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Changes in transfer pricing

Published: 21/02/2018 | blog

Tags:

#Tax disputes #Tax reporting Transfer pricing

As we have noted earlier, numerous amendments to the tax legislation have been introduced by the Law of Ukraine No. 2245-VII “On Amendments to the Tax Code of Ukraine and certain legislative acts of Ukraine regarding ensuring the balanced budget income in 2018”. In this article, we want to highlight the changes that transfer pricing has undergone, namely the changes introduced by the above-mentioned Law in article 39 of the Tax Code of Ukraine. The first significant step has been the introduction of changes in the criteria that are applied by the Cabinet of Ministers of Ukraine in determining “low-tax” states (territories). If previously, one of such criteria has been the existence of a profit tax rate in the state (territory), which is 5 and more percentage points lower than in Ukraine (subparagraph 39.2.1.2, paragraph 39.2, article 39 of the TCU), but now, except for the low rate of income tax, those states (territories) “that provide economic entities with preferential taxation regimes or in which the features of calculating the tax base actually allow business entities not to pay corporate income tax (corporate tax) or pay it at the rate, which is 5 percentage...

European VAT on Provision of Electronic, Telecommunications Services, as well as Television and Radio Broadcasting Services

Published: 19/02/2018 | blog

Tags:

#Business #Export #Import #Legislation #Reforms #Tax planning #Taxation #VAT

The format and methods of delivery of many goods refer them to the category of services, especially if they are transmitted over the Internet, such as e-books, music downloads, streaming of content. The regime of VAT for this particular subcategory of services provided electronically has undergone significant changes lately. In this blog, we will consider the requirements of the current European legislation, and we will try to cover the coming changes in this area in the next ones. In accordance with the European legislation, came into effect from January 1, 2015, telecommunications, television and radio broadcasting, as well as electronic services, are subject to VAT at the location of the client, whether it is a business or a consumer, located in or outside the EU . However, in order to ensure the correct taxation of these services, the supplier needs to determine the status of his client (whether he is a VAT payer), as well as his location. The easiest and most reliable way to define whether a customer is a business or a consumer is to ask him for a VAT number. Suppliers can check the VAT numbers of their customers using the website of the VAT Information Exchange System...

New Supreme Court, the first “new” legal positions: What to expect and what to hope for?

Published: 31/01/2018 | blog

Tags:

#Court #Tax disputes #Ukraine

Despite all the advantages and disadvantages of the judicial reform that is taking place in Ukraine, the legal community and business nevertheless have placed certain hopes on the new Supreme Court and its focus on the rule of law, as well as on the fact that when considering cases and forming legal positions, it will take into account the practice of the European Court of Human Rights. Such hopes were not groundless, as Article 6 of the Code of Administrative Procedure of Ukraine indicates that “the Court applies the principle of the rule of law, taking into account the jurisprudence of the European Court of Human Rights” (other procedural codes contain similar provisions). Part 1 of Article 36 of the Law of Ukraine “On judicial system and status of judges” states: “The Supreme Court is the highest court in the judicial system of Ukraine, which ensures the constancy and unity of judicial practice in the order and manner prescribed by the procedural law”. It's no secret that there have been absolutely opposite positions of the courts for many years regarding the application of tax consequences in that case when a court verdict (or only the director’s explanations)...

European VAT On Providing Services

Published: 24/01/2018 | blog

Tags:

#Accounting #Business #Export #Import #Legislation #Tax planning #VAT

The companies which have customers in the European countries have to determine the state in which their income is subject to VAT and related consequences with respect to the indirect tax. The supply of “services” is defined as something that is not a “commodity”. Each supply of services should be analyzed in the light of the rules of the place of delivery in order to ensure the right accounting of VAT by the right person in the proper jurisdiction. It is especially important on making global sales that may lead to VAT obligations, and the rules of the place of delivery are the starting point for this. As in the case of goods, there are different rules for determining the place of delivery (as well as, accordingly, the place of their taxation) for the services provided to the business (B2B) and services to the end user (B2C). As a general rule, the provision of B2B services is taxed at the location of the client. In this case, the customer must provide the VAT number to the service provider, otherwise such a transaction is considered as B2C. If the client is a resident of a third country (not EU Member State) and does not have a European VAT number, he must provide...

Unblocking Tax Invoices: Will It Be the Same for Everyone?

Published: 17/01/2018 | blog

Tags:

#Tax disputes #Tax planning #Taxation #Ukraine

Before New Year, our legislators traditionally adopt and publish numerous changes in the tax legislation. The change from 2017 to 2018 was no exception. Thus, on December 7, 2017, the Law of Ukraine No.2245-VII “On Amending the Tax Code of Ukraine and Certain Legislative Acts of Ukraine on Ensuring the Balance of Budget Revenue in 2018” was adopted and officially published on December 30, 2017 (newspaper “Golos Ukrainy” No.248 (6753) dated December 30, 2017). The Law provides for the numerous changes in the tax legislation. The most expected change for business, perhaps, was the abolition of the “blocking” of tax invoices from January 1, 2018, at least until March 1, 2018. It became possible in connection with the exclusion of clause 74.2, article 74, of the Tax Code of Ukraine, which provided for the continuous automated monitoring of tax invoices and adjustment calculations for compliance with the criteria for the risk assessment sufficient to stop the registration of such tax invoices/adjustment calculations. In addition, paragraph 201.16 Art. 201 of the Tax Code of Ukraine has also been amended, according to which (new edition) “registration of a tax...

