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Parliament of Ukraine proposed to impose a tax on transactions from offshore jurisdictions

Parliament of Ukraine proposed to impose a tax on transactions from offshore jurisdictions Offshore in Ukraine

The Parliament of Ukraine once again registered the Draft Law on Amendments to the Tax Code of Ukraine on April 13, 2016 on introduction of a tax on transactions from offshore jurisdictions number 4413, by N. Korolevskaya and Y. Solod (hereinafter – the “Project number 4413 “).

A memorandum to the Project number 4413 proposeto introduce a tax on transactions from offshore jurisdictions from 1 January 2017. The rate of the tax is set at 15% of the payment amount payable to non-residents that have offshore status.

According to the memorandum to the Anti-offshore law, taxpayers are entities who pay for goods (works, services) to non-residents with offshore status, or perform calculations by such non-residents or their bank accounts (including opened in banks of Ukraine), regardless of whether such payment is made directly or through other residents or non-residents.

To ensure the tax on transactions from offshore jurisdictions the banks will be banned to accept vouchers to perform conversion of funds to non-residents with offshore status without simultaneous offshore tax payment to the state budget of Ukraine.

Initiators stated that these changes will allow to tighten control over tax evasion on the legislation level and withdrawal amounts billions abroad but experience shows that business always ahead and tighten control over trading operations would complicate foreign investment schemes.

Author: Sergey Panov
managing partner Finance Business Service
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