Until recently, offshore companies have been actively used by the Ukrainian entrepreneurs in international trade to reduce the tax burden and keep business confidentiality. We will consider in this blog whether the situation has changed in the conditions of global deoffshorization, and in particular, tightening of the Ukrainian legislation.
The field of trade has always been the simplest and most popular for offshore applications. One of the main goals of using offshore schemes in export-import transactions was to regulate the customs value of the goods, and, accordingly, the companyâ€™s trading profits. Offshore companies in such schemes were used as intermediaries between the seller and the buyer for the understatement of the value of goods during the export and overstatement - upon import.
However, the process of deoffshorization has reached our country. The provisions for the control of transfer pricing started working in the Ukrainian legislation. The Cabinet of Ministers has approved and periodically reviews the list of the countries with preferential taxation (it includes both classic offshores and jurisdictions, the income tax rate for the companies which have 5 or more...
The National Bank of Ukraine has simplified the conditions for the sale of foreign currency by the clients of the banks in the interbank foreign exchange market. The amendments to the legislation are enshrined in the NBU Resolution No.7 of January 25, 2018 â€śOn Amending certain normative legal acts of the National Bank of Ukraineâ€ť and entered into force on January 27, 2018.
The innovations provide mainly the following:
Clear definition of the clientâ€™s right to apply for the sale of foreign currency to any authorized bank by his choice (regardless of the availability of a current account in foreign currency in this bank).
Clarification of the terms of sale of foreign currency of the clients by the bank. We remind that an authorized bank is required by proxy of the client to sell its own funds in foreign currency no later than 5 banking days, starting from the day of writing off these funds from the clientâ€™s current account. The NBU clarified that in case of transfer of funds for sale by the client from another authorized bank, the sale of this currency is carried out within 5 days from the date of transfer of these funds to the correspondent account of the authorized...
Resolution of the Board of the National Bank of Ukraine â„–386 from 14.09.2016 year (here and after - the National Bank Ordinance) was suspended issuance of individual foreign exchange licenses to individuals.
This measure was introduced in order to significantly reduce the capital outflow from Ukraine. National Bank of Ukraine said that overseas investment is unproductive and negative impact on the economy as a whole.
Thus, in accordance with paragraph 7 of the Resolution of the NBU, "Individuals are prohibited to carry out transactions in cash on the basis of the National Bank of Ukraine of individual licenses."
However, there is an exception to the above, namely, the prohibition does not apply to the operations that are carried out on the basis of individual licenses issued before the entry into force of the Regulation of the NBU.
Also, the Resolution of the NBU has been extended a ban on purchases and transfer of foreign currency, which were held on the basis of the availability of individual licenses of the National Bank of Ukraine, except for such cases as:
a) placement of legal entities of currency values on accounts outside Ukraine;
b) execution of a resident...
National Bank of Ukraine has established an order for identifying the banks risk operations
From the first in September 2016 comes into force, established by the Board of the National Bank of Ukraine â„–369 from 15.08.2016, the order of the document analysis and verification by banks (information) on financial transactions and their participants (hereafter - the Order). In particular, the list of indicators of risk operations, as well as change some existing ones. Just would like to draw your attention that prior to the adoption of the above order, the identification of risk transactions were settled a few officials of the National Bank of Ukraine letters.
This Procedure adopted in order to prevent the commission of risky activities by banks, threatening the interests of depositors or other creditors of the bank and increase the effectiveness of risk management. It should be noted that the provisions of the Order are binding on all banks in Ukraine, as well as all the branches of foreign banks in Ukraine.
On the basis of the provisions of the Order, any bank is obliged to provide a comprehensive analysis and verification of documents (information) on financial...
In August 2016 the Board of the National Bank of Ukraine has taken a number of decisions, which are quite important.
In particular, significant changes have touched: the procedure for the exchange of currency, lending practices by non-residents and residents of the order of transfer of funds, both in national and in foreign currency to non-residents.
Next, we will focus in more detail on each of the following changes.
An important and fundamental change, published 03.08.2015, the Instruction on the organization of currency exchange operations in the territory of Ukraine is the abolition of the requirement of a resident of documents confirming identity in carrying out various operations on the exchange or conversion rates.
However, I would like to clarify that the changes do not cancel, and allow banking institutions not to require proof of identity of the resident in the commission of the following operations:
Sale of foreign currency in the amount not exceeding the equivalent of 150 000 (one hundred and fifty thousand) hryvnia;
The purchase of foreign currency in the amount not exceeding the equivalent of 150 000 (one hundred and fifty...
June 7, 2016 the National Bank of Ukraine approved the Decree â„– 342 "On the settlement of the situation in the monetary and foreign exchange markets of Ukraine" (hereinafter - the "Regulation"), according to which continues a gradual mitigating the regime of currency regulation in Ukraine.
Thus, according to the provisions of the Regulation:
lowered from 75% to 65% the limit of the mandatory sale of revenues from abroad to accounts in foreign currency;
twice increased the purchase limit of cash currency - from 6 to 12 thousand UAH per day;
twice increased the issuance limit (receipt) cash from current and deposit accounts in foreign currency or banking metals - from 50 to 100 thousand UAH per day;
abolished the restrictions on the volume of cash in national currency, which still amounted to 500 thousand UAH per day.
In addition, the Resolution established limiting sizes and conditions for foreign currency transfers. For transfers that do not exceed the equivalent of 15 thousand UAH per day, can be performed without confirming documents and do not require the account opening. If the transfer of foreign currency exceeding the equivalent of 15 thousand UAH, it...
National Bank of Ukraine mitigates previously established restrictions on certain foreign exchange transactions on May 11, 2016. Thus, in the decision NBU number 308 of May 5, 2016 "On amendments to some legal acts of the National Bank of Ukraine" (hereinafter - the "Decree â„– 308"), it is assumed that now the company does not need to sell in foreign currency received for foreign investment in Ukraine. So this operation does not apply to the requirement for compulsory sale of funds in foreign currency at a rate of 75 percent as it was before. This rule will be in effect until June 8, 2016.
Also the Decree number 308 reduced time for operations to reserve funds authorized banks in the national currency and for the transfer of funds in national currency on correspondent accounts of foreign banks from four to three business days. So now inclusive of the June 8, 2016 the National Bank of Ukraine will confirm the information within 3 days that the competent authorized banks in foreign exchange transactions will make the register.
Besides this lifted the ban on the purchase of foreign currency funds for the products that had been imported to Ukraine before...