Recent News

On July 14, 2017, the Parliament of Cypriot amended the current legislation on granting tax resident status to foreigners. We should remind that foreign tax residents of Cyprus benefit from the agreements on avoidance of double taxation signed by the state, and they also benefit tax exemptions when receiving dividends, interest and royalties. Until recently, the main condition for obtaining this status was staying on the island for at least 183 days a year. The adopted innovation provides for the possibility for individuals to become a Cyprus tax resident, staying on its territory for only 60 days a year, while observing a number of conditions. So, in order to obtain a Cyprus tax residency under the 60-day rule, which took effect on January 1, 2017, you must: remain in Cyprus for at least 60 days during the tax year in question; not reside in any other single state for a period or periods exceeding 183 days; not be tax resident in any other state; carry out business activities, work in Cyprus or be a director of a company that is tax resident in Cyprus at any time during the tax year in question (at the same time, if a person ceases to conduct business or employment during...

The National Bank of Ukraine continues to simplify the business environment and the work of banking institutions in accordance with the requirements of the Law of Ukraine “On Amendments to certain legislative acts of Ukraine on the use of seals by legal and physical persons-entrepreneurs”. The changes are made to a number of NBU regulations providing for the removal of some bureaucratic obstacles. So, in accordance with the innovations, the clients of the authorized banks that wish to conduct a currency transaction will no longer need to seal the documents which are necessary for carrying out this transaction. In addition, the demand regarding the certification with the seal of the documents submitted to the NBU is canceled. And, in a number of cases, it is no longer necessary to notarize the originals or copies of the documents for conducting currency transactions. At the same time, the translations of contracts and other documents submitted by the banks and their clients to the National Bank still must be certified by a notary. These steps are fixed by the Decree No.102 of October 10, 2017 “On Amendments to certain legal acts of the National Bank of Ukraine” and entered...

The NBU continues the gradual mitigation of exchange restrictions, as it is reported on the website of the regulator. We remind that until recently, the transfer of foreign currency for the placement of guarantee deposit outside Ukraine for the provision of transactions has been allowed only to banking institutions participating in the international payment systems. Now, according to the decision of the Board of the National Bank, such operations on the basis of an individual license of the NBU can be carried out by both banks and non-bank financial institutions. In addition, the procedure for the application of exceptions to the prohibition of early loan repayment and loans in foreign currency received by the residents of the country from non-residents has been specified. Such exceptions include all payments under certain credit agreements or loan agreements, that is, the payments on the principal amount, taking into account interest and other payments provided for under the agreement. It is expected that the innovations, fixed by the Resolution of the NBU Board of October 10, 2017 No.101 and entered into force on October 12, 2017, will contribute to the creation of favorable...

On Monday, October 9, Deputy Minister of Finance of Ukraine Sergey Marchenko and the Minister of Economy of the Republic of Turkey Nihat Zeibekci signed the Protocol on amendments to the Agreement on avoidance of double taxation between the two states. The adopted innovations will allow physical and legal persons to avoid paying double taxes on the income received in the territories of Ukraine and Turkey. This can be achieved with the help of the distribution of the right to tax certain types of income depending on the place of their origin between the two countries, as well as by taking into account the taxes paid in the territory of another state in the tax obligations of the taxpayer of one state. It is expected that the changes will create better conditions for the investors of both jurisdictions and they will increase the entrepreneurial initiative. The settlement of the issue of international taxation of income in bilateral relations between Ukraine and Turkey will help eliminate tax discrimination, as well as establish cooperation between the tax authorities of the states and the exchange of tax information. The signed Protocol provides: expansion of the meaning of the...

On October 9, Ukraine and the United Kingdom of Great Britain and Northern Ireland amended the Agreement on avoidance of double taxation, provided for by the relevant Protocol. This was reported by the press service of the Ministry of Finance. The amendments to the agreement are aimed at exemption of the physical and legal entities from paying double taxes on incomes received in the territories of both parties. This can be achieved both by distributing the right to tax certain types of income depending on the place of their receipt between the two countries, and by taking into account the taxes paid in the territory of the other country in the tax obligations of a taxpayer of one country. It is expected that the signing of the Protocol will contribute to the creation of the favorable conditions for the investors in Ukraine and the United Kingdom, as well as to increase the business initiative of the entrepreneurs. The settlement of income taxation in bilateral relations between Ukraine and Great Britain will allow to eliminate tax discrimination, to ensure the exchange of tax information and improve the cooperation between the tax authorities of the states through the development...

