From April 3, Diia.Signature will comply with the European Union's eIDAS rules . It can be used to sign documents or agreements that are valid both in Ukraine and in the EU countries, as reported by the Ministry of Digital Transformation of Ukraine.
Previously, counterparties in the EU could not verify the Ukrainian electronic signature due to the lack of technological compatibility.
Recently, the European Commission published a list of countries included in the special TC AdES LOTL list, which contains information on electronic signatures and seals of non-EU countries . Ukraine became the first country included in this list.
Diia.Signature EU is legally binding and admissible in court even if there is no qualified electronic signature in the EU. According to EU rules, non-EU e-signatures can be used as extended e-signatures in the EU.
On 1 April, the Law of Ukraine No. 2888-XI on legalisation of electronic money came into force.
In general, it is necessary to understand exactly what e-money means and why it should not be confused with virtual currencies (cryptocurrencies), which is enshrined in the Law on Virtual Assets.
According to the Payment Services Act, which enshrines the concept of e-money, it means the following:
- E-money is a digital form of expression denominated in hryvnia, used by both individuals and legal entities for payment transactions and settlements;
- it has an extended range of issuers accepted by the NBU to provide payment services for issuance and payment transactions with the E-money (including opening and servicing of e-wallets).
- The status and exchange rate of the E-money will be equated with the fiat currency, the national currency of Ukraine.
Whereas, according to the Law on Virtual Assets, virtual (digital) money can be expressed in various forms, which are created by cryptographic algorithms and exist only in digital form, without providing fiat currency, and are not means of payment.
To issue e-money, the issuer needs to receive physical money in return in the form of fiat money. And the issuance of cryptocurrency takes place entirely online, using computing systems to generate unique sets of codes and numbers.
This e-money legalisation law amends the Tax Code to equate and erase the distinction between physical and e-money transactions. In particular, payments for services rendered (works performed, goods); payment of public utilities, taxes and charges; possibility to pay tax liabilities in e-money (when funds are credited to the Treasury, it will be fiat money); funds can be recovered from accounts and e-wallets to pay tax debts: item 95.3 provides for recovery of funds from e-wallets. The issue of e-money is exempt from taxation.
An important point is that, pursuant to NBU regulation No. 18 of 24.02.2022 "On operation of the banking system during martial law", issuance and distribution of e-money and replenishment of e-wallets are suspended. Therefore, the rules of the new law on e-money transactions will take effect after the above-mentioned restrictions are lifted.
The Law 2654-IX “On Amendments to the Tax Code of Ukraine and some other laws of Ukraine on the peculiarities of taxation of business activities of e-residents” came into force.
The Ministry of Transformation reported that the testing of the project for government agencies will take place in the near future. And after the approval of all the necessary additional regulatory framework,foreign IT specialists will be able to become entrepreneurs in Ukraine and pay taxes to the state budget, and all this will happen online.
The launch of the e-residency project will provide foreigners with the opportunity in a few clicks
· to become an entrepreneur in Ukraine;
· manage your business remotely using modern technologies;
· sign documents with an electronic signature;
· remotely open and manage bank accounts;
· pay taxes on preferential terms.
According to the law, entrepreneurs with income in Ukraine cannot be e-residents. This means that e-Residents will only serve other foreigners. Citizens of Russia and "gray" or "black" FATF countries will not be able to become e-residents.
By order of the Ministry of Justice dated March 29, 2023 No. 1158/5 , changes were made to the requirements on filling out the approved forms of applications in the field of state registration of legal entities, individual entrepreneurs and public organizations (hereinafter referred to as the EDG) and posted in a new edition .
1. It is clarified that when writing the name of a legal entity in a foreign language, capital and small letters of the Latin alphabet will be used.
2. The name of a separate section must contain only the words "branch", "representative" and an indication of belonging to the legal entity that created the specified separate section. The words "separate section" are no longer mandatory.
