The Compensation for War Damaged / Destroyed Property, Definition of Enterprises as Important, ..

The Law on the Compensation Mechanism for War Damaged and Destroyed Property is Expected to Enter into Force

On 22.05.2023, Law of Ukraine No. 2923-IX dated 23.02.2023 is entering into force, providing for the possibility for persons – owners of real estate objects, which are destroyed in connection with the full-scale invasion of russia, to apply for compensation for such an object, as well as the right for the owners of damaged real estate to receive compensation from the state for such damage.

To implement the provisions of the Law, the executive body of the village/city council, the military or military-civilian administration of the settlement forms a special Commission, which is entrusted with the duty of considering issues regarding the provision of compensation for destroyed real estate objects.

To receive the compensation provided for by the Law, a person applies for compensation for a destroyed real estate object directly to such Commission on the relevant territory. It is possible to apply both on paper and in electronic form.

The application can be submitted during martial law and within one year from the date of its termination or cancellation.

It is stipulated that the term of consideration of the application should not exceed 30 calendar days from the date of submission of the application.

Compensation for destroyed real estate can be provided by:

  • provision of funds by transferring it to the current account of the recipient of compensation – to finance the construction of a homestead-type house, garden or country house;
  • financing the purchase of residential premises.

Compensation for damaged real estate property is provided by performing construction-related work on the damaged real estate property for the purpose of its restoration and/or providing construction products for such work.

The Cabinet of Ministers of Ukraine is expected to adopt a document that will regulate the procedure for providing compensation for damaged real estate.

The Criteria for Classifying Financial Market Participants as Critical for the Functioning of the Economy during the Period of Martial Law have been Determined

On 29.03.2023, Resolution No. 32 dated 24.03.2023 of National Bank of Ukraine (NBU) entered into force, approving the procedure for determining by the NBU legal entities that are critically important for the functioning of the economy and ensuring the livelihood of the population in a special period.

Let us please remind you that by Resolution No. 76 dated 27.01.2023, the Cabinet of Ministers of Ukraine defined a mechanism for reservation of conscripts during martial law who work, inter alia, at enterprises, institutions and organizations that are critically important for the functioning of the economy and ensuring the livelihood of the population in a special period.

In accordance with NBU Resolution No. 32, an institution can be defined as having as important for the financial market, if it is:

  • a systemically important bank;
  • an insurer that is assigned to the 1st or 2nd group of public importance, which has a valid license to provide voluntary life insurance or compulsory civil liability insurance of owners of land vehicles, and also complies with the standard of solvency and capital adequacy and the standard of riskiness of the insurer’s operations;
  • a lessor that is a member of a banking group in which the responsible person-bank is systemically important, and in which the cost of new financial leasing contracts concluded during the last reporting year exceeds UAH 1 billion;
  • participant of the payment market and classified as systemically important or important payment systems, important participants of payment systems and important technological operators based on the results of 2022;
  • a legal entity that has received a license to provide collection services to banks and/or approval from the NBU to carry out cash handling and storage operations, which on average per quarter collects and transports cash in the amount of more than UAH 5 billion, and collects at least 1,000 customer retail outlets and at least 1,000 bank machines and/or self-service software and technical complexes;
  • an association of insurers providing mandatory civil liability insurance of owners of land vehicles for damage caused to third parties;
  • a legal entity that provides services to systemically important banks that are auxiliary to payment services, and its activities are directly related to the maintenance of bank machines, payment terminals, and the execution of interbank payment transactions in volumes of not less than 35% of the number of relevant devices/ operations of a systemically important bank.

To be recognized as critically important, an institution whose activity is regulated by the NBU have to contact the NBU directly and provide information (documents) confirming its compliance with at least three of the seven criteria specified above.

If the institution is recognized as critically important for the financial market, it has the right to submit a list of conscripted employees to the NBU for their reservation.

Criteria for Definition of Enterprises as Important for the National Economy by the Ministry of Finance have been Established

On 28.03.2023, Order of the Ministry of Finance of Ukraine No. 137 dated 16.03.2023 entered into force, approving the criteria based on which the Ministry of Finance will determine enterprises, institutions, and organizations that are important for the national economy.

