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Starting from 1 January 2013, new provisions of the Tax Code are to come into force. According to Article 39 “Methods for determining and procedure for applying …
News that are most important in the newly begun 2013 year
Ordinary prices
Starting from 1 January 2013, new provisions of the Tax Code are to come into force. According to Article 39 “Methods for determining and procedure for applying the ordinary price” tax authorities from that date gain the right to control the transaction price, which implies the possibility of its adjustment. Such a price is used in transactions with related parties, simplified taxpayers, barter transactions and other tax beneficiaries. When establishing the ordinary price, tax officers will, by comparing resale prices, similar goods, summing up markup and cost price, analyzing profit distribution, etc. perform the assessment. In the event that there are no comparables for comparison, an appraisal of value may be conducted by an appraisal entity.
If the transaction price differs from the ordinary price by more than 20%, tax authorities have the right to adjust the tax. In early January the State Tax Service reported the establishment of a special Commodity Market Monitoring Center, whose purpose will be to detect such violations. The center’s staff will analyze commodity transactions both on the domestic market and in imports/exports through third parties.
Real estate tax
Article 265 of the Tax Code of Ukraine comes into force, which provides for the taxation of immovable property other than land plots. Both legal entities and individuals fall under the tax. Apartments with an area up to 120 sq.m. and residential houses with an area up to 250 sq.m. owned by individuals who are registered at that address are not subject to the tax. If the area is larger than these limits but not more than twice the limit, the tax rate will be 1% of the minimum wage per 1 sq.m., which amounts to 11.76 . If the area exceeds the specified limit by more than 2 times, the rate will be 2.7% per square meter or 31.75 .
Advance profit tax
Amendments to the Tax Code (Law of 05.07.2012 No. 5083-VI), according to which enterprises with revenue over 10 million are obliged to pay a monthly advance payment of profit tax in the amount of 1/12 of the corresponding figure for the previous year, come into force from the beginning of 2013. This obligation allows submitting the tax return not every quarter but at the end of the year. It is important to note that this provision will affect many taxpayers, as the 10 million threshold is quite low. It is not yet known how this overpayment will be accounted for.
List-based tax benefits
The Law of 06.09.2012 No. 5211-VI provides for a 5-year exemption from profit tax for enterprises that implement investment projects in priority sectors of the economy. The list of such sectors will be established according to another law of 06.09.2012 No. 5205-VI. The program will also cover project investors – for small businesses the project cost according to the estimate must be from 500 thousand euros and with at least 25 jobs, for medium businesses 1 million euros and 50 jobs, and for large businesses 3 million and 150 jobs. Employee salaries at such enterprises must be at least 2.5 times the minimum wage.
Enterprises in the IT sector also receive benefits. They are exempt from VAT for a period of 10 years, and the profit tax will be only 5%. Such conditions are possible if certain criteria are met: the share of income from core activities must be at least 70% of the total, and the value of fixed assets must amount to 50 minimum wages or 58.8 thousand .
Employment for the population
The new edition of the Law “On Employment of the Population” (of 05.07.2012 No. 5067-VI), which came into force at the beginning of January, provides incentives for employers to create new jobs and employ citizens with low social protection. The law provides fairly favorable provisions for entrepreneurs, for example, when creating new jobs and paying wages to new employees in the amount of at least 3 minimum wages for a year, in the following year the employer will receive a 50% discount on the payment of the single social contribution. But the benefit is lost in the event of dismissal or reduction of wages. Also, according to the new rules, enterprises with a staff of more than 20 people are obliged to employ, in addition to people with disabilities (4%), also socially vulnerable persons (5% of the staff).
The law also prohibits restricting vacancies by gender and age of applicants, as well as requiring information about their personal life. Some rules for the activities of recruitment agencies have also been regulated, such as the ban on charging applicants money. Services must be paid by the employer.
Life without BTI
Also from 1 January a new edition of the Law “On State Registration of Proprietary Rights to Immovable Property and Their Restrictions” No. 1878 of 11.02.2010 comes into force. Now the BTI is obliged to carry out inventory only when an object is commissioned and no longer to register property rights to real estate. This function is transferred to the State Registration under the Ministry of Justice (UkrStateRegister). The function of registering ownership rights to land plots also passes to the latter. The procedure for this process is approved by CMU Resolution No. 703 dated 22.06.2011. These provisions will significantly simplify the process of buying and selling real estate.
The term for registration or refusal is set within 14 days. Notaries will also be able to perform the functions of state registrars. It is important to note that it will now be quite difficult to check the history of the acquired property, since previously this could be done at the BTI, and now this data can be obtained from the register, which is still empty.