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About one-off declaration of individuals’ assets

All sensational ideas and discussions about the “tax amnesty shadow of assets” or “legalization of income of dubious origin” embodied in the Tax Committee developed ASU bill “On Amendments to the Tax Code of Ukraine and other legislative acts of Ukraine concerning the single declaration of assets of individuals.”

The draft law MPs are planning to introduce the procedure of single declaration, which envisages the voluntary submission by resident individuals Ukraine in the period from 01 October to 31 December 2016 the information to the tax authorities of its assets (cash, securities, precious metals, real estate and construction in progress , vehicles, aircraft and watercraft, valuable personal property, corporate law, financial instruments, the right to property benefit, other property rights and intangible assets) without specifying their cost and sources of origin. Will be declared as assets under joint ownership, as well as those owned by the other person, manages assets for the benefit of the subject of the declaration.

Finish with a single declaration of payment of the amount of tax liability, independently determined in a one-time declaration (such an obligation shall be deemed agreed) within 30 days after its filing. Subject disposable declaration may also have to pay not previously paid personal income tax from income (the amount of which is determined as their own), which was the source of acquisition of the assets specified in the declaration, at the rate of 5%.

At the same time employees of regulatory bodies is prohibited to refuse to accept such a declaration and the declarant shall be exempt from criminal, administrative and financial responsibility for tax evasion, charges and ERUs for submitting knowingly untruthful statements, as well as for violation of tax and currency legislation (with the exception of heavy crimes), relative to income, on which the procedure is completed single declaration (ie, paid tax). There is also an exemption from liability declarants for violation of competition law and from fines for illegal construction.

In addition, the state guarantees the subject of the declaration of the preservation of public authorities the secrets of his personal data and other information specified in the declaration, the ban on tax inspection upon delivery of disposable declaration or regarding the information specified in it, as well as a ban on the use of this information as evidence the commission of any criminal offense or as a source of the circumstances, which may indicate a criminal offense.

In case of failure to return the declared considered disposable assets registered by other means provided by law, as of December 31, 2015 as well as funds in the amount of 1 mln. UAH.

Another new feature of the bill is the cost control of individuals by the tax authorities. This control provides a comparison of the size carried out in the tax period expenses, which begins with the January 1, 2017 (acquisition of assets, fee or loan issuance in excess of the boundary sum payment in cash, ie over 150 000 UAH.) With the obtained income in the tax period that begins with the January 1, 2016. In case of excess of expenditure over income in the amount of more than 10 times the minimum wage (currently 145 thousand UAH.), The fiscal body shall determine the procedure for the emergence of such excess. If within 60 days the information about the sources of funds for the implementation of such costs is not received, the fiscal authority shall determine the tax liability on personal income tax from the amount of such excess, and penalties in the amount of 25% of the tax liability.

One-time declaration of assets of individuals, the bill provided for the data, especially important on the eve of the introduction of electronic declaration procedure, as it will allow the owners of the shadow of assets “whiten” them at the lowest tax rate, as well as to take into account in the implementation of fiscal expenditure control bodies. However, given the vagueness of the application of the method of cost control and calculation of individuals’ unconfirmed income “, there is a high risk of selective application of the rule of the fiscal authorities and, consequently, its use as a method of pressure on the Ukrainians.

In the case of the adoption of this law, the rate on one-time declaration of assets will enter into force on the day following its publication, but the rate of the method of cost control individuals – from 1 January 2017.

If you have any questions, our company lawyers are always ready to provide you with expert advice.