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Tag: #Taxation

Offshore Transactions No Longer Subject to Additional Bank Checks

Published: Ролан Бондарец | 01.02.2018 | news

The NBU has forbidden financial institutions to apply the requirements of the Regulation on the procedure of analysis by the banks and verification of documents (information) on financial transactions and their participants (Resolution No.369) to the transactions, one of the parties of which are persons registered in the offshore zones. On January 24, the financial institutions received the corresponding Clarification No.25-0008/4731, signed by the director of the financial monitoring of the National Bank of Ukraine, Igor Beryoza. The document was sent out in the form of an electronic message. The letter states that from January 1, 2018 banks should not define such operations as risky ones, which means they are not required to conduct additional checks and request the documents from the clients. This change is justified by the fact that the order of the Cabinet of Ministers, effective from September 16, 2015, with which the list of offshore countries and territories was enshrined, lapsed at the beginning of this year. At the same time, the updated list, determined by a separate order, was not included in the relevant resolution of the National Bank. In other words, the list of...

Another 6 Countries Have Joined the BEPS Multilateral Convention

Published: Dmitriy Batrakov | 31.01.2018 | news

On January 24, 2018, another six states signed the Multilateral Convention for the Implementation of Activities under the BEPS Plan (MLI Convention). In this regard, the countries were able to amend promptly their agreements on avoidance of double taxation, taking into account the recommendations developed by the OECD in the framework of the plan of action to counteract the base erosion and withdrawal of profits from taxation. Barbados, Côte d'Ivoire, Jamaica, Malaysia, Panama and Tunisia joined the MLI Convention, after which the total number of signers reached 78. It is also worth noting that Algeria, Kazakhstan, Oman and Swaziland have announced their intention to sign the Convention in the near future. In addition, other jurisdictions are actively working on signing the agreement in June this year, as the press service of the OECD reports. To date, four jurisdictions - Austria, the Isle of Man, Jersey and Poland - have ratified the Convention, which will enter into force three months after the fifth part of jurisdictions transfers the instruments of ratification to storage. The Convention, developed as part of large-scale negotiations involving more than 100 countries and...

south-korea-announced-about-introduction-of-24-tax-for-cryptocurrency-exchanges

Published: Olena Vydysh | 25.01.2018 | news

According to the IA Yonhap, South Korean authorities announced about the introduction of income tax for local cryptocurrency exchanges in the total amount of 24.2%. This rate consists of 22% of corporate and 2.2% of local income tax. This is how the income of all South Korean companies is taxed, if it exceeds 20 billion won, which equals $18.7 million. Now this requirement extends to cryptocurrency exchanges. According to an official from the Ministry of Strategy and Finance of South Korea, the exchanges will be obliged to pay taxes by March-April. So, one of the largest exchanges of the country Bithumb, which last year’s revenues might exceed 317 billion won ($297 million), will have to pay a tax of about 60 billion won ($56.3 million). According to Coinmarketcap, the daily trading volume on this exchange is about $3.2 billion. The decision to impose a tax on stock exchanges was made a few days after it became known that the income of South Korean banks with commissions for cryptocurrency trading had increased in 36 times - up to 2.2 billion won ($2 million). We remind that in December 2017, it has become known that the government of South Korea plans to take measures to limit...

EU Mitigates the Rules of Taxation for Small Business

Published: Dmitriy Batrakov | 24.01.2018 | news

The European Union announced its intention to expand the powers of Member States with respect to changing the rates of VAT and mitigating the rules of taxation for small businesses. These changes are only part of a large-scale plan on revision of the European VAT system aimed at creating a single VAT zone. We remind that the general rules of VAT in the European Union were agreed in 1992. According to the European Commission, they became obsolete and, in addition, too limited. The EU Commissioner for Taxation, Pierre Moscovici, noted: “Today we are taking another step towards the creation of a single VAT zone in the European Union with simplified rules for our Member States and, in particular, companies. These proposals will give EU countries greater freedom with regard to application of preferential VAT rates to specific products or services. At the same time, they will enable to reduce the number of bureaucratic mechanisms for small enterprises engaged in cross-border activities, thereby contributing to their growth and job creation”. The Commission proposed to give EU Member States the opportunity to introduce certain benefits, along with a standard VAT rate of at least...

Singapore Has Launched Automatic Exchange of Tax Information with 61 Jurisdictions

Published: Dmitriy Batrakov | 16.01.2018 | news

The government of Singapore stated that the process of automatic exchange of tax information with 61 states has been launched within the framework of the program to avoid tax evasion and financial crimes in the territory of the country. Data exchange will take place in accordance with the CRS - Common Reporting Standard of the OECD for the exchange of tax information. This standard assumes that an automatic exchange of information occurs between the territories that have agreed on the exchange of data in the automatic mode. The use of appropriate mechanisms and systems for collecting information on financial accounts is regulated by the Common Reporting Standard of the OECD for the exchange of tax information (CRS Regulations), which came into effect at the beginning of this year. The process of exchange of information with most states started on January 1. The government has approved the exchange of tax and financial information with the following jurisdictions: Australia Argentina Barbados Belgium Bermuda Bulgaria Brazil United Kingdom Germany Guernsey Greece Denmark Jersey India Indonesia Ireland Iceland Spain Italy Cayman...

