 times untaxed minimum). Ministry of Finance has learned that from report of the State Service of Ukraine for Regulatory Policy and Entrepreneurship Development.

Responsibility of seller for refusal to accept payment with electronic means is provided in the Code of Administrative Violations. Press service of Entrepreneurship reported that Tax Service of Ukraine will take consideration of such offenses.

Monitoring of compliance with requirements of the NBU by entrepreneurs regarding electronic payments will implement STSU. Ensuring protection of rights of holders of electronic means of payment for the above calculations will perform Stateconsuminspection - specially authorized central body of executive power in the field of consumer protection.

Let’s recall, the NBU may limit cash payments of more than 150 thousand UAH in May. A discussion of this decision in the National Bank is completed, it remains to test, after which restrictions may be implemented.

4.3. Comply with the new traffic code!

A number of innovations are in act in the traffic code from April 15, 2013, namely:

1. Road signs have priority over road markings and can be of permanent, temporary and variable message. Rules specified benefits relating to the traffic controller signals - from now on its signals have priority over traffic signals and requirements of all road signs (before - road signs had priority).

2. Road markings now contain several colors: blue markings (parking space on driveway) and orange (temporary markings) were added to white and yellow markings.  Road marking is applied in accordance with the Rules and must comply with national standard. The national standard DSTU 2587:2010 "Road Safety. Partitioning road. Specifications. Methods of control. Terms of use" by Stateconsumstandard Order from 27.12.2010 was in terms of development instead of DSTU 2587-94.

As for the signs, they are applied in accordance with the Rules and shall meet requirements of national standard - DSTU 4100-2002 "Traffic signs. General specifications. Terms of use".

3. A green arrow on the plate installed at a red traffic light, allows movement in that direction when the red light under condition of benefits of moving for other participants, moving from other areas on traffic signal, traffic permitting.

4. From October 1 to May 1 on all mechanical vehicles outside communities should be the daytime lights running, and in the case of their absence in structure of vehicle - dipped beam.

Attention! The new rules come into effect from 15 April 2013. However, so far there is no official explanation on use of daytime running lights for the period from 15 April to 1 May 2013.

Rear anti misty light may be used only under conditions of poor visibility, both in daylight and in the dark.

The term "dark" refers to part of the day from sunset to sunrise.

5. There are special conditions concerning movement of vehicles with sign "Children". Thus, approaching the vehicle with identification mark "Children", which stopped with flashing light orange color and (or) hazard warning lights on, drivers of vehicles moving along the adjacent band, should reduce speed, and if necessary, stop to avoid hitting a child.

6. Section 14.1 of the Rules is excluded, which stated that overtaking non-rail vehicles is permitted only on the left.

7. Vehicle parking is now prohibited also on lawns (Section 15.10 of the Regulations). The term "lawn" means territory of a homogeneous area with turf, which is artificially created by planting and growing sod-producing grasses (mainly perennial grasses).

8. Using the sign of priority 2.2 "Non-stop travel is forbidden» was updated. Previously, there were only a rule of "Do not travel without a stop in front of sign 1.12 (stop line), and if it does not exist - in front of sign," have now been added with: "We need to give way to vehicles moving on the road traversed, and in presence of table 7.8 "Direction of the main road" - a vehicle traveling along the main road, and on right on the equivalent road".

9. Sign 3.1 "Movement is prohibited" installed with signs 5.33 "Pedestrian zone" or 3.43 "Danger".

10. Information sign 5.38 "Parking Lot" is used:

- For places and sites for parking vehicles;

- Sign with the letter "P" and a symbol of the roof is used for indoor parking;

- Sign with the letter "P" and a symbol of the bus is used for covered parking with possibility of transfer in a shuttle vehicle.

11. A new informational sign 5.70 "Photo-, video-recording of violations of traffic rules". Sign informs about the possibility of exercising control over traffic violations with special technical and (or) technical means.

4.4.Verhovnaya Rada adopted the law on bribery

Parliament adopted the Law of Ukraine "On amendments to some legislative acts of Ukraine on bringing national legislation into conformity with standards of the Criminal Law Convention against Corruption"

The Verkhovna Rada of Ukraine  April 18, 2013 approved the first reading of the basis and the whole bill initiated by deputies from four parliamentary factions UDAR, VO "Svoboda", "Batkivschina" and the Party of Regions, with which suggests to attribute the undue benefits (bribes) and all activities associated with such an act, to a criminal offense.

It should be noted that adoption of the relevant law is essential for the future of Euro-integration of Ukraine.

In particular, the Parliament approved the law "On amendments to some legislative acts of Ukraine on bringing national legislation into conformity with standards of the Criminal Law Convention against Corruption". 362 deputies out of 421 registered in the session hall voted for this decision. According to the Act, it is proposed to assign all corruption offenses related to obtaining undue advantage in the number of crimes, and to replace the term "bribe" with concept of "undue advantage".

The law requires criminalization of all elements of active and passive bribery, including promise of unlawful benefits, as well as criminalization of acceptance of offer or promise of undue advantage.

According to the document, with offer of undue advantage to official for taking or not taking an action for the benefit of someone who has such a benefit, it is supposed to set punishment of a fine (250-500 non-taxable minimum incomes of citizens) to imprisonment with confiscation of three to six years.

In this case, acceptance by official an offer of undue advantage it is suggested to establish a penalty of a fine of 750 to 1 thousand non-taxable minimum incomes of citizens.

Obtaining undue advantage by official using authority granted to him or her by position shall be punished by a fine of one thousand to 1.5 thousand tax-free minimum incomes, or arrest for a term of three to six months, or imprisonment for a term of two to four years with deprivation of right to occupy certain positions, to perform certain activities for a term up to three years.

Obtaining official unlawful benefit on a large scale, or receiving such benefits by official, who holds a special position of responsibility, shall be punished by imprisonment for a term of eight to twelve years with deprivation of right to occupy certain positions or engage in certain activities for a term up to years with confiscation of property.

The deputies decided that unlawful benefit on a large scale is considered a benefit, which is 500 or more times higher than non-taxable minimum incomes of citizens.

In addition, bill proposes expanding the boundaries of application of dispositions of corruption offenses in such a way that relevant provisions dealt with cases where corrupt act committed for benefit of a third party.

In its decision the Parliament has established more stringent than the existing, sanctions for acts of corruption in public sphere, as well as eliminate the risk of abuse the institute of effective repentance by introducing additional mandatory conditions for possible exemption from liability for corruption.

It is on introduction of compulsory combination of two factors - extortion and voluntarily informing the body of pre-trial investigation, whereas today for doing so enough of any of these two conditions.

Let’s recall that President Viktor Yanukovych believes that Ukraine will sign an Association Agreement with the European Union in November. As reported, December 10, 2012 the European Council on Foreign Relations has admitted possibility of signing this document during the Eastern Partnership Summit in Vilnius (Lithuania) in November 2013.

Earlier, the Ministry of Justice reported that the largest number of corrupt officials in Ukraine was among deputies, government officials and law enforcement officers. How Korrespondent.biz found from the document, the total damage caused by administrative corruption offenses in the last year amounted to 1.2 billion UAH. Another 577 million UAH of damage the budget has suffered due to criminal corruption offenses. It is noted that 2740 cases of corruption were directed to the court on criminal cases.