Extension of deadlines
The deadlines for submitting the annual tax return on property status and income (for 2019) for citizens and individuals engaged in independent professional activities have been extended from May 1, 2020 to July 1, 2020. The amount of tax liability must be paid by October 1, 2020.
The dates of discharge of the tax anticipation bill by manufacturers or importers of jet fuel, which fall in the period from March 1 to May 31, 2020, have been extended until August 15, 2020 (inclusive).
Deferral of payments
The laws adopted by Ukrainian Parliament and aimed at overcoming the negative consequences of COVID-19 do not provide a special procedure for such a measure and a possibility of providing instalments (deferrals) in electronic form. However, amendments were made to the definition of force majeure circumstances, which now includes the quarantine imposed by the Government. This circumstance may be a reason for the deferrals of tax liabilities or tax debt of the payer, if this circumstance objectively makes it impossible to fulfil the obligations stipulated by the terms of the contract (agreement, etc.), obligations under law and other regulatory legal acts, and this fact will be confirmed by a certificate of force majeure circumstances issued by the Chamber of Commerce.
Remitting penalties and interest
Penalties are suspended for the violation of tax legislation committed from March 1 to May 31, 2020. This exemption will not affect the rules for calculating, declaring, paying VAT, excise tax and rent, as well as violations in the area of accounting, production and circulation of fuel or ethylic alcohol in excise warehouses, which is applied on a general basis, alienation of property in the tax lien without the consent of the controlling authority.
Penalties for untimely payment or underpayment of unified social contribution (USC), as well as untimely submission of USC returns for the periods from March 1 to March 31 and from April 1 to April 30, 2020, are not applied.
From March 1 to May 31, 2020, no interest is charged to taxpayers, and interest charged but not paid for this period shall be written off. For USC payers, no interest is charged from March 1 to April 30, 2020.
Debt payment plans and suspending debt recovery
It is applied on a general basis, but the laws adopted by Ukrainian Parliament and aimed at overcoming the negative consequences of COVID 19 do not provide a special procedure for such a measure. On the contrary, during the quarantine it is allowed to audit the safe state of debtors’ property in a tax lien. But, based on the general requirements of the quarantine regime, certain actions in the area of tax debt collection is not possible. For example:
- Carrying out an inventory of property in a tax lien if the taxpayer has suspended its activities during quarantine;
- Foreclosure sale of property in tax liens at public auction on stock exchanges in settlement of a tax debt due to restrictions imposed by quarantine measures (limited access to bidding, ban on public gatherings, restrictions on movement during quarantine, etc.).
From March 18 to May 31, 2020, a moratorium on documentary and actual audits is introduced, except for audits on the accuracy of the calculation of budgetary VAT refund. The moratorium also does not cover actual audits on law violation in the area of circulation of excisable goods and excise taxation. Documentary audits on USC are suspended for the period from March 18 to May 18, 2020. Based on the results of audits completed before March 18, 2020, the controlling authority draws up audits reports and sends (delivers) tax assessment notices to the taxpayers in accordance with the procedure and within the time-frame. The STS revised and published the updated audits’ schedule, in which planned documentary audits were postponed to June-December 2020.
Enhanced services and communication initiatives
The STS actively encourages taxpayers to communicate remotely and recommends using the electronic services via specialized client software "Single Window for the Submission of Electronic Returns" and the information and telecommunication system "Electronic Cabinet". The STS is issuing a series of video guides on how to use electronic services, information letters, and publishing news on the website, in mass media, in the Telegram channel and other social networks. 27 public services can be obtained online through the public services portal “Action” (various areas).
From the very first day of the quarantine, the determined statute of limitations for applying for administrative and other services and the provision of such services shall be interrupted. From the date of quarantine termination, this period will continue taking into account the time elapsed to its termination. The COVID-19 banner was created on the official STS web portal (www.tax.gov.ua) and on the sub sites of the STS regional offices, where STS publishes up-to-date information, as well as announcements and video materials on the prevention of the coronavirus’s spread.
Temporarily during the quarantine, meetings with the business community and business associations, reception of citizens and meetings with taxpayers were terminated. Taxpayers are recommended to use electronic means of communication with the tax service. A series of video guides have been introduced to assist the taxpayers in using STS e-services and remote communication with tax authority.
The STS has also introduced a series of information letters in response to the most frequently asked questions of the taxpayers, which explain innovations, publishes a list of links and Internet resources for obtaining information or administrative services. On the official STS web portal, sub-sites of the STS regional offices, on social media pages and in the mass media, relevant information for various categories of taxpayers is also quickly published. The STS also provides targeted electronic mailing of informational materials to the members of public councils and representatives of relevant business associations, and certain clients. The Contact Centre and the mobile application «ZIR» («ZIR» - Public Information and Reference Resource) continue to work.
