The Ukrainian parliament has passed a law on amendments to the Tax Code of Ukraine and some other Ukrainian laws at a closed session on Thursday, July 31.
As for profit tax the lawmakers restricted the beneficial taxation
for collective investment institutions (CIIs), canceled taxation at the
reduced tax (10 percent) on profit received from transactions with securities
and derivatives. The exemption of taxation of hospitality business and
energy companies that generate electricity only from renewable energy
sources was also canceled.
As for value added tax (VAT), the lawmakers prolonged the regime of
exempting transactions on exports of grain and industrial crops from
value added tax until Jan. 1, 2015 and retained the beneficial
taxation for agricultural producers. The lawmakers canceled the
exemption from paying VAT on transactions of supply of timber, firewood
and timber waste. The taxation at a zero VAT rate of services on
transportation of passengers by high-speed Intercity+ trains was also
canceled.
The parliament increased the limit for obligatory registration of
enterprises as VAT payers from Nov. 1, 2014 – from Hr 300,000 to Hr 1 million. The electronic VAT administration system is introduced
from Jan. 1, 2015.
The parliament temporarily, until the end of 2014, increased the
royalties for oil and gas condensate to 45 percent for extraction from the
depth of up to five km, and to 21 percent for extraction from the depth of over
five km. Up to the date, the royalties for the use of deposits during
extraction of oil and gas condensate for fields over five km deep were
18 percent of their cost. The royalty for the use of deposits for oil for
fields up to five km deep was 39 percent and for gas condensate – 42 percent.
In addition, by late 2014, the royalties for the use of deposits
during extraction of gas not for the needs of households were increased
to 55 percent and 28 percent (depending on the depth of extraction). Up to the date,
the royalties for the use of deposits during gas extraction which is
sold for needs other than those of households amount to 28 percent of the cost
of gas for the depth from five kilometers and 15 percent for the depth over
five kilometers. According to the decision of the parliament, the
reducing coefficient of 0.55 will be applied to the royalty on gas
extracted from new wells (during two years from the moment of the
exploitation of the well) to stimulate gas extraction.
The excise duty on alternative types of fuel at 99 euros per tonne has
been imposed temporarily until Jan. 1, 2015. Until now, the excise
duty was not imposed on alternative types of fuel.
The lawmakers also supported the increase in the special excise
duties on cigarettes with filter and without it by 5 percent. The excise duties
on cigarettes with filter are increased from Hr 216.50 to Hr 227.33
per 1,000 units, and for cigarettes without filter – from Hr 96.88 to Hr 101.72 per 1,000 units. The minimum excise duty liabilities for
cigarettes without filter is increased from Hr 127 to Hr 133.35 per
1,000 units, and for cigarettes with filter – from Hr 289.63 to Hr
304.11 per 1,000 units.
The parliament also decided that dietary foods with spirit content of
8.5 percent and more are considered alcohol and set the excise duty for such
products at the level of the excise duty for vodka – Hr 70.53 per liter
of 100 percent spirit with excise labeling of the products.
The new general tax – war tax – of 1.5 percent of the wages is introduced until Jan. 1, 2015