A Number of Agreements on Automatic Exchange of Tax Information Entered into Force in Switzerland

Published: Dmitriy Batrakov | 12.01.2018 | news

A number of agreements on Automatic Exchange of Information (AEOI) on taxation issues, concluded by Switzerland with other jurisdictions, entered into force on January 1, 2018. Data exchange will be carried out in accordance with the Common Reporting Standard of the OECD, which provides for the possibility of automatic exchange of information between the territories that have agreed to such an exchange. Switzerland starts to exchange tax information this year with respect to data on accounts collected for some partners under previously signed agreements, namely Australia, Canada, the European Union, Guernsey and Jersey, the Isle of Man, Iceland, Japan, Norway and South Korea . More complete list of jurisdictions with which Switzerland plans to establish automatic exchange of information since 2019 was published on the website of the State Secretariat for International Finance. In order to fulfill its obligation to exchange information automatically with these territories, Swiss financial institutions will be demanded to comply with the new requirements on information collection from January 1, 2018 for the accounts of taxpayers from such countries as Andorra, Argentina, Barbados,...

The Cabinet of Ministers Has Approved a List of States (Territories) Where the Operations with Residents are Recognized as Controlled for the Purposes of TP

Published: Ролан Бондарец | 28.12.2017 | news

On December 27, 2017, the Cabinet of Ministers of Ukraine approved a new list of states (territories) where the operations with residents are recognized as controlled for the purposes of transfer pricing. It was due to the recent changes in the selection criteria. The new list was formed according to the following criteria: state (territories) where the corporate income tax rate is 5 and more percentage points lower than in Ukraine (that is, below 13%); states with which Ukraine has not concluded international agreements containing provisions on the exchange of information; states which competent authorities do not provide timely and complete exchange of tax and financial information for the requests of the SFS. When considering the criterion of the rate of corporate income tax, not only basic but also preferential rates for individual industries, territories, and types of activities were taken into account. Operations with a counterparty registered in the state (in the territory) entered in the approved list are recognized as controlled ones for the purposes of transfer pricing from the 1st of January of the reporting year, following the calendar year in which the states...

On December 15, Amendments to the Procedure for Issuing Individual Licenses of the NBU for Transfer of Foreign Currency Abroad Came into Effect

Published: Ролан Бондарец | 15.12.2017 | news

According to the report of press service of the National Bank of Ukraine, today, on December 15, the amendments to the procedure for issuing individual licenses for the transfer of foreign currency abroad came into effect. The innovations provided by the Resolution of the Board of the NBU No.130 of December 14, 2017 “On Amendments to the Regulations on the Procedure for issuing individual licenses for the transfer of foreign currency outside Ukraine for the payment of bank metals for certain currency transactions”...

Automatic Blocking System of TI Will Be Temporarily Suspended

Published: Ролан Бондарец | 13.12.2017 | news

The changes provided by the amendments to the draft Law “On Amendments to the Tax Code of Ukraine regarding the Balance of Budget Revenues in 2018” has been made in the procedure of the blocking system of tax invoices. According to the announcement made on December 7, 2017, the following has been done: 1. Clause 74.2 of the TCU has been deleted, which stipulates that the URTI ensures constant automated monitoring of the compliance of TI/AC with the criteria for assessing the degree of risk sufficient to suspend the registration. This provision will come into force on the day following the day of the publication of the Law. It is also noted that, within two months from the date of entry into force of the Law, the Cabinet of Ministers must: determine the procedure for suspension of the registration of TI/AC in the URTI in accordance with clause 201.16 of the TCU; ensure the revision and bringing of the normative legal acts in compliance with this Law by the ministries and other central executive bodies. In addition, the Cabinet is obliged, within a period of three months from the date of entry into force of this Law: to adopt the normative legal acts which are necessary...

What has changed in administrative appeal of tax notification-decisions

Published: Ролан Бондарец | 15.09.2017 | blog

By the Law of Ukraine No. 1797-VIII of 21.12.2016, the functions of the tax inspections were significantly reduced, in particular, they are deprived of the right to conduct tax audits and take tax notification-decisions that resulted the changes in the procedure for appealing tax notification-decisions. Thus, by the Order of the Ministry of Finance of Ukraine No. 916 of 21.10.2015, registered in the Ministry of Justice of Ukraine on December 23, 2015 under No. 1617/28062, a new "Procedure for processing and filing complaints by the taxpayers and reviewing them by the regulatory authorities" was approved. The experts of the Finance Business Service were considering what significant changes have occurred in the procedure for appealing tax notification-decisions. Based on the provisions of par. 56.3. and 56.6. art. 56 of the Tax Code of Ukraine, administrative appeal against decisions and actions of the controlling bodies is two-level. Previously, this situation involved appealing tax notification-decisions. That is, the complaint against the tax notification-decision of the State Tax Inspectorate, was first submitted to the SFS of Kyiv or to the regional bodies of the SFS, and...