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“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.


New Year Means New Laws. What Will Change When The Clock Strikes 12?


Dmytro Shemelin, Lawyer at Ilyashev & Partners Law Firm
Source: The Focus

After New Year’s Eve people will see significant reduction of the amount of unified social tax (to 16%) with concurrent increase of the income tax rate (up to 15 and 20%). These novelties are expected to bring the salaries out from the “shaded area”. Let’s hope that this attempt will not repeat the fate of all previous strategies of cleansing the economy.

Property tax: apartments with area of more than 60 sq.m. and houses with area of more than 120 sq.m. will be taxed at the rate established by the local authorities, in the amount not exceeding USD 24.00. for 1 sq.m. Thus the cost of apartments (and its location) is not taken into account.

 Newly built posh penthouse in the central district of Pechersk and “Khrushchev-era” apartment of the same area in Troyeshchyna (Kyiv’s dormitory suburb) will be subject to taxation under the same rate. It is hardly necessary here to perceive an attempt to put pressure onto the poor and pensioners, who “outstayed” their time in old large-area apartments.

 Automobiles with period of exploitation under the 5 years and a diesel engine with volume of over 2500 cubic cm. or gasoline engine over 3000 cubic cm. shall be subject to annual wealth tax: cars to an annual “luxury tax” of UAH 25 000.00. Apparently, the Government perceives luxury in somewhat archaic manner, like a huge jeep with a gigantic “motor”. It is delightful that such modest cars like Range Rover Sport, Maserati Quattroporte and Porsche Panamera will not be subject to luxury tax.

 Of no joy is the increase of tax levied onto purchase of foreign currency in cash up to 2%. Non-cash transactions will not be subject to foreign currency taxation, which should obviously encourage people to deposit their foreign currency savings at the banks.

National “military” tax charged onto salaries had been introduced, as widely known, until January 01, 2015. However, since neither the end of the ATO, nor significant improvement of financial condition of the state should be expected in soon, further collection of the said tax is extended further-up to the end of 2016.

Threshold of taxation of pensions has also been reduced: now pensioners who receive pensions in the amount exceeding the amount of three minimum wages (UAH 3 654.00, or EUR 190.00 compared with  previously taxed amount of UAH 10 000.00) will have to settle the profit tax. At the same time the Government noted that there is nothing wrong here since there are “only” 90 thousand of these wealthy retirees in our country. It is unclear whether this is good news in itself or bad.

Now a bit of good news

Those who will have enough money to pay for the Internet will be probably able to enjoy 3G as early as next year: the budget for 2015 includes revenues in the amount of six billion hryvnias from sale of licenses. Given how urgently the Treasury requires the money now, it can be predicted that this time the sale of 3G is likely to most probably occur.

There will be no universal declaration of assets, filing “zero declarations” and other similar things: corruptionists (and ordinary citizens) may make a sigh of relief.

The State Migration Service announced that starting from January 01 the procedure for issuing biometric passports will start. However, it is unclear when exactly it will be possible to file applications for new passports and when they will actually be issued.

The minimum amount of pension for the families who lost supporter-serviceman will be raised commencing from January 01, 2015 (up to two subsistence minimum amounts). Thus, family members of soldiers killed in the ATO will receive little more money from the State.

The Fiscal Service has eased up its grip: it will be required to get registered as VAT-payer only if the amount of your taxable transactions annually will exceed one million hryvnias. Previously (including today) this threshold was at a much lower level (UAH 300 000.00).

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