According to the document, enterprises / institutions / organizations have to be defined as important for the branches of the national economy, if they meet at least one of the following criteria:

  • implementation of the state policy, the formation of which is responsible for the Ministry of Finance;
  • activity in the field of accounting and auditing, the formation and implementation of which is ensured by the Ministry of Finance;
  • performance of works and provision of services for the Ministry of Finance on the basis of agreements (agreements, memoranda, contracts), which are concluded for a period of at least six months;
  • provision of services that meet the needs of enterprises, institutions, organizations that are under the control of the Ministry of Finance or in respect of which the Ministry of Finance performs functions of managing corporate rights belonging to the state in its authorized capital, or exercises control over its activities, if the absence of such services will lead to disruption of the stable functioning of such enterprises, institutions, organizations;
  • stay in the sphere of management of the Ministry of Finance or the Ministry of Finance performs functions of management of corporate rights belonging to the state in its authorized capital, or exercises control over its activities.

The Law on the Implementation of the International Standard for Automatic Exchange of Information on Financial Accounts was Adopted

On 20.03.2023, the Verkhovna Rada of Ukraine adopted in its entirety the Law on Amendments to the Tax Code of Ukraine regarding the implementation of the International Standard for Automatic Exchange of Information on Financial Accounts (draft law No. 8131 dated 17.10.2022).

The purpose of the Law is the implementation by Ukraine of the Common Reporting Standard and Due Diligence for Financial Account Information, approved by the OECD (CRS Standard). Implementation of the CRS Standard into national legislation is a mandatory condition for Ukraine to join the international information exchange system within the framework of the Multilateral Competent Authority Agreement for the Automatic Exchange of Information on Financial Accounts.

Therefore, the Law provides:

  • obligations and rights of supervisory bodies to ensure the receipt of information necessary for exchange, in accordance with the CRS Standard;
  • requirements for financial agents to apply the rules of the CRS Standard during due diligence of financial accounts and to submit to the STS information about the financial accounts of account holders who are tax residents of other jurisdictions – information exchange partners;
  • requirements regarding the minimum period of storage of documents and the procedure for providing such documents to the supervisory body by some entities of economic activity;
  • the procedure for obtaining information for tax purposes by the supervisory body in accordance with the CRS Standard and at the request of the competent body of a foreign jurisdiction on the basis of an international agreement;
  • an effective control mechanism for compliance with the requirements of the CRS Standard by financial agents.

According to the statement of the Ministry of Finance, the adoption of this Law will allow Ukraine to properly fulfill its international obligations regarding the exchange of information for tax purposes, increase the transparency and reliability of Ukraine as a partner state for the exchange of information, and also contribute to the prevention of tax evasion and increase the level of compliance requirements of tax legislation.

Let us please remind you that the CRS Standard was developed by the Organization for Economic Cooperation and Development (OECR) and provides for the annual automatic exchange of tax information between states that are participants of the Multilateral Competent Authority Agreement for the Automatic Exchange of Information on Financial Accounts.

Currently, the Law is pending on the signature of the President of Ukraine.

New Forms of Tax Documents will be Effective from 1 April 2023

On 01.04.2023, Order of the Ministry of Finance of Ukraine No. 463 dated 28.12.2022 is entering into force, according to which the updated forms were approved, such as:

  • tax invoice;
  • VAT tax declaration;
  • clarifying calculation of VAT tax liabilities;
  • simplified VAT tax declaration;
  • clarifying the calculation of VAT tax liabilities to the simplified tax declaration in connection with the correction of self-identified errors.

Application of the new forms, approved by the Order, begins from:

1 April 2023 – for tax invoices and calculations of adjustments of quantitative and value indicators to tax invoices;

1 May 2023 – for the VAT tax declaration and the clarifying calculation of VAT tax liabilities in connection with the correction of self-identified errors.

It is Proposed to Limit the Use of Patriotic Themes When Registering Trademarks and in Advertising

On 20.03.2023, Draft Law No. 9128 was registered in the Verkhovna Rada of Ukraine, which provides for amendments to the legislation of Ukraine in the field of IP.

Among other things it is proposed by this Draft Law:

  • the impossibility of registering and providing legal protection to trademarks, the designation of which in any way reproduces national security measures carried out with the aim of repelling and deterring russian armed aggression, the names of settlements and localities affected by russian armed aggression, or contains other references to hostilities and military operations.
  • prohibition of distribution of advertising of goods, works and services using information like the one mentioned above.