Tax Law (Ukraine)

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The foundation of the Ukrainian tax law are the Value Added Tax Act , the Profit Tax Act and the Income Tax Act . A general tax code, which is to combine all tax laws and regulations in a uniform system, is currently being drawn up.

historical development

With the independence of Ukraine in 1991, the need for its own tax system arose . The “Law on the Taxation System” №1251-XII, passed on June 25, 1991, included radical reforms based on the taxation systems of developed Western countries.

The newly created tax system was hardly oriented towards the special conditions of the transition period. The focus was on the fiscal function (generating the necessary financial resources). The regulating and stimulating function of tax legislation has not been sufficiently taken into account. As a result, the number of loss-making companies increased rapidly, unemployment rose and with it the socio-economic problems in the country.

The law was supplemented and modified repeatedly in 1992 and 1993, and a completely new version was finally passed in 1994. In the new version, the structural fundamentals of the tax system, the types of tax , levies and fees, their crediting and usage procedures, as well as taxpayers , taxable objects and liability for violations of tax law have been defined.

A revised version of the law that was passed in 1997 is now in force. The law includes all taxes and duties to be paid in Ukraine . The crediting and payment procedures for the various types of taxes and duties are regulated by 28 other laws (especially the three mentioned above).

Innovations 2009

In response to the financial crisis, the Ukrainian parliament announced a series of tax breaks . Among other things, the sales tax exemption and profit tax relief for publishers will be extended to 2015 (previously limited to 2009) and the fee for the purchase of foreign currency will be reduced from 0.5% to 0.2%.

In addition, Parliament decided to increase the transport tax. Accordingly, on January 10, 2009, the tax on vehicles older than 8 years and on vehicles with a displacement of more than 2.2 liters was increased significantly.

A special tariff of 13% was introduced on the import of cars and systems and machines. By contrast, the export duty on a number of goods was reduced by up to 5% .

Tax types

According to current legislation, there are currently 20 state and 14 local taxes and fees in Ukraine. The most important can be found in the following overview:

State tax types

Sales tax ( value added tax ) The standard tax rate is 20%. When exporting goods and accompanying services, the sales tax rate is 0% (Art. 6.1, 6.2 of the VAT Act). A general reduced sales tax rate, e.g. B. on food does not exist. However, there are a number of specified goods that are not subject to sales tax.
Income tax or wage tax The income tax rate is a flat 15% (before December 31, 2006 13%). Companies are obliged to withhold income tax and pay it to the tax office when paying their salaries. If an employee spends less than 183 days a year in Ukraine, the limited income tax liability applies at a tax rate of 15% (before December 31, 2006 13%). Due to the German-Ukrainian double taxation agreement , no Ukrainian tax is due for stays of less than 182 days, provided the salary is paid in Germany.
Social security taxes Social security contributions and taxes are calculated on wages and salaries. Most of these have to be borne by the employer. This includes:
  • Payments to the pension insurance - 33.2% (employer's share), 2% (employee's share)
  • Payments to the local social security fund - 1.4% employer's share (before January 13, 2009 1.5%); 1% share of employees
  • Payments to the local unemployment insurance fund - 1.6% employer's contribution (before January 13, 2009 1.3%); 0.6% share of employees (before January 13, 2009 0.5%)
  • Payments to the Accident Insurance Fund - In addition to the payments to the funds listed so far, all companies must also make payments for the industrial accident insurance . For most activities, the contribution rate is between 0.56% and 6.52%. For example, the rate for trading companies is 0.8% and for transport and forwarding companies it is 1.66%.
Profit tax Ukrainian and foreign companies are subject to profit tax. Profit is defined as the difference between income and expenditure. The tax rate is a uniform 25%.
Excise duty ( excise ) Excise taxes are levied on both imported and Ukrainian-made alcoholic beverages, tobacco products, vehicles, gasoline and diesel fuels. The rate of excise duty varies depending on the specific goods and is set annually in a special law. The amount and the alcohol content of a product serve as a basis for assessment.

The taxation procedure is regulated in the Law on Excise Duty and Import Duty on Certain Goods of July 11, 1996, the Law on Consumption Tax on Alcoholic Beverages and Tobacco Products of September 15, 1995 and in the Government Ordinance on Excise Duty of December 26, 1992.

Property tax (real estate tax ) Property tax is paid monthly by owners. Tax rates vary depending on the type and location of the property. It also plays a role whether an estimate of the property value has been carried out. Without such an estimate, the tax rate is generally higher.

The municipalities are entitled to change the tax rates (except for agricultural land). However, the tax rates may be doubled at most. The property tax is regulated in the Law on Payment for Land Use of March 7, 1992.

inch The new Customs Code regulates 14 different customs procedures for import, re-import, export, re-export, transit, temporary import, temporary export, for customs storage, duty-free shops, processing within the Ukrainian customs territory, processing outside the Ukrainian customs territory, destruction and for the Sale in favor of the state.

The import and export duty is determined as a percentage of the customs value of the goods or as a fixed amount for the respective unit of goods. The current legal basis is the Customs Code of July 11, 2002, which came into force on January 1, 2004, the Laws on the Uniform Customs Tariff of February 5, 1992 and the Customs Tariff of Ukraine of April 5, 2001.

Local taxes and duties

Local tax Local tax is payable by legal entities (except farms) and public authorities and institutions. The municipal tax may not exceed 10% of the annual wages paid to the employees working in the respective company. The specific amount of the local tax is determined by the local self-government bodies. The law only sets an upper limit.

Local taxes are governed by the Decree of the Cabinet of Ministers on Local Taxes and Duties of May 20, 1993.

Other taxes Other local taxes and duties include advertising tax, hotel fee, gaming tax, market fee and parking fee.

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