New Law regarding transfer pricing to come into force

On July 4, 2013 the Law “On Amendments to the Tax Code of Ukraine Regarding Transfer Pricing” No. 408-VII was adopted by the Verkhovna Rada of Ukraine.  The Law was signed by the President of Ukraine.  The aforementioned Law was published at “Holos Ukraiiny” on August 7, 2013.  The Law comes into effect as of September 1, 2013.

Financial treasury bills

The Law of Ukraine “On Amendments to the Tax Code of Ukraine and Some Other Laws of Ukraine Regarding Financial Treasury Bills” No. 407-VII dated July 4, 2013 was signed by the President of Ukraine.  The Law entered into force as of August 3, 2013.

The Law foresees the possibility of restructuring budget debt, which has arisen as of January 1, 2013, through the issuance of financial treasury bills with a five-year circulation period and a 5% yield.  Taxpayers are authorized to claim financial treasury bills with a five-year circulation period and a 5% yield with respect to VAT refunds.

Environmental tax on disposal of discontinued operation vehicles

The controversial Law of Ukraine “On Amendments to the Tax Code of Ukraine Regarding Environmental Tax on Disposal of Discontinued Operation Vehicles” No. 422-VII dated July 4, 2013 was adopted by the Verkhovna Rada of Ukraine.  Despite significant criticism from the business community and the public the Law, was signed by the President of Ukraine on July 30, 2013.

It is anticipated that Law No. 422-VII will become effective starting from September 1, 2013.

The Law is expected to expand the tax base regarding environmental tax, providing for the collection of tax on disposals of discontinued operation vehicles: cars, trucks, cars, buses and special purpose vehicles.

Payers of environmental tax on disposals of discontinued operation vehicles are determined to be those who:

  • carry out import of vehicles and car bodies to the customs territory of Ukraine;
  • carry out production (manufacturing) of vehicles in Ukraine for sale in the domestic market of Ukraine;
  • acquire vehicles from persons who do not pay the environmental tax under the Tax Code of Ukraine.

The amount of the environmental tax that is subject to payment with respect to a particular vehicle is calculated based on the rates and ratios for each type of vehicle, engine size, model year, weight and other characteristics.