State Budget 2024 has been adopted, Ukraine's Negotiation Process with EU

State Budget of Ukraine 2024 has been adopted

On 09.11.2023 Verkhovna Rada of Ukraine adopted in its entirety Law of Ukraine “On the State Budget of Ukraine for 2023” (the “Law”).

Let us please remind you of following key macroeconomic indicators established by the Law:

  • expected consumer inflation rate – 9.7%;
  • GDP growth – 4.6%;
  • forecasted average exchange rate of the UAH – 40.7 UAH per $1;
  • revenues – up to 1 768.5 bln UAH;
  • expenditures – up to 3 355 bln UAH;
  • maximum deficit amount – 1 571.5 billion UAH.

The Law is now awaiting the signature of the President of Ukraine.

Verkhovna Rada has reinstated documental tax inspections: law adopted

On 09.11.2023 Verkhovna Rada of Ukraine adopted Law on Amendments to Tax Code of Ukraine and other laws of Ukraine regarding the abolition of the moratorium on tax inspections under bill 10016-d (the “Law”).

The Law provides for the resumption of documental planned inspections from 01.12.2023 to 31.12.2024 regarding:

  • taxpayers in the production/sale of excisable goods, gambling business, provision of financial/payment services;
  • separate units and representative offices of non-residents:
    • whose profit has increased by less than 50% compared to the growth in income;
    • who declare accrued wages without declaring income tax or income exempt from taxation under international treaties;
  • other taxpayers who at the end of 2021 meet one of the criteria defined by the Law, including:
    • have a profit tax payment level lower than the tax payment level in the respective industry by more than 50% – excluding payers of “single tax”;
    • Have a VAT payment level lower than the tax payment level in the respective industry by more than 50% – excluding those whose export operations constitute more than 25% of the supply volume, and simultaneously, the profit tax payment level of which is not less than 50% of the payment level in the respective industry.

Currently, the Verkhovna Rada of Ukraine is to decide on a “blocking” resolution to repeal the decision to adopt the Law. It is expected that this resolution will be rejected, after which the Law will be sent for the President of Ukraine’s signature.

Reduction of the percentage of tax invoice blocking: Cabinet Resolution

On 07.11.2023 Cabinet of Ministers of Ukraine issued Resolution No. 1154 (the “Resolution”), which establishes new indicators for a positive tax history.

As explained by the Ministry of Finance of Ukraine, the changes under the Resolution allow for the registration of tax invoices/correction calculations in the Unified Register of Tax Invoices automatically.

It is expected that the implementation of the Resolution will result in simplifying the registration of tax invoices/correction calculations for conscientious taxpayers.

The Resolution will come into effect on 09.12.2023.

Tax Inspections Plan for 2023 Revised

On 06.11.2023 the State Tax Service of Ukraine updated the plan-schedule of documentary planned tax inspections of taxpayers in 2023.

The changes affected Section I “Planned Documental Inspections of Taxpayers – Legal Entities” and Section II “Planned Documental Inspections of Financial Institutions, permanent Representative Offices, and Representative Offices of Non-Residents.”

State of Martial Law and Mobilization Extended

On 08.11.2023 Verkhovna Rada of Ukraine adopted Law of Ukraine approving Decree of the President of Ukraine “On the Extension of the Period of Martial Law in Ukraine” and Law of Ukraine approving Decree of the President of Ukraine “On the Extension of the Period of General Mobilization”.

The respective periods have been extended until 14.12.2024.

Preparation for Ukraine’s Negotiation Process with the EU Commenced

On 08.11.2023 European Council is recommended to initiate negotiations for Ukraine’s accession to the EU, as reported by the European Commission.

In response, President of Ukraine issued Presidential Decree No. 744/2023, titled “On Some Measures for the Preparation of the Negotiation Process for Ukraine’s Accession to the European Union” (the “Decree”), which instructs the Cabinet of Ministers to take a series of actions to prepare for the negotiation process with the EU.

Cabinet of Ministers has been tasked with, among other things, submitting to Verkhovna Rada of Ukraine a draft law for the approval of a new National Program for the Adaptation of Ukrainian Legislation to EU Law.

The Decree came into effect on 10.11.2023.

NBU has Reduced by Half the Terms of Return of Foreign Exchange Earnings for Agricultural Exporters

On 11.11.2023, the NBU Board Resolution No. 145 dated 10.11.2023 came into force, reducing by half – from 180 to 90 calendar days – the deadlines for settlement on transaction carried out from 11.11.2023 on the export of goods.

The changes apply to goods classified by codes according to the Ukrainian Classification of Goods for Foreign Economic Activity: 1001 (wheat), 1002 (rye), 1003 (barley), 1004 (oats), 1005 (corn), 1201 (soybean), 1205 (rapeseed), 1206 00 (sunflower seeds), 1507 (soybean oil), 1512 (sunflower oil), 1514 (rapeseed oil), 2306 (oil cake).

What will this bring? “The decision is intended to strengthen the discipline of compliance with the settlements deadlines for export transactions by entities of foreign economic activities and to ensure the return of FX earnings within the established deadlines for settlements on some transactions to export goods,” the statement said.