BILL No 1210: PERSONAL INCOME TAX (INTERNAL TAXATION)

This is to continue the series of publications on tax changes provided by the Bill № 1210.

This time here is the publication № 2 on changes in the field of personal income tax (limited to internal taxation only):

- The extension of the preferential taxation of real estate items to items of unfinished construction (paragraph 172.1 of the Tax Code of Ukraine);

- The application of the 18% rate to the sale of third and subsequent vehicles by the taxpayer within the same year (paragraph 173.2 of the Tax Code of Ukraine);

- On releasing a mortgage debt, the only mortgage principal will fall under taxation (paragraph 164.2.17 of the Tax Code of Ukraine);

- Fourfold increase in fines for failure to submit or submitting an improperly filled form № 1 DF (Article 119 of the Tax Code of Ukraine);

- The introduction of depreciation of trucks (impossibility of depreciation of cars still remains in place) for individual entrepreneurs liable to the general system of taxation; the only costs of repair but not those of overhaul as before can be directly (without depreciation) attributed to the costs of the taxable period (paragraph 177.4.6 of the Tax Code of Ukraine);

- The elimination of the need to file a tax return in cases of sale / gift / exchange of property that has not triggered any tax liabilities to be remitted to the state revenues (paragraph 179.2 of the Tax Code of Ukraine). 

BILL No 1210: CORPORATE INCOME TAX (INTERNAL TAXATION)

Unfortunately, the situation with signing the Bill № 1210 by the President of Ukraine, which significantly “redraws” the Tax Code of Ukraine, is still unclear.

At the same time, given that the chances of its signing by the President are, in my opinion, are fairly high, I decided to publish a series of concise publications outlining the key changes that await all of us in Ukraine, if the Bill becomes an Act.

Publication № 1: corporate income tax (internal taxation):

- The threshold of annual revenue for those taxpayers who may not take into account tax differences and file tax returns once a year increases from UAH 20 to 40 million (paragraph 134.1.1 and paragraph 137.5 of the Tax Code);

- The value of assets that count as fixed assets and are subject to depreciation increases from UAH 6,000 to UAH 20,000 (paragraph 14.1.138 of the Tax Code).

TAX LITIGATION AND QUARANTINE

I was delighted to speak at an e-meeting of the Committee on Tax and Customs Law of the Ukrainian Bar Association dedicated to the issues of tax changes adopted in response to the quarantine period.

My speach concerned specifics of tax litigation over the quarantine period.

Very briefly, such specifics in accordance with the Act of Ukraine of 30 March 2020 No 540-IX are as follows:

- deadlines for consideration of administrative complaints by the tax authorities have been suspended until 31 May 2020;

- due to the imperfection of the wording of the Act it is disputable whether the deadlines for filing administrative complaints by taxpayers have been also suspend until 31 May 2020; 

- the time-limits for bringing lawsuits against tax assessments, time-limits for bringing appeal and cassation claims as well as a number of other procedural time-limits have been suspended for the whole period of the quarantine;

- the possibility of participation in court hearings via a videoconference (EasyCon or other software) has been provided for the period of the quarantine.