On 30 November 2016 the President of Ukraine signed Law of Ukraine "On Amendments to Certain Laws of Ukraine on Elimination of Administrative Barriers to Export of Services" No. 1724-VIII (the "Law") that aims to simplify regulatory requirements related to export of services.
Currently Ukrainian businesses that render services to their foreign clients are facing a number of obsolete administrative barriers and regulatory restrictions, including currency control requirements. The Law is targeted to remove some of such burdensome barriers and to facilitate international trade (especially in the IT sector).
Specifically, the Law establishes the following:
- The parties to a cross-border contract will be able to conclude it in the electronic form. Although the Law does not elaborate on peculiarities of the electronic form of a contract, it seems to imply that such contract is be concluded with due account for formalities of the so-called electronic document signed by an electronic signature, so that it may be acceptable for the accounting and tax purposes. The Law also stipulates that a cross-border contract on the export of services (except for the transportation services) may be concluded, for instance, via accepting public offers, exchanging e-mails, or issuing invoices.
- The export of services and IP rights (save for transportation and insurance services) will no longer be subject to currency control rule under which the payment is to be received by a Ukrainian exporter within 120 days. Hence, the fines for a breach of this rule will not be applied and the extension of the mentioned deadline will no longer require an approval of the Ministry of Economic Development and Trade of Ukraine.
- If documents (e.g., contracts, invoices) are available in English, Ukrainian banks acting as currency control agents will be prohibited to request businesses to provide their Ukrainian translation.
- Invoices may be prepared in the electronic form as well.
The Law was published today. It will enter into force tomorrow (i.e., on 3 December 2016). Still, the abovementioned changes will be effective after a month upon the Law enters into force. Therefore, Ukrainian state and regulatory authorities will have some time to align their regulations with the newly adopted changes.
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.