LEGISLATIVE AMENDMENTS

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1 111 1 Ukraine Ratified the WTO Agreement on Simplification on Customs Procedures 2 Law on Prevention of Corruption in Sports in Effect 10 December Law on Additional Guarantees to Persons Employed by Individual Entrepreneurs Adopted 4 National Bank of Ukraine Extended Effect of Main Currency Restrictions for 3 Months 5 Amendments to the Instruction on Procedure for Opening, Use and Closing of Accounts in the National and Foreign Currencies 6 New Form of Declaration of Property Status and Income for Individuals 7 State Fiscal Service Streamlined the Process of Execution of Agreements in Electronic Form LEGISLATIVE AMENDMENTS EXCLUSIVE ANALYTIC MATERIALS 8 Discussion of Tax Reform Proposed by the Ministry of Finance of Ukraine Underway Regarding any matters or clarifications provided in this information bulletin, turn to the specialists, whose contact information is provided below: UKRAINE RATIFIED THE WTO AGREEMENT ON SIMPLIFICATION ON CUSTOMS PROCEDURES On 6 December 2015, the Law No. 745-VIII took effect based on which Ukraine ratified the Protocol on Amendments to the Marrakesh Agreement Establishing the WTO, signed on 27 November Valentyn Gvozdiy Managing Partner, attorney v.gvozdiy@golaw.ua From now on, the Marrakesh Agreement is supplemented with a new Agreement on simplification of trade procedures that stipulates simplification of the customs clearance procedures, extensive application of the «one stop shop» system, procedure for accelerated dispatch of goods, reduction of number of documents and formalities based on elaboration of common customs standards, and cooperation between customs authorities of different countries. In particular, the Agreement countries are obliged to ensure a non-discriminative and uncomplicated procedure for publication of the intelligence as regards their effective rules and procedures for performance of the foreign economic activity (i.e., procedures for import and export, current rates of duties and taxes applicable or related to import/export operations, etc.) In addition, the Agreement obliges the signatories to provide to the participants of the international trade sector with required advice and comments in respect of their special legislation. Kateryna Tsvetkova Lawyer, attorney k.tsvetkova@golaw.ua

2 LAW ON PREVENTION OF CORRUPTION IN SPORTS IN EFFECT On 3 December 2015, the Law of Ukraine No. 743-VIII On Prevention of Influence of Corruptive Offences on the Results of Official Sport Competitions dated 3 November 2015 took effect. The Law prohibits any illegal influence on the results of official sport competitions, defines the key principles and approaches to the prevention and identification of corruptive legal offences in the area of sport, and prescribes administrative and criminal liability for such offences. In particular, the Criminal Code of Ukraine was added with Article 3693 that envisages liability for illegal influence on the results of official sport competitions, and the Code of the Administrative Proceeding of Ukraine was supplemented with Article stipulating liability for violation of the prohibition of sport bets involving sport competition manipulation resulting in obtaining illegal benefits. LAW ON ADDITIONAL GUARANTEES TO PERSONS EM- PLOYED BY INDIVIDUAL ENTREPRENEURS ADOPTED The President of Ukraine signed the Law of Ukraine No On Amendments to Article 119 of the Labor Code of Ukraine applicable to the employees enlisted during mobilization for special period dated 12 November The amendments to the Labor Code stipulate that in case of their enlistment the persons employed by individual entrepreneurs, farms and agricultural cooperatives shall enjoy the same legal rights and guarantees as those granted to the employees of enterprises, institutions and organizations, namely: preservation of job, position and compensation of average salary. This Law will take effect on the day following the day of its publication. NATIONAL BANK OF UKRAINE EXTENDED EFFECT OF MAIN CURRENCY RESTRICTIONS FOR 3 MONTHS On 5 December 2015, took effect Resolution No.863 of the National Bank of Ukraine On Regulation of Situation on Money and Credit Market and Currency Market of Ukraine dated 4 December 2015, which will remain in force till 4 March 2016.