The Federal Council of the Swiss Confederation adopted the Ordinance on the automatic exchange of country-by-country reports, which will enter into force on December 1, 2017 as an addition to the Federal Law on the automatic exchange of country-by-country reports of the transnational companies. It should be mentioned that this Law and the Multilateral Agreement of the competent authorities on the exchange of the intercountry reports to date are the legislative base of Switzerland for the automatic exchange of financial information with other states. The adopted Ordinance introduces a requirement for transnational companies that operate in Switzerland, to compile country-by-country reports on an annual basis starting in 2018, as well as fixes the content of these reports. Switzerland will begin the exchange of country-by-country information in 2020. As the Federal Council assures, this decision is designed to bring the legal basis of the state in line with one of the international standards for preventing the base erosion and profit shifting, the purpose of which is to ensure transparency of taxation of transnational companies and the development of a unified concept for the...

On October 4, 2017, from 10-00 a.m. to 1-00 p.m., in the premises of the Supreme Administrative Court of Ukraine, a round table was held on the topic "Current problems of administrative law in tax disputes". The event was held in the format of reports on specific topics. At the meeting, the attention was focused on who should nevertheless act as a respondent in the disputes related to the refusal in the registration of tax bills, and what requirements the statements of claim should contain for effective protection of the violated right. In addition, it was noted that the provisions of by-laws adopted by the Cabinet of Ministers of Ukraine and the Ministry of Finance of Ukraine are not fully in line with the norms of the Tax Code of Ukraine, which regulate the issues of suspension of the registration of tax invoices. The opinion was expressed (which is difficult to disagree) that the introduction of an automatic blocking of the tax bills, in fact, repeated the idea of ​​unilateral termination of agreements "on the recognition of electronic documents", which the fiscal authorities used for the refusal in the registration of the tax bills. In addition, the aspect of proof in the...

On August 30, 2017, an international team of researchers notified the Estonian government of a security vulnerability of the ID cards issued to around half of the Estonian population. The potential risk concerns the ID cards issued since October 2014 (including cards issued to e-residents), i.e. about 750,000 cards. In this regard, the Department of the Estonian Information System Authority has taken temporary measures to restrict some features of the ID cards of this period of release. Since there were no real cases of unauthorized use of the ID cards, today the vulnerability is theoretical. A security breach was discovered in connection with the advancement of the “e-Estonia” national initiative, designed to bring citizens into the digital ecosystem of public and private services built upon the security and authentication. The Estonian ID card unifies access to a host of services. Using this card, the citizens can carry out banking operations, vote, file their tax returns, apply for state benefits, apply to serve in the armed forces and fulfil many other actions remotely. Business owners can use the ID cards to file their annual reports, apply for licenses, and so on,...

Within the framework of the judicial reform, the Verkhovna Rada of Ukraine adopted the new Economic Procedure Code, the Civil Procedure Code and Code of Administrative Court Procedure. We remind that the innovations were initiated by Peter Poroshenko even in spring. The new procedural legislation regulates such aspects of the Ukrainian legal proceedings as intervention, change of the subject or grounds for the claim, the composition of the court during the examination of the case on newly discovered circumstances, the clear stages of the trial and the deadlines for the filing of evidence are fixed, reasonable restrictions on the possibility of postponement of the consideration and suspension of the proceedings on the case are set, etc. The participants in the case will be required to state their position in it in the procedural documents specified by law, namely in the claim, withdrawal, response to the withdrawal and denial, submitting them to the court within the time limits specified by law or court. The consequences of non-observance of the terms for submission or concealment of evidence will be their subsequent non-acceptance by the court and the application of means of...

The Ministry of Finance of Ukraine has developed a solution that will improve the operation of the system of registration suspension of the TI and it will allow to avoid blocking of the TI of the real sector of the economy. The innovation mainly relates to the agricultural sector, since the increase in the percentage of "blockages" has been recorded in it recently. We remind that since July 1, the system of automated registration of tax invoices has begun to work in full force, designed to prevent billions of twists with VAT and to counter the receipt of tax credits by the unscrupulous payers. However, the practice shows that due to inadequate operation of the system, the honest Ukrainian business sometimes suffers. According to the results of daily monitoring of the system's operation in the context of different branches, the Ministry of Finance discovered a significant increase in the number of suspended tax invoices of the payers of the real sector in the sphere of agriculture, forestry and fisheries. In June 2017, the share of the invoices issued in this industry was 5% of the total number of suspended TI/ AC, in July - 18%, and in August - 29%. After holding a series of...