Law changes in Ukraine designed to improve the investment climate

During this week, several bills and acts have been adopted, we are sure that these changes will suit the business and make Ukraine more attractive for foreign business.

For a start, President of Ukraine signs a Bill 6210, previously adopted by Verkhovna Rada of Ukraine. The Law provides a personal income tax rate of 9% instead of 18% for income in the form of dividends on shares and / or investment certificates, corporate rights accrued by non-residents, business entities that are not payers of income tax.

On April 13, 2017, the Resolution of the National Bank of Ukraine No. 33 was adopted, which allows the repatriation of dividends accrued not only for 2014-2015, as it was until now, but also for 2016, and simplified the mechanism for making such payments. One person (the issuer, the depositary institution or foreign investor) will be able to withdraw (repatriate) dividends for these years in a total amount of up to $ 5 million USD within one month.

In addition, National Bank increased the maximum amount of prepayment for import contracts, which does not require the use of a letter of credit form (with the confirmation of a first-class bank) from 1 to 5 million USD.

Should be noticed, that Verkhovna Rada of Ukraine registered a Bill 6336 which presupposes stimulating taxation conditions for enterprises in Donetsk and Lugansk regions. The Bill provides an exhaustive list of criteria for enterprises that have the right to be pay taxes in such conditions. Special conditions, in turn, suggest:

  • the income tax rate 0% for the first ten years, and the half of the base income (today 9%) for the next five years;
  • the possibility of an installment of VAT tax on the equipment, components and materials import operations for such enterprises purposes for a ten-year period.

The Bill also provides the right of local self-government bodies to establish preferences and reduce rates on:

  • real estate tax;
  • land tax;
  • rent cost for the state or municipal property land, the enterprise was established, for established entities.

Mykyta Torubka

Associate MG TAX