Indirect tax changes

 PwC, Kyiv, Ukraine, 
Friday, August 1, 2014

The Parliament of Ukraine passed a law introducing changes to the Tax Code. Under the edition of the Law* currently available on the Verkhovna Rada website, the key changes on indirect taxes are the following:

• The threshold for mandatory VAT registration is raised to UAH 1,000,000.

• VAT base upon taxable supplies should not be lower than the purchase price of goods/services and balance value of fixed assets.

• Special electronic VAT accounts are introduced.

• All VAT invoices should be issued in electronic form and registered in the Unified Register of Tax Invoices.

• The criteria for automatic VAT refund are changed.

• Reverse-charge VAT can be credited in the same month.

• Temporary VAT exemption for grain trade is extended until the end of 2014.

• Excise on tobacco products will increase by approximately 5% starting from 1 September 2014.

The Law* comes into force on the day following the day of its publication. The VAT provisions listed above (with the exception of

grain transactions) should become effective starting from1 November 2014.

We will continue the analyses of this legislative act and provide more detail on the issue.

*The Draft Law # 4309a dated 21 July 2014