Author: Lyubov Ignatova, Alexandra Yulina, Anton Prosviriakov

Lawyers of LF «Dmitrieva & Partners» Lyubov Ignatova, Alexandra Yulina, Anton Prosviriakov have prepared the list of the main legal news for business.

Among the main news:

The NBU canceled the issue to entrepreneurs of the certificates on declaration of currency values

On 21st July 2017 the amendments provided by order of the Ministry of Finance of Ukraine no. 524 of May 24, 2017 came into force, according to which the changes in order of December 25, 1995 no. 207 "On approval of the form of the Declaration of currency values, income and property belonging to a resident of Ukraine and are outside of it" were introduced...

Limitations with respect to early repayment of credits and loans in foreign currency, received by residents from non-residents have been mitigated

From July 11 the NBU extended the existing exceptions of early repayment of credits obtained from non-residents. From now on, the bank is allowed to repay the mentioned credits ahead of time,this also applies to resident borrowers if the non-resident creditor is a bank. As regards businessrepresentatives, they may repay such credits ahead of time only if the shareholder of such a borrower or non-resident creditor is an international financial organization. 

Regarding the peculiarities of conduct of operations on the basis of individual licenses in electronic form, which issued to individuals by the NBU 

By its letter dated 13.07.2017 no. 40-0005/48633 the NBU has provided clarification as regards peculiarities of the application of certain requirements of the Regulation on Functioning of the Automated Information System of the NBU "The Register of Individual Licenses for Carrying out Competing in intelligence Currency Transactions by Individuals" and conduct of operations on the basis of individual licenses in electronic form, which are issued to individuals. 

As regards the income received in foreign currency

The SFS of Ukraine considered the application and provided the individual tax advice regarding the income received in foreign currency (letter of 21.07.2017 no. 1301/Р/99-99-13-01-02-14/IPC). 

Regarding the taxation of the permanent representation of a non-resident 

In its letter dated 11.07.2017 no. 1123/6/99-99-15-02-02-15/IPK the SFS of Ukraine provided the individual tax advice regarding certain issues of taxation of the permanent representative office of a non-resident. 

The NBU introduces a risk-oriented approach when carrying out the supervision in the sphere of financial monitoring 

According to the NBU resolution no. 66 of 24th July 2017 "On the Approval of Amendments to the Regulations on the Order of Organization and Conduct of Inspections on Prevention and Counteraction to Legalization  (Laundering) of proceeds from Crime, Terrorist Financing and the Financing of Proliferation of Weapons of Mass Destruction" the NBU introduces a riskoriented approach when planning and conducting inspections for the purpose of the increase of the efficiency of compliance by banks and nonbank financial institutions – residents, which are payment organizations, members or participants of payment systems, with the legislation in the sphere of financial monitoring. 

The NBU amended the Regulation on the Order of Analyzing and Checking by 

Banks of Documents (Information) on Financial Transactions and their Participants By Resolution no. 67 of July 24, 2017 the NBU amended the Regulation on the Order of  Analyzing and Checking by Banks of Documents (Information) on Financial Transactions and their Participants. 

About failure to submit transfer pricing documentation 
In its letter dated 20.07.2017 no. 19084/7/99-99-14-01-02-17 the SFS warns that failure by the taxpayer to submit the report (adjustment report) on controlled operations and/or transfer pricing documentation or failure to include in such report of information on all controlled operations carried out during the reporting period entails the imposition of the penalty (penalties).

About the use of seals by business entities 

On 19.07.2017  the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine on the Use of Seals by Legal Entities and Individuals-Entrepreneurs" came into force (hereinafter - the "Law").

Regarding the legality of carrying out business activity by a non-governmental organization included in the Register of Non-Profit Institutions and Organizations 

In accordance with cl. 26 of art. 1 of the Law of Ukraine of 14.10.2014 no. 1702-VII "On the Prevention and Counteraction to Legalization (Laundering) of the Proceeds from Crime, Terrorist Financing and Financing of the Proliferation of Weapons of Mass Destruction" non-profit organizations - legal entities (except for state bodies, state administration bodies and institutions of state and communal property), which are not financial institutions, created for carrying out scientific, educational, cultural, recreational, environmental, religious, charitable, social, political and other activities for the purpose of the satisfaction of citizens’ needs and interests within the limits established by the legislation of Ukraine, without the purpose of profit receipt. 

Regarding the taxation of payments to a non-resident when acquiring corporate rights of a resident 

Income received by a non-resident from the source of their origin in Ukraine shall be taxed in the manner and at rates provided by the Tax Code of Ukraine (hereinafter - the Code). Income includes, in particular, the proceeds from transactions of sale or other alienation of securities, derivatives or other corporate rights, determined in accordance with the provisions of the Code. 

As regards the taxation of dividends, which are directed to the increase of an authorized capital 

The Tax Code of Ukraine specifies the list of profits which are not included in the total monthly (annual) taxable income of a taxpayer. The total monthly (annual) taxable income of a taxpayer does not include dividends which are accrued in favor of the taxpayer in the form of shares issued by a legal entity - resident which accrue such dividends, provided that such an accrual does not in any way change proportions (shares) of membership of all shareholders (owners) in the authorized fund of the issuer and as a result of which the issuer's authorized fund increases by the total nominal value of the accrued dividends.

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