Since the Tax Code of Ukraine entered into force on 01 January 2011, a number of services with a place of supply in Ukraine (consulting, legal, accounting, engineering, IT, etc.) became VAT exempt.
Yet, only five month later, Ukrainian Parliament considered re-imposing VAT onto such services by amending the newly adopted Tax Code of Ukraine. This means that now the mentioned services with the place of supply in Ukraine become subject to VAT at 20%. In other words, this novelty triggers the supplies where clients of the mentioned services are Ukrainian residents.
Simultaneously and as a further measure to attain its goal of filling in the state treasury with additional revenues, Ukrainian Parliament introduced temporary export duties onto key crops (wheat, spelt, rye, barley and maize) that used to be the main export agriculture products for years. For example, wheat is levied with export duty at 9% per tonne, but not less than EUR 17 per tonne; barley is subject to 14% per tonne, but not less than EUR 23 per tonne. It is anticipated that the introduced temporary export duties start apply from 01 July 2011 and will be valid until 01 January 2012.
We note that since the beginning of the current year the crops exporters are already charged with a hidden export duty, which is levied via mandatory fees for the mandatory registration of export crops agreements at the state controlled Ukrainian Agrarian Exchange. That means that the discussed official introduction of the mentioned export duties is a de-facto additional export charges that without doubt influence the cost of crops exports from Ukraine.
Law: “The Law of Ukraine On Amendments to the Tax Code of Ukraine and On Export Duty Rates for Certain Crops” No. 3387 dated 19 May 2011; Order of the Ministry of Agriculture Policy of Ukraine “On Concluding and Registration of Foreign Economic Agreements at Agrarian Exchange” No. 5 dated 28 January 2011.