All individual entrepreneurs and self-employed persons are exempted from the USC for the amounts payable by these payers for the periods from March 1 to March 31 and from April 1 to April 30, 2020. By April 30, 2020, aexcise tax applied at a zero rate for each litre of 100% ethylic alcohol intended for the production of disinfectants.
Land payment (land tax and rent) for state and community land plots, as well as for commercial land plots, is not charged and paid. Land payment is not paid if the land is owned or used, including on a rental basis, by individual entrepreneurs or legal entities, which use land plots for commercial purposes. Exemption does not apply to individuals who are not entrepreneurs.
In addition, land payment payers (except for individuals) have the right to submit amended tax return, in which the changes of land payment’s tax obligations for the period of March-April are reflected. From March 1 to April 30, 2020, property tax for non-residential premises (non-residential real estate owned by individuals or legal entities) is not charged or paid.
A moratorium has been introduced for state authorities on conducting supervision and control of planned activities in the field of commercial activity (for the whole period of quarantine). Implementation of e-cash register is postponed until August 1, 2020; in particular, the expansion of the use of cash register for certain types of activities - until January 1, 2021. The introduction of mandatory use of cash register for all payers of the single tax of the second - fourth groups is postponed until April 1, 2021.
The limits for single tax payers of the first - third groups have been increased. By April 30, 2020, state-owned enterprises that produce ethylic alcohol and disinfectants are allowed to use ethylic alcohol manufactured for the production of disinfectors without registered ethylic alcohol counters, upon the condition that each place of disinfectants’ sales is equipped with output measuring devices.
Temporarily in 2020, for income tax payers, the expenses of transferring medicine, drug, equipment, money, food, etc., are recognized without restrictions if such assets are transferred to health care institutions, persons authorized to make purchases in the health sector, public associations, and charitable organizations, as a contribution to countering COVID-19. Thus, while determining the taxation object for tax (reporting) periods of 2020, taxpayers can take into account the full amount of expenses of such a donation exclusively for the indicated operations and specified entities, and under condition that these operations are carried out from April 2, 2020 until the end of the quarantine.
For legal entities - CIT payers, that receive such donation from legal entities and / or individuals during the quarantine while determining the CIT taxation object for tax (reporting) periods of 2020:
- The financial result before tax is reduced by the amount of income from the receipt of any asset from the specified list;
- the financial result before tax increases by the amount of expenses occurred due to the use of these money (equipment, goods of materials) in any tax (reporting) periods of 2020 and subsequent years (if there are corresponding balances as of December 31, 2020 and they are used in future periods).
The statute of limitations for determining the amount of taxpayer liabilities by the controlling authority, tax debt collection, filing an application for returning of excessively paid liabilities, are interrupted. This means that the statute of limitations fallen within the period from March 18 to May 31, 2020, is increased by 75 calendar days, which taxpayers can add to the deadlines for submitting amended tax return related to previously submitted.
For the period until May 31, 2020 (including that date), statute of limitations are interrupted:
- For appealing against decisions of controlling authorities – under the administrative appeal procedure, for taxpayers appeals received until May 31, 2020 and / or which are not considered as of March 18, 2020 (except those related to the accuracy of the calculation of budgetary VAT refund and / or a negative VAT refund from the budget);
- For the provision of hard copy of individual tax advice by controlling authorities;
- For the taxpayers to provide responses to requests of controlling authorities received by May 31, 2020 (except those related to the accuracy of the calculation of budgetary VAT refund and / or a negative VAT refund from the budget). Started from June 1, 2020 the statute of limitations interrupted in accordance with this paragraph will continue taking into account the time elapsed to their interruption.
Local governments are given the right to make decisions on changing single tax rates. Individual entrepreneurs are allowed during the quarantine not to keep a book of accounting for income / expenses, if its keeping was supposed to begin after quarantine was established. At the same time, within 3 months from the date of quarantine termination, individual entrepreneurs must submit to the regulatory authorities a fulfilled book, including income / expenses during quarantine.
Starting from March 17, 2020 and until the last day of quarantine, a preferential VAT regime has been introduced for import and delivery of goods (including medicines, medical devices and / or medical equipment) aimed at preventing, localization and elimination of the coronavirus (COVID-19), regardless of the date of their production and origin (Ukraine or imported), and regardless the subjects / entities involved in such operations, their status as VAT payers or form of property.
At the same time, the taxpayer who delivers goods subject to exemption does not lose the “input” VAT just because of the introduction of a temporary norm. Taxpayer retains the right for recognition of a tax credit on the amount of VAT paid while importing relevant goods, purchasing them, or as part of the goods (works, services) used in the production of these goods (for the manufacturer). Such measures are temporarily introduced for public associations and charitable organizations that are not yet registered as VAT payers. Temporarily for the period ending on the last day of the month in which the quarantine expires, mentioned operations are not included by them when calculating the total amount, upon reaching which the person is required to register as a VAT payer.
