L&M Finance Group

Changes in legislation for January during martial law

New tax changes will come into effect from January 1 :

1. For individual entrepreneurs

· Group I - an annual limit of UAH 1,118,900 (167 minimum wages), UAH 268.4 (10% of the subsistence minimum) ;

· Group II – annual limit UAH 5,587,800 (834 minimum wages), UAH 1,340 (20% of the minimum wage);

· Group III – annual limit UAH 7,818,900 (1,167 minimum wages), unchanged 5% of income or 3% of income + VAT .

2. The minimum base for accruing ERUs is UAH 6,700, the maximum is UAH 100,500.

3. The ERUs in 2023 are as follows:

· minimum - 1474 UAH / month;

· maximum - 22110 UAH / month.

4. In the state budget for 2023, the minimum wage is set at the level of December 2022 - UAH 6,700 or UAH 40.46 per hour. The indicator will not be revised during the year.

5. The subsistence minimum also remained at the level of 2022:

· The general indicator is UAH 2,589 ;

· 2684 UAH - for efficient ;

· 2272 UAH - for children under 6 years old ;

· for children 6-18 years old - 2833 UAH ;

· for persons who have lost their ability to work - 2093 UAH.

CFC reporting. The first CFC report must be submitted to CFC controllers in 2023 by May 1, 2023 for the period of 2022 or in 2024 by May 1, 2024 for the period of 2022-2023. At the same time, you can report with the submission of an annual declaration of property and income (usually submitted before May 1) or a tax return for corporate income tax.

From January 1, the Ministry of Economy introduced the receipt of permits from the State Labor Service for the performance of high-risk work and the operation (use) of machines, mechanisms, and high-risk equipment (hereinafter referred to as the permit) in electronic form through the Electronic Services Portal of the Ministry of Economy. Such permits are signed exclusively by electronic digital signatures of the heads of the territorial bodies of the State Labor Service and contain QR codes with a link to the issued permit.

In addition, permits obtained electronically can also be canceled, reissued and renewed online.

Important! Online services for cancellation, reissuance and renewal of previously obtained permits in paper form require the provision of the original permit and will be carried out through the Administrative services Centre (TsNAP).

On January 3, the Law of Ukraine dated December 13, 2022 No. 2836-IX came into force regarding assistance in restoring the energy infrastructure of Ukraine.

According to the law, temporarily, for the period of martial law on the territory of Ukraine, but no longer than until May 01, 2023, operations and import duties imported by enterprises or citizens are exempted from VAT and express shipments to the customs territory of Ukraine in the customs regime of import of goods.

Among such goods, in particular, electric generating sets and parts for them; separate transformers, their parts, inverters, accumulators, including separators for them; systems for providing satellite Internet access (Starlink), etc., except for civil aviation goods. This exemption also applies to the import of certain goods carried out by public associations and / or charitable organizations included in the Register of Non-Profit Institutions and Organizations, for their subsequent free transfer to defenders.

Such goods must be handed over to the military no later than 45 calendar days from the date of completion of their customs clearance, and if such goods after the completion of their customs clearance were carried out on the territory of Ukraine, documented maintenance and / or repair - no later than 90 calendar days. In case of violation of the deadline or misuse of these goods, the taxpayer is obliged to pay the amount of value added tax and excise tax that should have been paid when importing such goods into the customs territory of Ukraine, as well as pay a penalty fee in accordance with the law.

In addition, this law amended Law No. 481, providing for:

● the right, for the period of martial law on the territory of Ukraine and within 30 days from the date of its termination or cancellation, to store by the business entity the fuel consumed for refueling the electric generator set in the amount of up to 2000 liters at each facility equipped with electric generator installations, without obtaining permits (documents of permits, licenses for the right to store fuel, the results of the provision of other administrative services);

● storage of fuel consumed for refueling a power generating set in the amount of more than 2,000 liters at each facility equipped with a power generating set is carried out by a business entity on the basis of a gratuitous submission to the territorial bodies of the central executive body implementing state tax policy, declarations on the production of economic activities for the storage of fuel.

From January 1, the following tax benefits will cease to apply:

· cinematography - the effect of the VAT exemption regime for the importation into the customs territory of Ukraine of certain goods used in the field of cinematography ends;

· space industry - the expiration of the regime of exemption from VAT taxation of operations for the importation into the customs territory of Ukraine by subjects of space activities of certain goods defined by the Customs Code of Ukraine, as well as exemption from taxation of operations for the supply of the results of research and development work in the customs territory of Ukraine, carried out for the needs of space activities;

· supply of software products – the VAT exemption for operations for the supply of software products ends;

· benefits that were temporarily, until January 1, 2023, provided to hotels and similar temporary accommodation facilities for VAT taxation of transactions for the supply of temporary accommodation (accommodation) services at a rate of 7%. (the specified benefit continues to be applied in accordance with subparagraph "c" of paragraph 193.1 of Article 193 of the Tax Code of Ukraine).

On January 12, a Law was passed to abolish the permission for the gambling business to stay on a simplified system, which was granted by the Law No. 2192-IX.

In accordance with the adopted Law No. 2192-IX dated April 14, 2022 it was allowed for the period of martial law to be on a simplified taxation system for business entities engaged in organizing and conducting gambling, lotteries (except for the distribution of lotteries), betting (bookmaker betting, totalizator betting).

The opportunity to switch to a simplified system led not only to simplified administration, but also to a significant reduction in taxation.

Remind that in the first part of p.p. 291.5.1. paragraph 291.5 of Art. 291 of the Tax Code of Ukraine states that business entities engaged in organizing, conducting gambling, lotteries (except for the distribution of lotteries), a pair (betting pair, totalizator pair) cannot be single tax payers;

The law on the abolition of benefits comes into force on January 20, 2023.