3. approved application forms in the field of state registration decreased from 10 to 9 . Thus, the application form (Form 6) for confirming information about the ultimate beneficial owner is excluded from the list.
Information about the last beneficial owner of a legal entity is submitted and subsequently updated by all legal entities , except for political parties , their structural bodies, trade unions , their associations and organizations provided for by the charters of trade unions and their unions, creative unions and other local divisions, organizations, employers and their associations, bar associations, bureaus, organizations exercising professional self-government in the field of notaries, state bodies, local self-government bodies , their associations, public legal entities (legal entities created in the image) shares determined by the Cabinet of Ministers of Ukraine from the list of foreign stock exchanges (regulated markets), which is formed in accordance with the rules, taking into account the requirements for disclosure of information on the ultimate beneficial owners of PJSCs listed on at least one stock exchange (regulated market), which are equivalent to those adopted in the European Union), State and Public Enterprises , Enterprises, Organizations, Chambers of Commerce and Industry, State Pension Fund, Housing and construction cooperatives, Cottage ( cottage - construction ) cooperatives, Garden-garage (garage-building) cooperatives (societies), Associations of apartment owners (HOA), Non-profit organizations and agricultural cooperative organizations Associations of homeowners , agricultural cooperative associations , separate structural subdivisions with the status of a legal entity (with the exception of a separate subdivision of a foreign non-governmental organization) included in the register.
4. The content of the application forms has been partially changed, especially on the example of Form (2), the application pages are formed in the following order: page 1 (main), page 2 (statement of the legal entity, name), page 3 (statement of the head), page .4 (information about the founder/participant), page 5 (information about the ultimate beneficiary), page 6 (information about the termination of the legal entity, contact information), page 7 (information about the person who can act on behalf of the legal entity), p. 8 (information on succession), p. 9 (information on the choice of taxation system), p. 10 (information on entry into the register of non-profit organizations).
5. According to the Regulations on the state registration of legal entities, individual entrepreneurs and non-legal entities, public organizations, approved by order of the Ministry of Justice of Ukraine dated 09.02.2016 No. 359/5, copies of the document proving the identity and citizenship of the person who is the ultimate beneficial owner of the legal entity (document confirming citizenship) may be submitted without a notarized certificate.
6. Submission of applications in accordance with the forms approved by this Order regarding the choice of a simplified taxation system and / or voluntary registration as a VAT payer and / or inclusion in the Register of non-profit institutions and organizations during state registration of changes in information about a legal entity or individual entrepreneur contained in the Unified State Register by filling out the relevant pages of applications will be carried out from the date of placement of the relevant announcement on the website of the Ministry of Justice of Ukraine.
The updated application forms will be effective May 1, 2023.
On April 28, Law No. 2970-IX on the automatic exchange of information on financial accounts — the Common Reporting Standard (CRS) — entered into force.
As already noted in our previous article, news for March, the draft law provides for the collection and exchange of information regarding the accounts of residents of participating countries that have implemented such a standard within their national legislation. Information about such accounts is submitted by financial institutions to the competent authority of the participating country, which further sends information about the financial accounts to the jurisdictions in which the owners and controlling persons of the owners of the financial accounts are residents.
In Ukraine, which is joined the Multilateral Agreement on Automatic Exchange in August 2022 and, from now on, also implemented the standard by adopting the law, such a competent body is the State Tax Service of Ukraine.
Accordingly, starting from April 28, the main provisions of the law came into effect, in particular, the updated version of clause 44.3 of Article 44 of the Tax Code of Ukraine regarding the terms of storage of primary documents.
Therefore, in accordance with the new terms of storage of primary documentation, the following have been selected:
· 2555 days - for documents and information necessary for tax control;
· 1,825 days - for primary documents, accounting registers, financial statements, other documents related to the calculation and payment of taxes and fees, as well as legal entities that have chosen a simplified taxation system, with the exception of documents to which a longer term applies storage;
· 1,095 days - for other documents not covered by the requirements of the first two options;
· 1,095 days - for documents related to the fulfillment of the requirements of other legislation, the control of compliance of which is entrusted to the control bodies, including permit documents;
· In the case of liquidation of a taxpayer, documents for a period of activity of at least 1,825 days (2,555 days for documents and information necessary for the implementation of tax control of CIC and Transfer Pricing), which preceded the date of liquidation of the taxpayer, are transferred to the archive in accordance with the procedure established by law.