Since force majeure circumstances now include the quarantine imposed by the Government, this circumstance may be the reason for writing off a taxpayer’s bad debt arising from force majeure circumstances if this circumstance objectively makes it impossible to fulfil the obligations stipulated by the terms of the contract (agreement and etc.), obligations under law and other regulatory legal acts, and this fact will be confirmed by a certificate of force majeure circumstances issued by the Chamber of Commerce.
Business Continuity Measures
In accordance with the STS order, the remote form of task execution was introduced for certain employees. Remote workers are assigned specific task and deadlines, agreed in writing with the line manager and Department head, and report on their implementation. For this purpose, rapid communication between employee and his line manager and head of the department is crucial and demanded.
Staff and taxpayer safety
Owners / managers of institutions and enterprises were given the right to change the working hours, in particular, the reception and service hours of individuals and legal entities, provided that they duly inform the population through web sites and other communication tools.
In the State Tax Service, organizational and anti-epidemic measures are carried out. For instance, until the termination of restrictive measures established by the Government:
- access to the STS buildings is limited for people, except officials of the State Tax Service of Ukraine, its regional offices, Government and its ministries, law enforcement agencies, MPs;
- all business trips within Ukraine and abroad are cancelled;
- the number of people staying simultaneously in service outlets is limited;
- a requirement has been set up for observing the distance between visitors and service outlets’ employees of at least 1 (one) meter (if possible, with lane lines to visualize this distance);
- shift work is introduced for employees.
There are 2 checkpoints for workers on the STS territory. Temperature screening is conducted daily by non-contact thermometers. Disinfection of all STS premises, places of contact by hands, vehicles, is being carried out. The volume of disinfectants and means of individual protection has been increased. The requirement is established regarding the use of means of individual protection in the premises and on the territory of the STS, as well as in other public places throughout Ukraine.
Temporarily for the duration of the quarantine, meetings with the business community and business associations, reception of citizens and meetings with taxpayers are terminated. In order to assist taxpayers, the STS posts video guides and informational materials on the proper use of e-services and the benefits of using remote communication with the tax authorities on web portal, on the sub sites of the STS regional offices, in social networks and in the media.
According to the STS order, upon the notice of employee, line manager and head of STS structural departments, it is possible to perform official duties outside the STS building at home (at the place of residence). Position and other working conditions, social guarantees established by law are preserved.
Requirement for the heads of STS departments:
- ensure the smooth operation of departments units and control of executive and labour discipline;
- carry out daily performance record of their employees, monitoring them working outside the STS building, at home and/or those, who are on sick leave, on vacation, and those, who are actually at workplaces.
Daily until 11 a.m. reporting information is provided. Modern remote conferencing systems are now being used for carrying out meetings.
This measure is controlled by the line manager and head of the structural unit. A survey was conducted and information was collected regarding employees who recently visited foreign countries where outbreaks of COVID-19 were detected.
There is daily update of information on employees at the workplace, verification of contact information. Permanent contact is kept by officials, who work remotely, with their line managers via telephone and through other telecommunication means. Officials, who work remotely, give a report on the work done and task accomplished in accordance with the prescribed form. Heads of the departments are ensuring rapid communication with employees working at home, monitoring tasks, collecting information on employee well-being, and environmental characteristics.
The appropriate procedure for the use of STS vehicles was approved by STS order. Transportation of employees during quarantine was organized. STS employees are provided with special transport documents for use of public transport and service along subway lines. Permanent contact is kept by officials, who work remotely, with their line managers via telephone and through other telecommunication means.
Training and redeployment
Distribution of presentation materials, information leaflets regarding preventive measures during a pandemic is being carried out. A draft Instruction has been developed for action in case of suspicion or confirmation of COVID-19 disease in the STS main office. According to the Government decision it is forbidden to visit educational institutions until the end of quarantine and the scientific institutions, which provide advanced training, are forced to stop their training activities. At the same time, profile institutions are developing online platforms that could be used by government agencies.
Recruitment and retention
According to the current legislation of Ukraine, the recruitment to the civil service is carried out according to the results of the selection procedure (competition). During the quarantine, the announcement of competitions for public service positions is suspended and those announced were postponed. Selection procedures are prohibited during the quarantine.
Draft Regulations on the commissions on emergency situation of the STS and regional offices were developed.
In case you have any document of information which you find worth to share regarding the actions, measures or concrete experiences in countering the crisis, please do not hesitate to upload it to the subpage focusing on Covid-19 Crisis Support on IOTA website in order to share it with other members.