Holos Ukrainy Publishes Tax Code

Coin JarThe Verkhovna Rada’s official newspaper Holos Ukrainy has published the Tax Code.

The Tax Code was placed on the paper’s December 4 issue.

Apart from this, Holos Ukrainy published the law “On amending several legislative acts of Ukraine in connection with endorsement of the Tax Code of Ukraine.”

The Code sets and adjusts nation-wide and local taxes and duties, as well as their administration.

According to the document the profit tax rate lowers stepwise from 25% to 16%: from 25% to 23% from 2011, to 21% from 2012, to 19% from 2013, and to 16% from 2014.

Light industry, shipbuilding, aircraft-building enterprises and the hotel business are granted a ten-year remission of payment of profit tax.

The Code also supposes a reduction of value added tax to 17% from 20% and introduction of automatic reimbursement of VAT.

From January 1, 2011 to December 31, 2013 the VAT rate will make 20% and 17% from January 1, 2014.

Taxation of physical entities’ income, as the document says, will be at the rate of 15% for persons with monthly income not exceeding 10 minimum wages, and of 17% for those whose monthly income exceeds 10 minimum wages.

The Code provides for taxation of individuals profits from bank deposits at the rate of 5%; this tax will be introduced from 2015.

The document envisages introduction from 2012 of a real estate tax, from which are exempted registered residents of flats of floor area not more than 120 square meters and houses not more than 250 square meters.

When calculating tax liabilities, the taxable base will be reduced for flats by 120 square meters and for houses by 250 square meters.

This tax rates are fixed by local authorities in the following limits: for flats of net floor area not more than 240 square meters and houses not more than 500 square meters at the level of up to 1% from the size of minimum wage as at January 1 of the reporting year per square meter; for flats of net floor area more than 240 square meters and houses more than 500 square meters at the level of 2.7% from the size of minimum wage as at January 1 of the reporting year per square meter.

The reference tax period is one calendar year.

By the decision of local council, completely or partially from payment of this tax can be exempted: dwelling houses; adjacent accommodations for keeping cattle, birds and storage of implements, garages, cellars and lofts, and also dilapidated and repair houses.

The system of simplified taxation remains unchanged in the Tax Code, small business gains the right to choose the form (paper or electronic) of submission of tax accounts (big and mid-scale business will have to submit them in electronic).

The Tax Code enters into force on January 1, 2011, apart from its separate provisions.

As Ukrainian News earlier reported, President Viktor Yanukovych on December 3 signed the Tax Code into law, which the Verkhovna Rada had passed on December 2 taking into consideration the president’s proposals.

On November 30, Yanukovych vetoed the Tax Code the parliament had approved on November 18.

The endorsement of this document sparked many-thousand protest actions in the city of Kyiv and in provinces.

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