Changes to the Tax Code adopted! Tax rates are increased, and the «simplified system» is simplified from January 1

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Changes to the Tax Code adopted! Tax rates are increased, and the «simplified system» is simplified from January 1

The draft Law No. 10687 on amendments to the Tax Code of Ukraine (regarding changes to the rates of certain taxes and fees) has been adopted. The law has not yet been signed by the President.

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Bill No. 10687 adopts amendments to the Tax Code

The draft Law No. 10687 on amendments to the Tax Code of Ukraine (regarding changes to the rates of certain taxes and fees) has been adopted. The law has not yet been signed by the President.
On November 20 the Verkhovna Rada voted for changes to the Tax Code that affect almost all taxpayers. We will describe some of the changes in more detail. 

 

Tax rates and fees have been increased 

First of all, note that the law, among other things, increases the rates of the following taxes and fees: 

  •  excise tax;
  •  fee for the first registration of a vehicle;
  •  environmental tax;
  •  payments for subsoil use for mineral extraction;
  •  payments for subsoil use for purposes not related to mineral extraction;
  •  tax on land plots for which a normative monetary valuation has not been conducted;
  •  fee for special water use;
  •  fee for special use of forest resources, etc.

The increased rates will have to be used as of January 1    (except for the excise tax rates, which take effect later). Strengthening the tax burden within such timeframes contradicts the basic principles of Ukraine’s tax legislation. According to subparagraph 4.1.9 of the Tax Code, such changes cannot be introduced later than 6 months before the start of the new budget year. But despite this, the introduction of the changes is scheduled for January 1. 

Changes in the simplified system 
Positive innovations in the rules for applying the simplified tax system: 

  1.  For single tax payers in groups 5 and 6 there are now no restrictions on the number of employees; 
  2.  Entrepreneurs on single tax group 5 who are VAT payers (as before, VAT payers of single tax group 3) must include in income the amount of creditor indebtedness for which the statute of limitations has expired. The date of income receipt is the date of write-off of the indebtedness amounts; 
  3.  for single tax groups 5 and 6 the tax rates have been reduced:
    • 5% of income — for VAT payers (was 7%);
    •  7% of income — for non-VAT payers (was 10%);
  5.  single tax group 2 will submit only an annual declaration, and not a quarterly one as now; 
  6.  the application for the single tax can be submitted not only in person, but also by mail and electronically. 

New inspections — electronic 

A new type of tax inspections is being introduced: documentary, non-field, unscheduled
electronic inspection (hereinafter — electronic inspection). This is an inspection carried out on the basis of an application submitted by the taxpayer himself if he belongs to a group with a low degree of risk. The application is submitted 10 days before the expected start of the electronic inspection (subparagraph 75.1.2 of the Tax Code). 
For conducting an electronic inspection, the taxpayer transmits to the State Tax Service electronically the documents related to the calculation and payment of taxes and fees (in the case where accounting is performed and documents are stored in electronic form, in compliance with conditions regarding the registration of the electronic signature of accountable persons). Based on such inspection, the State Tax Service issues a certificate which is signed by the taxpayer, who, if necessary, submits his remarks to it. 
However, the actual implementation of this type of inspections is deferred; they will be conducted: 

  •  «for simplified taxpayers» — from January 1, 2014;
  •  for micro, small and medium business entities — from January 1, 2015;
  • for the rest of taxpayers — from January 1, 2016.

Tax invoice details 

The introduction of a new tax invoice detail has been postponed until July 1, 2013. This concerns the requirement to indicate in the tax invoice the number and date of the customs declaration according to which the goods were imported (subparagraph “ї” of paragraph 201.1 of the Tax Code). 

Other 

Amendments are also being made to the Law “On State Regulation of the Production and Circulation of Ethyl, Cognac and Fruit Spirits, Alcoholic Beverages and Tobacco Products.” In particular, liability for working with counterfeit products has been strengthened.

If the President signs the Law without making amendments, then these innovations will have to be applied in 2013.