News (#10 October 2019)

Draft

Parliament adopted draft law on lease of state-owned property

The Ukrainian Parliament has adopted Draft Law No. 1055-1 On the Lease of State and Municipal Property in its first reading.

According to the Draft, the commencement of leasing out of state and municipal property will be carried out by selling the right to lease state and municipal property at an electronic auction in an electronic trading system instead of via a tender procedure.

It also provides for the creation of two lists – the first type list (the list of objects, for which a decision on their commencement into lease is made through an auction procedure) and the second type list (this includes objects, for which a decision on their commencement into lease is made without any auction procedure).

 

Draft Law On Tax Amnesty published

Draft Law No. 1232 On the Use of Special Declarations for Violation of Tax and other Legislation by Individuals has been published.

According to the document, the special declaration is “the regime of exemption of taxpayers from legal liability for violation of tax legislation and other legislation, control over compliance with which is vested in the regulatory authorities, for any single or several tax periods until 31 December 2018 and including, subject to further payment of tax liabilities.”

The explanatory note states that the introduction of special declarations in Ukraine should lead to an increase in the revenue side of the state budget. The special declaration will not be applicable to revenue agents, income (assets) obtained by criminal means, through corruption or related legal offenses, and to income revealed by the tax authorities following a tax inspection by 1 January 2020.

To exercise the right to submit a special declaration, taxpayers will be required to file a special declaration between 1 January and 31 March  2020 and to pay tax liabilities for undisclosed income (assets):

-5% for currency valuables, movable and immovable property, securities, shares (participatory interest) in the property of legal entities, property rights to intellectual property and/or financial instruments;

-10% for any other property rights;

-2.5% for assets used to acquire Domestic Government Loan Bonds.

Moreover, before submitting a special declaration on funds, bank metals and other currency valuables, the taxpayer (declarant) should deposit such assets into bank accounts in financial institutions of Ukraine, and these must be held on such accounts for at least 365 calendar days following 31 March 2020.

Within 90 days following 31 March 2020, regulatory authorities may conduct expert appraisal of the assets declared in the special declaration.

The information received by the regulatory authorities following submission of the special declaration by payers is confidential and cannot be disclosed without the written consent of the declarant.

According to the Draft, income amounting to UAH 300 thousand will be deemed as confirmed without the filing of the special declaration and amnestied without any additional conditions. Payment of taxes on it is not required, and tax audits of this income sources will not be carried out.

 

Parliament upheld introduction of changes to ProZorro system

Parliament adopted in the first reading a Draft Law submitted by the Government, which provides for a new version of the Law On Public Procurement.

In particular, the government believes that adoption of this law will result in a fall in the number of cases of the ProZorro system’s circumvention when invitations are sent out for bidding.

The Draft  introduces the “simplified” procurement concept – the procurement of goods, works and services to the amount of UAH 50,000-200,000, which must be carried out through ProZorro.

It is emphasized that approximately 250 thousand procedures per year will be brought in from the cold. The draft law also proposes to allow businesses to amend errors in bidding documents within 24 hours.

 

Draft Law on opening up agro land market from 2020 made public

The Ministry of Economic Development, Trade and Agriculture of Ukraine has published the Draft Law On the Turnover of Agricultural Land for discussion.

According to the Draft, the current ban on the sale of agricultural land will be lifted from 1 October  2020.

The opportunity to buy land will be provided to Ukrainian individuals and legal entities, territorial communities and the state.

This right will not be granted to individuals and legal entities, foreign states that fall within the scope of the Law On Sanctions.

The Draft establishes the pre-emptive right of a tenant to purchase the land plot.

Concentration of land ownership is defined as 15% at the regional level and at 0.5% at the nationwide level.

Moreover, the Draft stipulates that the software of the State Register of Rights should provide for movement of information between the State Register of Rights to Real Estate, the State Land Cadastre, the United State Register of Legal Entities, Individual Entrepreneurs and Public Organizations.

Information exchange is required for obtaining information on the aggregate area of agricultural land owned by one person and related persons located within the same region and within the territory of Ukraine.

Agricultural lands held in state and communal ownership will be sold through an auction procedure. The opening sale price is the monetary value evaluated by regulations.

Moreover, the duty of the state registrar to enter information in the Register of Rights to Real Estate on the price (value) of ownership rights, including rights of enjoyment, has been established.

 

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