3 The Resolution extended the period of effect of the following main restrictions: obligatory sale of 75% of foreign currency values transferred to Ukraine from abroad for the benefit of legal entities; performance of settlements per export and import operations within 90 calendar days at the latest; prohibition of early repayment by residents of loans and borrowings in foreign currency under agreements with non-residents, etc. At the same time, the Resolution eased a number of the current restrictions. For instance, the requirement as regards mandatory sale of 75% of proceeds in foreign currency does not apply anymore to the loans issued to resident borrower by way of payment by the foreign lender of funds under liabilities of such resident to non-resident exporter under foreign economic contract without crediting the loan to the account of the resident within an authorized bank to the extent that such loan is granted with participation of a foreign export and credit agency. Furthermore, the above requirement does not cover the monetary deposits securing tender bids (guarantee, collateral, prepayment, deposit) submitted by non-resident for participation in the public procurement procedures. The Resolution eased requirements to the foreign settlements by individuals performed using electronic payment means. The restriction of the amount of transfer from current account in foreign currency by the amount not exceeding UAH 150,000 per month does not apply anymore to the cashless settlements made using electronic payment means with the objective of payment for products and goods for own consumption by individuals. The prohibition on purchase of foreign currency for further transfer abroad of the funds obtained by a foreign investor from sale of domestic issuers securities does not apply to the funds obtained from the sale of Ukraine s T-bills both via and outside foreign stock exchanges. In addition, the Resolution reinforced the financial discipline of banks. AMENDMENTS TO THE INSTRUCTION ON PROCEDURE FOR OPENING, USE AND CLOSING OF ACCOUNTS IN THE NATIONAL AND FOREIGN CURRENCIES The National Bank of Ukraine issued the Resolution No. 833 dated 27 November 2015 that approved amendments to the Instruction on the procedure for opening, use and closing of accounts in the national and foreign currencies.

4 The above amendments stipulate a number of new rules: the banks are obliged to independently verify the identities of their customers; the procedure for opening of entities accounts by banks has been simplified (when opening accounts, to obtain information on subject entities, the bank should only obtain and print such data from the official web-site of the administrator of the Uniform State Register of Legal Entities and Private Entrepreneurs); the amendments establish a procedure for opening current accounts by the guardians on behalf of the individuals recognized incompetent by court; finally, the amendments implemented the principle of implied assent according to the Tax Code of Ukraine in case of non-receipt by the bank from the supervisory body of notification on registration of an entity s bank account. This Resolution took effect on 2 December NEW FORM OF DECLARATION OF PROPERTY STATUS AND INCOME FOR INDIVIDUALS A new form of declaration of property status and personal income will be implemented from 1 January The new form of the declaration and the Instruction on completion of the tax declaration disclosing property status and personal income have been approved by Order No. 859 of the Ministry of Finance dated 2 October 2015 and have been in effect since 17 November For convenience of the individuals, the new form of the declaration combines the reports on payment of personal income tax and military duty (without submission of any supplementary reports). When filling up the declaration, the taxpayer shall independently determine his/her status: citizen of Ukraine; person pursuing independent professional activity; or an entrepreneur subject to general rules. Furthermore, in his/her declaration the taxpayer shall specify information as regards income not subject to personal income tax and the overall annual income amount. Furthermore, from now on, supplements to the declaration shall be completed only in case of receipt of income assessed applying special procedure in cases of: collection of income from two or more tax agents in cases envisaged in the Tax Code; transactions with investment assets; collection of foreign income; assessment of taxable income from business and independent professional activity. A significant amount of the information that was previously specified in the supplements shall be from now on reflected in the main body of the declaration, including information on the authorized person, information on alienation of immovable (movable) properties, information on income collected, the list of the (sub)leased properties, etc. The amendments reduced the volume of the declaration from 2 sheets to 1 and the number of appendices from 7 to 4.

5 STATE FISCAL SERVICE STREAMLINED THE PROCESS OF EXECUTION OF AGREEMENTS IN ELECTRONIC FORM The State Fiscal Service upgraded electronic service named Registration of Agreement on Recognition of Electronic Documents. From 25 November 2015, the payer needs only to make a single agreement with its main local branch of the State Fiscal Service which (the agreement) entitles to submit electronic documents to any SFS branch where the payer is registered. Furthermore, the payer is not obliged to make agreement with the SFS branch in secondary place of registration. DISCUSSION OF TAX REFORM PROPOSED BY THE MIN- ISTRY OF FINANCE OF UKRAINE UNDERWAY On 30 November 2015, the Ministry of Finance of Ukraine published the draft law «On Creation of Competitive Conditions in Taxation and Incentives for Economic Activity in Ukraine». Among other things, the draft law suggests to put the Tax Code in a new wording and establish a flat rate of 20% on key taxes, including the income tax, value added tax, personal income tax, and the uniform social security contribution. Currently, underway is the discussion of the draft law and implications of its adoption for the taxpayers.

6 Information bulletin provided by GOLAW Firm is an outline of current legislative novelties in Ukraine. GOLAW Firm is under no obligation to amend this Information Bulletin in connection with further amendments introduced into Ukrainian laws. Please, be advised that this Information Bulletin is not a legal advice and may be used only for obtaining general overview about its subject matter. In order to avoid risks of upholding any decision based on information contained in this Information Bulletin, please, consult a qualified specialist of our firm in each particular case. GOLAW Firm shall not bear responsibility if information from this Information Bulletin was used without consulting a qualified specialist regarding each particular matter. 19B Instytutska Street, Suite Kyiv, Ukraine info@golaw.ua