Customs Inspections are Back, UA Cancels Fines for Hidden Offshores

Customs Inspections are Back: the Relevant Law has Already Entered into Force

On 16 May 2024, Law No. 3613-IX entered into force, which restored the powers of the customs authorities to conduct documentary inspections of compliance with the requirements of Ukrainian laws on customs matters.

This includes, in particular, the following:

scheduled on-site documentary inspections;
unscheduled on-site documentary inspections;
off-site documentary inspections;
counter-checks.

It is reported that such inspections will be carried out only if there are safe conditions for their conduct.

The customs authorities are obliged to renew for the unused period the documentary audits initiated and not completed before 24 February 2022. At the same time, acts (certificates) on the results of documentary audits, counter-checks, objections to audit reports, tax assessment notices, the procedure for delivery of which has not been completed by 24 February 2022, shall be sent (delivered) by 1 July 2024.

Quarterly schedules of documentary scheduled on-site inspections of the customs authority will be published on the official website of the State Customs Service by the 15th day of the last month of the quarter preceding the quarter in which such documentary scheduled on-site inspections will be conducted.

The resumption of documentary inspections does not apply to taxpayers importing humanitarian aid into the territory of Ukraine, as well as those whose location is registered in the territories of temporary occupation, areas of hostilities or possible hostilities.

Parliament Cancels Fines for Hidden Offshore Companies by the End of Martial Law – Ministry of Finance

The Verkhovna Rada has canceled fines for failure to submit reports on controlled foreign companies (CFCs) until the end of martial law.

The corresponding amendment to the draft law No. 10168-2 was supported by 232 MPs.

As a reminder, the 2023 income declaration campaign ended on 1 May. Along with the income declaration, individuals had to submit a report on controlled foreign companies.

In case of failure to submit the report, the individual controller faced a fine of more than UAH 300 thousand, and for violation of the deadlines for its submission – up to UAH 151 thousand.

EU Approves Use of Proceeds from Frozen Russian Assets to Benefit Ukraine

The Council of the European Union has approved a plan to use the proceeds from the frozen assets of Russia’s central bank to help Ukraine.

According to members of Ukraine’s permanent delegation to the OSCE PA, the decision will provide up to EUR 3 billion to Ukraine this year, 90% of which will be used for military needs.

It is also expected that the assets will bring in about EUR 5 billion annually, with Ukraine receiving assistance twice a year.

Fight Against the Negative Effects of Online Gambling Continues: Cabinet of Ministers Adopts Resolution

On 17 May 2024, the Cabinet of Ministers of Ukraine adopted Resolution No. 566 aimed at implementing the decision of the National Security and Defense Council of Ukraine dated 20 April 2024 “On Counteracting the Negative Effects of Online Gambling”.

Thus, the said resolution:

restricts the distribution of gambling advertising using electronic communications and symbols of the Armed Forces of Ukraine;
prohibits the registration of several client accounts for one player by organizers of online gambling;
imposed an obligation on gambling organizers to introduce mandatory breaks in gambling for each player;
restricts access to websites that conduct gambling without a license by blocking domain names, and such blocking is carried out upon submission of the CRGL within 10 days from the date of the relevant submission.

Also, from now on, the gambling organizer must, after registering a player in the online system of the gambling organizer or before accepting a bet, receive information from the player about 1) the limit of funds that the player wishes to spend on gambling during a certain time (day, week, month) and set the chosen limit with the possibility of changing it no more than once a month; 2) the maximum time of continuous participation of a player in a gambling game during a day and the maximum time of his participation in a gambling game during a week and set the selected time of participation in the game.

Parliament is Likely to Consider the Approximation of Ukrainian Legislation to the EU Excise Tax in the Near Future

The relevant draft law has already been submitted for review.

The Cabinet of Ministers explains that the law initiated by the latter is aimed at bringing Ukrainian legislation in line with EU legislation in order to implement the Association Agreement in terms of bringing excise tax rates closer to the minimum level set by the EU.

So far, the draft law proposes the following changes to the Tax Code:

to introduce a definition of the term “intermediate products” in accordance with Directive 92/83/EEC dated 19.10.1992, where “intermediate products” are all products with an actual alcohol strength by volume fraction of alcohol exceeding 1.2 % but not exceeding 22 % and falling under the CN codes 2204, 2205 and 2206;
to increase the excise tax rate for intermediate products from UAH 8.42 to UAH 12.23 per 1 liter (by UAH 3.81), i.e. at the level of the current rate for sparkling wines and carbonated wines, fermented beverages, flavored sparkling wines (beverages);
to set new excise tax rates on fuel, taking into account their minimum level as provided for by Council Directive No. 2003/96/EC dated 27.10.2003, which will enter into force on 1 January 2028.

In particular, it is proposed to set the following excise tax rates for the main types of fuel: for gasoline – EUR 359 per 1000 liters, for gas oil (diesel fuel) – EUR 330 per 1000 liters, for liquefied gas – EUR 277 per 1000 liters.

The draft law establishes a schedule of annual increases in such rates from 01.07.2024 to 31.12.2027 inclusive (for four years), taking into account the overall difference between the rates provided for as of 01.01.2028 and the excise tax rates on these goods in accordance with the effective provisions of the Tax Code.