Among other things that will come into force later, you can highlight the following:
· International exchange of information on customer accounts, as well as provision of reports on accountable accounts, which will come into force on June 30, 2023;
· Liability for violation of requirements for identification of accountable accounts and submission of reports for automatic exchange of information on financial accounts, effective from January 1, 2024;
· Assigning to specially defined subjects of primary financial monitoring persons who provide services related to the creation, operation or management of trusts and other entities without the status of a legal entity, which will take effect on June 30, 2023.
On April 11, the Verkhovna Rada of Ukraine adopted the bill on exemption from tax on real estate, other than land, for Farmers, destroyed or damaged.
The draft law clarifies the exemption from the need to pay land fees, the minimum tax obligation and the single tax for agricultural land located in territories where hostilities are taking place or were taking place or temporarily occupied, and for lands that are in conservation or contaminated with explosive objects.
The draft law proposes to create a mechanism for providing benefits for property that is destructive or in need of major repairs based on data from the State Register of property damaged and destroyed as a result of hostilities, terrorist acts, acts of sabotage caused by armed aggression and the settlement of a mechanism for administering benefits from payments of a minimum tax liability and a unified group 4 tax for lands, for lands in conservation or littered with explosive objects through obtaining relevant data through the State Land Cadastre.
The draft also clarified that 30% of the land bank of producers who were payers of the fourth group before February 24, 2022 fall on the territories of military operations or occupied territories, then for them the limit volume of agricultural production will be reduced to 50% (this provision will apply and indicators for 2022).
In order to prevent abuse and the use of benefits defined by law, the Ministry of Agrarian Policy will initiate a separate procedure for monitoring the use of such land plots.
Previously, counterparties in the EU could not verify the Ukrainian electronic signature due to the lack of technological compatibility.
Recently, the European Commission published a list of countries included in the special TC AdES LOTL list, which contains information on electronic signatures and seals of non-EU countries . Ukraine became the first country included in this list.
Diia.Signature EU is legally binding and admissible in court even if there is no qualified electronic signature in the EU. According to EU rules, non-EU e-signatures can be used as extended e-signatures in the EU.
On 1 April, the Law of Ukraine No. 2888-XI on legalisation of electronic money came into force.
In general, it is necessary to understand exactly what e-money means and why it should not be confused with virtual currencies (cryptocurrencies), which is enshrined in the Law on Virtual Assets.
According to the Payment Services Act, which enshrines the concept of e-money, it means the following:
- E-money is a digital form of expression denominated in hryvnia, used by both individuals and legal entities for payment transactions and settlements;
- it has an extended range of issuers accepted by the NBU to provide payment services for issuance and payment transactions with the E-money (including opening and servicing of e-wallets).
- The status and exchange rate of the E-money will be equated with the fiat currency, the national currency of Ukraine.
Whereas, according to the Law on Virtual Assets, virtual (digital) money can be expressed in various forms, which are created by cryptographic algorithms and exist only in digital form, without providing fiat currency, and are not means of payment.
To issue e-money, the issuer needs to receive physical money in return in the form of fiat money. And the issuance of cryptocurrency takes place entirely online, using computing systems to generate unique sets of codes and numbers.
This e-money legalisation law amends the Tax Code to equate and erase the distinction between physical and e-money transactions. In particular, payments for services rendered (works performed, goods); payment of public utilities, taxes and charges; possibility to pay tax liabilities in e-money (when funds are credited to the Treasury, it will be fiat money); funds can be recovered from accounts and e-wallets to pay tax debts: item 95.3 provides for recovery of funds from e-wallets. The issue of e-money is exempt from taxation.