Rules for Choosing the Place of Taxation On Selling Goods

Published: 10/01/2018 | blog

Tags:

#VAT

The next issue, which we suggest to figure out during the consideration of the European VAT system, is the place of taxation on delivering goods. This issue is decisive for the companies that have a large number of counterparties in Europe, when planning their trading activities. The EU Directive 2006/112 /EU defines different rules for determining the place of taxation for each type of transactions: supply of goods intra-Community acquisition of goods importation of goods supply of services For the supply of goods, VAT is levied at the place of delivery depending both on the way of supply and the nature of the goods themselves: If the goods are not sent or transported, the place of taxation will be the location of the goods at the time of delivery. For example, if an Austrian company after renting a car in Austria from a German company decides to purchase this machine, Austria will be the place of delivery, and VAT will apply in Austria. If the goods are dispatched/transported by the supplier, the customer or a third person, the place of delivery (and accordingly the taxation) will be the country where the goods were at the beginning of the...

Legal Regulation of ICO in Different Countries

Published: 28/12/2017 | blog

Tags:

#Blockchain #Cryptocurrency #ICO

Earlier in our articles, we have already considered what Initial Coin Offering is. However, we remind that the Initial Coin Offering (ICO) is a popular method among start-ups and other companies to raise capital. Investors participate in the collection of financial resources by transferring funds to the issuer in official currencies such as dollar, euro, yuan, etc. or in cryptocurrencies, for example, Bitcoins or Ethers, in exchange for digital tokens (Tokens, electronic coins). It is Tokens that confirm the rights of the holder to receive profit or the fulfillment of obligations on the part of the issuer. In addition, Tokens can be used to pay for services/goods of the issuing company. In contrast to the initial public offering (IPO), usually Tokens do not represent an ownership interest or receipt of dividends from the issuing company. Investors who participate in the ICO often expect to profit from the development of the activities of the company in the future, or play at increasing the value of Tokens (probably the brightest example at the moment is the rise in the price of Bitcoin). Like all cryptocurrencies, Tokens are based on Blockchain (distributed ledger technology,...

Single Judicial Information and Telecommunication System (SJITS) within the Framework of the Code of Administrative Court Procedure

Published: 26/12/2017 | blog

Tags:

#Tax disputes #Taxation #Taxes #Ukraine

It’s not a secret for anyone that in order to protect your rights and protected interests, in the event of a tax dispute, taxpayers apply to the district administrative courts. Since December 15, 2017, the procedure of appeal and the consideration procedure in the district administrative courts has changed significantly, in connection with the entry into force of the new edition of the Code of Administrative Court Procedure of Ukraine. The number of novels that appeared in the new edition of the Code is quite significant. In this article, I would like to provide an overview of such an innovation in administrative procedure as the Single Judicial Information and Telecommunication System. Article 18 of the Code of Administrative Court Procedure of Ukraine defines the tasks that are imposed on the Single Judicial Information and Telecommunication System (hereinafter - the System): registration of documents entering the court (which may be the subject of litigation); determination of the judge(s) for the consideration of the case; exchange of documents (sending and receiving documents) in electronic form between the courts, between the court and the participants to the...

Obtaining Licenses by Companies Working with Cryptocurrencies on the Isle of Man

Published: 20/12/2017 | blog

The Isle of Man shows considerable activity with respect to cryptocurrencies: everyone is interested in digital currencies and is discussing what benefits they can bring to the island. So, the government of the Isle of Man shows that it is entirely open to such a novelty and even offers the opportunity for residents to pay taxes using Bitcoins. The Commission on Financial Supervision of the Isle of Man reacted very quickly to the revitalization of the sphere and brought promptly the rules for preventing the laundering of funds obtained by criminal means in line with the development of the industry. Thus, the government shows its desire not to burden this developing sphere with regulation. In 2015, the amendments were made to the legislation of the Isle of Man, according to which the Financial Services Commission (hereinafter referred to as the Commission) should monitor the compliance of laundering laws by the companies that operate in the field of cryptocurrencies. On October 26, 2015, the amendments to the Companies Act, which carry out certain types of activities (registration and supervision issues) (The Designated Businesses (Registration and Oversight) Act 2015) came into...

Why is the EU VAT System Necessary and How it Works

Published: 18/12/2017 | blog

Данным блогом мы начинаем серию публикаций, посвященных европейскому НДС, который так интересует наших клиентов. Неудивительно, ведь он имеет большое значение для ведения бизнеса в ЕС. Поскольку тема очень обширная, обсуждать ее будем поэтапно. И начнем мы с рассмотрения сути и назначения системы НДС, а также общих понятий и правил. On posting this blog, we are starting a series of publications on the topic of the EU VAT which is so interesting for our customers. It is not surprising, as it is important for doing business in the EU. As the topic is very extensive, we will discuss it step by step. Let’s start with considering the essence and purpose of the VAT system, as well as the general concepts and rules. The idea of the European VAT is that enterprises could trade within the EU without being registered as a VAT payer in each individual union country. The rules of the EU VAT are quite...

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