United States: Kyiv Tax Newsletter - April 13, 2017

Last Updated: April 24 2017
Article by Igor Davydenko and Tetiana Gryn

Personal income tax on inheritance

On 23 March 2017, the President of Ukraine signed the Law of Ukraine "On Amendments to the Tax Code of Ukraine Concerning the Taxation of Inheritance" (hereinafter – the Law on inheritance tax), which simplifies the settlement of heritage for the immediate family of the testator. The draft law was adopted by the Parliament on 23 February 2017.

The Law exempts from personal income tax (hereinafter PIT) the cost of the inheritance obtained by family members of extended relatives – brothers and sisters, grandparents on maternal and paternal sides, grandchildren. Before the amendments were introduced, the Tax Code provided exemption from PIT income of testator's family members only for immediate relatives – parents, spouse, children, including adopted children.

Heritage of heirs of immediate and extended family members as well as objects granted to the taxpayer as a gift, which are taxed at a zero PIT rate, are exempt from the necessity to evaluate the inherited objects of heritage for tax purposes.

The law comes into force on the day following the day of its publication and is applied to income from inheritance / gifts starting from 1 January 2017.

VAT applicable to agricultural enterprises

On 23 March 2017 the Parliament adopted the Law "On Amendments to the Tax Code of Ukraine on the Protection of Domestic Agricultural Producers" (hereinafter – the Law on amendments to the Tax Code).

Since the special VAT regime for agricultural enterprises and agricultural producers has been canceled as of 1 January 2017, the agricultural enterprises and agricultural producers faced a number of problems with the transition to a common system of taxation. A significant number of agricultural enterprises have failed to properly use the legitimate right for preferential VAT regime for the period 2016. The main reason for these problems was that the State Treasury Service of Ukraine blocked the appropriate accounts. The Law introduces amendments to the Tax Code of Ukraine that enable to include the funds to which agricultural producers are legally entitled in the formula for the registration of tax invoices in the Unified Register of Tax Invoices.

The law comes into force on the day following the day of its publication.

The amendments to the Tax Code regarding taxpayers located in temporarily occupied territory

On 23 March 2017 the Parliament adopted the Law "On Amendments to the Tax Code of Ukraine Concerning the Clarification of Certain Provisions and Elimination of Contradictions Arising with the Adoption of the Law of Ukraine 'On Amendments to the Tax Code of Ukraine on Improving the Investment Climate in Ukraine'."

The provisions of the law apply to taxpayers who, as of 14 April 2014, had a temporary location on the occupied territories. The Law cancels the exemption from liability established by the Tax Code of Ukraine. The law prohibits the repayment of accrued and paid amounts of real estate tax and the amounts of the land tax and some other changes during the period of conducting of antiterrorist operation.

The Law establishes that the taxpayers located on the territory of the settlements situated on the line of contact are not subject to the requirements as to the prohibition to order excise marks for the purposes of labelling alcoholic beverages and tobacco products manufactured on that territory. The Law prohibits returning the immovable property tax amounts accrued and paid during the period of the antiterrorist operation, as well as the land fee amounts and some other amendments.

The law comes into force on the day following the day of its publication and applies to tax periods starting from 1 January 2017.

The Supreme Administrative Court of Ukraine has summarized the practice of the application of the Customs Code of Ukraine

On 13 March 2017 the Supreme Administrative Court of Ukraine (SACU) adopted a resolution which has summarized the practice of application of the Customs Code adopted as of March 13, 2012 by the administrative courts of Ukraine.

The court, inter alia, has made the following conclusions:

  • Contradictions in the information on the conditions of payment for goods discovered in the documents attached to the customs declaration for the confirmation of the customs clearance of goods should not serve as sufficient grounds for requesting any additional documents from the declarant.
  • Cost calculation of the manufacturer should serve as sufficient and appropriate evidence for the confirmation of the declared customs value of goods.
  • The absence of the reference to the requisites of the foreign trade agreement in the invoice should not serve in isolation as the basis for the conclusions of the inability to identify the validity of the invoice for the supply of goods, provided that such identification can be made on the basis of other documents attached for the confirmation of clearing the goods through customs.
  • The courts have a right to adopt a way of protecting the rights of the declarant as obligation of the customs authorities to perform the customs clearance of goods based on the customs value declared by the declarant.
  • A claim for the return of overpaid customs duties arises only after the cancellation of the decision on the adjustment of customs value, according to which this overpayment has occurred, and so on.

All other conclusions can be found in the annex to the resolution № 2, dated13.03.2017.

The clarification letters

On 24 January 2017 the State Fiscal Service of Ukraine (hereinafter - the SFSU) has clarified the issue to perform costs adjustments for the state health insurance. According to SFSU, a taxpayer is required to increase the financial result before the taxation at the amount of prepaid payments, fees, premiums with application of the financial penalty at the rate of 120 percent of the interest rate of the National Bank of Ukraine, valid at the end of the period during which the dissolution of the contract occurred, provided that such agreement has failed to meet the requirements established by this Code. This position is rather vague and fiscal and does not correspond to the basic provisions of the Tax Code of Ukraine; therefore, there are reasons to challenge this position.

On 13 February 2017 the SFSU clarified the issue of the payment of advance corporate income tax during the payment of dividends, in particular, in case when the amount of the dividends does not exceed the value of the taxable object of the company for the relevant tax (reporting) year, for which the dividends are paid, provided that the monetary obligation for such period has been paid off, in this case the advance corporate income tax should neither be charged for nor paid by the company during dividends distribution.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
24 Oct 2017, Seminar, Washington, DC, United States

The Dentons Forum for Women Executives invites you to join us for a luncheon featuring guest speaker Liza Mundy, journalist and author. Ms. Mundy recently released her latest book, Code Girls, the riveting untold story of more than 10,000 spirited young American women who cracked German and Japanese codes to help win World War II.

27 Oct 2017, Seminar, New York, United States

Please join us for a milestone event, our 10th annual CLE Seminar for In-House Counsel.

1 Nov 2017, Seminar, Washington, DC, United States

Celebrate the 58th anniversary of Dentons' Government Contracts practice

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.