An important point is that, pursuant to NBU regulation No. 18 of 24.02.2022 "On operation of the banking system during martial law", issuance and distribution of e-money and replenishment of e-wallets are suspended. Therefore, the rules of the new law on e-money transactions will take effect after the above-mentioned restrictions are lifted.
The Law 2654-IX “On Amendments to the Tax Code of Ukraine and some other laws of Ukraine on the peculiarities of taxation of business activities of e-residents” came into force.
The Ministry of Transformation reported that the testing of the project for government agencies will take place in the near future. And after the approval of all the necessary additional regulatory framework,foreign IT specialists will be able to become entrepreneurs in Ukraine and pay taxes to the state budget, and all this will happen online.
The launch of the e-residency project will provide foreigners with the opportunity in a few clicks
· to become an entrepreneur in Ukraine;
· manage your business remotely using modern technologies;
· sign documents with an electronic signature;
· remotely open and manage bank accounts;
· pay taxes on preferential terms.
According to the law, entrepreneurs with income in Ukraine cannot be e-residents. This means that e-Residents will only serve other foreigners. Citizens of Russia and "gray" or "black" FATF countries will not be able to become e-residents.
By order of the Ministry of Justice dated March 29, 2023 No. 1158/5 , changes were made to the requirements on filling out the approved forms of applications in the field of state registration of legal entities, individual entrepreneurs and public organizations (hereinafter referred to as the EDG) and posted in a new edition .
1. It is clarified that when writing the name of a legal entity in a foreign language, capital and small letters of the Latin alphabet will be used.
2. The name of a separate section must contain only the words "branch", "representative" and an indication of belonging to the legal entity that created the specified separate section. The words "separate section" are no longer mandatory.
3. approved application forms in the field of state registration decreased from 10 to 9 . Thus, the application form (Form 6) for confirming information about the ultimate beneficial owner is excluded from the list.
Information about the last beneficial owner of a legal entity is submitted and subsequently updated by all legal entities , except for political parties , their structural bodies, trade unions , their associations and organizations provided for by the charters of trade unions and their unions, creative unions and other local divisions, organizations, employers and their associations, bar associations, bureaus, organizations exercising professional self-government in the field of notaries, state bodies, local self-government bodies , their associations, public legal entities (legal entities created in the image) shares determined by the Cabinet of Ministers of Ukraine from the list of foreign stock exchanges (regulated markets), which is formed in accordance with the rules, taking into account the requirements for disclosure of information on the ultimate beneficial owners of PJSCs listed on at least one stock exchange (regulated market), which are equivalent to those adopted in the European Union), State and Public Enterprises , Enterprises, Organizations, Chambers of Commerce and Industry, State Pension Fund, Housing and construction cooperatives, Cottage ( cottage - construction ) cooperatives, Garden-garage (garage-building) cooperatives (societies), Associations of apartment owners (HOA), Non-profit organizations and agricultural cooperative organizations Associations of homeowners , agricultural cooperative associations , separate structural subdivisions with the status of a legal entity (with the exception of a separate subdivision of a foreign non-governmental organization) included in the register.
4. The content of the application forms has been partially changed, especially on the example of Form (2), the application pages are formed in the following order: page 1 (main), page 2 (statement of the legal entity, name), page 3 (statement of the head), page .4 (information about the founder/participant), page 5 (information about the ultimate beneficiary), page 6 (information about the termination of the legal entity, contact information), page 7 (information about the person who can act on behalf of the legal entity), p. 8 (information on succession), p. 9 (information on the choice of taxation system), p. 10 (information on entry into the register of non-profit organizations).
5. According to the Regulations on the state registration of legal entities, individual entrepreneurs and non-legal entities, public organizations, approved by order of the Ministry of Justice of Ukraine dated 09.02.2016 No. 359/5, copies of the document proving the identity and citizenship of the person who is the ultimate beneficial owner of the legal entity (document confirming citizenship) may be submitted without a notarized certificate.
