The Verkhovna Rada registered draft law “On the tax sovereignty of Ukraine and offshore companies” № 4380 (hereinafter – the “Project number 4380”) and the Draft Law “On Amendments to the Tax Code of Ukraine in connection with the adoption law of Ukraine” About tax sovereignty of Ukraine and offshore companies “» № 4381 (hereinafter – the “project number 4381”) on 12 April, 2016.
According to the explanatory memorandum to the draft decision number 4380 of this law aims to determine the content of the tax sovereignty of Ukraine, as well as the content of the sovereignty of foreign states. Besides this, lawmakers plan to minimize the use of offshore companies to evade taxes in the territory of Ukraine or to deal with corruption offenses and money laundering from crime, terrorist financing or other socially dangerous criminal offenses, including those committed by politically exposed persons – Ukrainian residents.
Also Project number 4380 is assumed a definition of concepts which have not yet been enshrined in the legislation of Ukraine, in particular, “the anonymous company”, “anonymous account”, “offshore company”, “offshore zone”, “offshore country” and many others. An interesting innovation is the proposal of creating the Unified State Register of offshore jurisdictions and types of offshore companies the holder of which is the Ministry of Finance of Ukraine. With the introduction of this bill lists the Cabinet of Ministers of Ukraine and the low-tax offshore countries will be upgraded into force together with the list of some offshore companies with signs offshore and given to the latter the right to make changes to such lists that will make such lists more dynamic.
The explanatory note to the draft number 4381 substantiates that the adoption of the bill due to the need to achieve the objectives set out in the Law of Ukraine “On the tax sovereignty of Ukraine and offshore companies” reducing tax evasion using offshore companies, including illicit budgetary compensation VAT. Legislative initiative is also the author pointed out that the adoption of these draft number 4381 changes will increase revenue and ensure a balance of the consolidated budget of Ukraine.