Law of Ukraine

"On Preventing Financial Catastrophe and Creating Prerequisites for Economic Growth in Ukraine"

Date of entry into force:
April 1, 2014

The Law introduces amendments to the Tax Code of Ukraine, the Code of Civil Protection of Ukraine, the Laws of Ukraine "On Contribution to Mandatory State Pension Insurance", "On Banks and Banking", "On the Prosecutor's Office", "On the General Structure and Strength of the Security Service of Ukraine", "On the General Structure and Strength of the Ministry of Internal Affairs of Ukraine", "On the General Structure and Strength of the Department of State Guard of Ukraine", "On State Support of Families with Children", "On Collection and Registration of the Single Contribution for Mandatory State Social Insurance", "On Social and Legal Protection of Military Servicemen and Their Family Members", "On the State Service of Special Communication and Information Protection of Ukraine", "On Militia", "On Education", "On the Main Principles of Social Protection of Veterans of Labor and Other Elderly Persons in Ukraine", "On Culture", "On Plant Protection", "On Museums and Museology", "On Libraries and Library Science", "On Mandatory State Social Insurance against Temporary Loss of Labor Capacity and Expenses Associated with Funeral Costs", "On Mandatory State Social Insurance against Workplace Injuries and Occupational Diseases that Caused Loss of Labor Capacity", "On Mandatory State Social Unemployment Insurance", "On Pension Benefits of Persons Dismissed from Military Service, and Certain Other Persons", "On Civil Service", "On Status of People's Deputy of Ukraine", "On Service in Bodies of Local Self-Government", "On Diplomatic Service", "On the Judicial System and Status of Judges", "On Mandatory State Pension Insurance", and the Fundamentals of the Legislation of Ukraine on Health Care.

The Law, in particular, envisages the following:
  • increase the rate of taxes and fees expressed in absolute terms (except EUR), by the consumer price index or the industrial producer price index; except the fee for specialized use of forest resources and the environmental tax for utilization of decommissioned vehicles;
  • establish a constant standard company income tax rate of 18% and value-added tax rate of 20%;
  • review the rate of fee for the use of subsurface resources for mineral extraction, complete the transition to percent-based rates, and consolidate groups of minerals as classified for the purposes of fees for the use of subsurface resources;
  • expand the circle of payers of fees for the use of subsurface sources that conduct business activity related to ground water extraction based on permits for specialized water use;
  • implement a norm to establish that fees for the use of subsurface resources for mineral extraction are paid by land owners and land users (except for business entities that are classified as farming entities according to the legislation), whether citizens of Ukraine, foreign nationals, or stateless persons, that extract fresh ground water with the use of electric equipment and in the amounts exceeding 13 cubic meters per person per month (measured by the water meter), on land plots that exceed the sizes provided for by Article 121 of the Land Code of Ukraine;
  • implement annual adjustment of the item taxed with fixed agricultural tax, with regard to the indexing coefficient determined as of January 1 of the tax (reporting) year;
  • expand the circle of payers of surcharge to the effective natural gas tariff by including: 1) business entities purchasing imported natural gas from non-residents of Ukraine, for own consumption as fuel or raw materials; and 2) oil and gas extracting companies that conduct business activity related to extraction of hydrocarbon raw materials, which use natural gas extracted in Ukraine as fuel or raw materials;
  • make all land categories eligible to the requirement, according to which the minimum lease rate for state- or municipal-owned land must be 3% or more of its nominal estimated value;
  • double the fee for the use of the radio frequency resource of Ukraine;
  • implement a single excise tax rate to diesel fuel (98 EUR per 1,000 kg), instead of differentiating the rate depending on the sulfur content (46 EUR to 98 EUR per 1,000), and implement taxation of alternative fuel;
  • double the excise rate for new cars and motorcycles, as well as automotive chasses;
  • determine specifics of value added tax levying on companies whose business is related to sale of grain and industrial crops;
  • implement a contribution for mandatory state pension insurance at the rate of 0.5%, on purchases of foreign currency by natural persons and legal entities, in cash and/or via bank transfer;
  • establish the individual income tax rate at 15(17%) for income in the form of pension benefits, if their amount exceeds UAH 10,000 (tax levied on the amount of excess);
  • apply the VAT, at the rate of 7%, to operations related to supply of medicinal products and medical devices (import and supply by manufacturer);
  • decrease the maximum untaxed value of goods sent in international mail from EUR 300 to EUR 150;
  • establish that the item taxed with real estate tax (except for land plots) is the total area of a residential real estate, instead of living area;
  • increase the excise tax rate for alcohol and tobacco products;
  • optimize the total manpower of law enforcement bodies (decrease the strength of the MIA by 79,400 persons; the Security Service of Ukraine, by 3,350 persons; the Department of State Guard of Ukraine, by 299 persons; the prosecutor's office, by 2,263 persons);
  • suspend the effect of the Law of Ukraine "On Civil Service" in the part pertaining to monetary bonuses granted to civil servants and employees of local self-government bodies for honorable continued service in the state authorities and for exemplary execution of duties, as well as the monetary bonus equal to 10 monthly salaries paid upon retirement following a minimum of 10 years of civil service;
  • suspend the effect of the Law of Ukraine "On the Judicial System and Status of Judges" in the part pertaining to retirement benefits equal to 10 monthly salaries granted to judges upon their retirement;
  • suspend the effect of the Law of Ukraine "On Prosecutor's Office" in the part pertaining to retirement benefits equal to one monthly salary for each full year of employment as a prosecutor, investigator of the prosecutor's office, or in research and educational facilities of the prosecutor's office, paid to prosecutors and investigators upon retirement;
  • improve targeted orientation of concessions for municipal service fees, transport fees, and solid fuel costs, by taking the income of citizens into consideration, and providing such concessions according to the procedure established by the Cabinet of Ministers of Ukraine;
  • unify the approach for determining new child allowance and child care allowance for children under three years of age, by combining these allowances, increasing the amount of first child allowance, and paying the combined allowance over the course of 36 months;
  • change the distribution ratio of the single contribution for mandatory state social insurance;
  • institute a pension of 70% of the effective monthly salary (wage) for which the single contribution for mandatory state social insurance was paid, for specific categories of persons;
  • suspend the effect of Article 42, part 2 of the Law of Ukraine "On Mandatory State Pension Insurance" for 2014 - 2015, in the part pertaining to adjustment of pensions to reflect the increase of average salary (wage) in Ukraine, taxed with social insurance contributions.
Внимание! Информация устарела из-за того, что этот раздел временно не обновляется!


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