Ukraine De-Shadows Income and Increasing Tax Culture

Tuesday, June 15, 2021
Ukraine De-Shadows Income and Increasing Tax Culture

The Government of Ukraine adopted Law № 5153 "On Amendments to the Tax Code of Ukraine regarding the stimulation of income shadowing and raising the tax culture of citizens by introducing a voluntary declaration by individuals of their assets and paying a lump sum to the budget"

"The adoption of the Law will create incentives for withdrawing income hidden from taxation from the shadow, will help to increase the effectiveness of countering the erosion of the tax base, attract additional resources to the Ukrainian economy and enhance it, increase the tax culture of citizens," the explanatory note says. Moreover, the law will provide an opportunity to build a smart business in Ukraine.

According to the bill, in Ukraine until September 1, 2022, the declaration of assets of individuals will be carried out, that is, a one-time payment will be collected. The declarant calculates the amount of the long-term investment himself.

The law provides for a 5% levy in respect of currency values deposited in the accounts of Ukrainian banks. Also, the payer can choose a 6% rate and pay the tax liability in three equal installments annually. For currency values placed in foreign banks, a 9% fee is determined. You can also choose a rate of 11.5% and pay the obligation in three equal installments annually.

Also, a rate of 2.5% for the par value of government bonds with a maturity of more than a year, which cannot be repaid ahead of schedule, has been set.

Earlier, the Verkhovna Rada adopted another law No. 5155, which amends Art. 16 of the Law On Currency and Foreign Exchange Transactions. 255 people's deputies cast their votes for him. The law abolishes fines for violation of currency laws or regulations of the National Bank of Ukraine. However, only those Ukrainians who decided to declare their property are related to this law.

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