6. Submission of applications in accordance with the forms approved by this Order regarding the choice of a simplified taxation system and / or voluntary registration as a VAT payer and / or inclusion in the Register of non-profit institutions and organizations during state registration of changes in information about a legal entity or individual entrepreneur contained in the Unified State Register by filling out the relevant pages of applications will be carried out from the date of placement of the relevant announcement on the website of the Ministry of Justice of Ukraine.
The updated application forms will be effective May 1, 2023.
On April 28, Law No. 2970-IX on the automatic exchange of information on financial accounts — the Common Reporting Standard (CRS) — entered into force.
As already noted in our previous article, news for March, the draft law provides for the collection and exchange of information regarding the accounts of residents of participating countries that have implemented such a standard within their national legislation. Information about such accounts is submitted by financial institutions to the competent authority of the participating country, which further sends information about the financial accounts to the jurisdictions in which the owners and controlling persons of the owners of the financial accounts are residents.
In Ukraine, which is joined the Multilateral Agreement on Automatic Exchange in August 2022 and, from now on, also implemented the standard by adopting the law, such a competent body is the State Tax Service of Ukraine.
Accordingly, starting from April 28, the main provisions of the law came into effect, in particular, the updated version of clause 44.3 of Article 44 of the Tax Code of Ukraine regarding the terms of storage of primary documents.
Therefore, in accordance with the new terms of storage of primary documentation, the following have been selected:
· 2555 days - for documents and information necessary for tax control;
· 1,825 days - for primary documents, accounting registers, financial statements, other documents related to the calculation and payment of taxes and fees, as well as legal entities that have chosen a simplified taxation system, with the exception of documents to which a longer term applies storage;
· 1,095 days - for other documents not covered by the requirements of the first two options;
· 1,095 days - for documents related to the fulfillment of the requirements of other legislation, the control of compliance of which is entrusted to the control bodies, including permit documents;
· In the case of liquidation of a taxpayer, documents for a period of activity of at least 1,825 days (2,555 days for documents and information necessary for the implementation of tax control of CIC and Transfer Pricing), which preceded the date of liquidation of the taxpayer, are transferred to the archive in accordance with the procedure established by law.
Among other things that will come into force later, you can highlight the following:
· International exchange of information on customer accounts, as well as provision of reports on accountable accounts, which will come into force on June 30, 2023;
· Liability for violation of requirements for identification of accountable accounts and submission of reports for automatic exchange of information on financial accounts, effective from January 1, 2024;
· Assigning to specially defined subjects of primary financial monitoring persons who provide services related to the creation, operation or management of trusts and other entities without the status of a legal entity, which will take effect on June 30, 2023.
On April 11, the Verkhovna Rada of Ukraine adopted the bill on exemption from tax on real estate, other than land, for Farmers, destroyed or damaged.
The draft law clarifies the exemption from the need to pay land fees, the minimum tax obligation and the single tax for agricultural land located in territories where hostilities are taking place or were taking place or temporarily occupied, and for lands that are in conservation or contaminated with explosive objects.
The draft law proposes to create a mechanism for providing benefits for property that is destructive or in need of major repairs based on data from the State Register of property damaged and destroyed as a result of hostilities, terrorist acts, acts of sabotage caused by armed aggression and the settlement of a mechanism for administering benefits from payments of a minimum tax liability and a unified group 4 tax for lands, for lands in conservation or littered with explosive objects through obtaining relevant data through the State Land Cadastre.
The draft also clarified that 30% of the land bank of producers who were payers of the fourth group before February 24, 2022 fall on the territories of military operations or occupied territories, then for them the limit volume of agricultural production will be reduced to 50% (this provision will apply and indicators for 2022).
In order to prevent abuse and the use of benefits defined by law, the Ministry of Agrarian Policy will initiate a separate procedure for monitoring the use of such land plots.
