Changes to loans and mortgages regulations
On 4 November 2018 the Law of Ukraine On Amending Certain Legislative Acts of Ukraine Regarding the Restoration of Lending came into force and will be put into effect on 4 February 2019. The Law will enable banks to register the ownership of a mortgage, regardless of encumbrances, and will also provide them with access to the State Civil Register.
This Law applies both to relations that have arisen after its coming into effect, and to existing ones. The exception is new requirements for an agreement on meeting the requirements of the mortgagee, or the relevant clause in a mortgage agreement.
Furthermore, the Law obliges the mortgagee to contact the state registrar with a statement on state registration of the mortgage termination no later than 14 days from the date of full debt repayment under the primary obligation.
If the mortgagor has reconstructed the mortgaged property or carried out unauthorized construction (including construction of new buildings, structures and the like on a plot of land owned or used by the mortgagor), all reconstructed, newly-created real estate objects are considered mortgaged property according to a mortgage agreement.
Changes regarding obligation securities have also been introduced to the Civil Code. In particular, it has been established that liquidation of a joint debtor — a legal entity, death of a joint debtor — an individual does not discharge obligations of other joint debtors to the creditor and do not change their scope or terms of execution.
Moreover, it has been established that persons who, under one or several surety agreements, have provided guarantees to the creditor for fulfillment of the same obligation by the debtor, are considered joint debtors and are jointly liable to the creditor, unless otherwise provided by the agreement.
It has been established that liquidation of a debtor that is a legal entity does not discharge surety, if prior to the date of entry in the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations of a record about liquidation of the debtor — a legal entity, the creditor has filed a lawsuit against the suretor on the debtor’s failure to fulfill obligations.
Law on reducing excise taxes on imported cars and preferential customs clearance signed
On 24 November 2018 the President of Ukraine Petro Poroshenko signed laws enabling legalization of cars with European number plates imported with violation of customs and tax legislations (Draft Laws No. 8487 and No. 8488). The laws introduce a new model of excise tax levy on passenger cars. The basic excise rate for cars with a petrol engine of up to 3,000 cc — EUR 50, over 3,000 cc — EUR 100; with diesel engine up to 3,500 cc — EUR 75, and over 3,500 cc — EUR 150.
The rate charged is equal to the product of the basic and two other multipliers, depending on the cylinder capacity and age of the car. For “European number plates”, the excise tax will be even less, subject to the car’s custom clearance within 90 days. At the same time, the Customs Code sets out conditions for importing a car into the customs territory of Ukraine and establishes an algorithm for the interaction of customs officers, police officers and border guards.
To carry out control, an automated information exchange system will be introduced, and fines for violating the terms of moving vehicles for personal use during the transit customs regime will be increased significantly.
Amendments to taxation
The Ukrainian Parliament has adopted amendments to the Tax Code, which provide the following:
— increase the excise tax on tobacco products by 9% from 1 July 2019;
— to establish the tax rate for land plots, whose regulatory monetary valuation has been carried out, not more than 0.1% and to provide the right to local councils to establish individual land tax rates for wooded lands, if applicable;
— from 1 January 2019 to increase the environmental tax rate for carbon dioxide (CO2) emissions from stationary sources from UAH 0.41/ton to UAH 10/ton and to envisage step-by-step rises in the rate to UAH 30/ton in 2023 (annual increase by UAH 5);
— to increase rental rates for subsoil use for oil and condensate production by 2 percentage points, and for iron ore by 0.8%;
— to increase rental rates for special use of forest resourcesby 50%;
— in order to increase control over fuel turnover, to presentactualmovement of fuel in the context of storage sites in the System of Electronic Administration of Fuel Sales (SEAFS) (currently, accounting is conducted in the context of business entities)
— to compare SEAFS indicators the indicators of flow rate meters and level meters — fuel level meters in the tank in terms of turnover amount and fuel residues in the context of codes according to the Ukrainian Commodity Coding System, excise warehouses and managers of excise warehouses;
— to introduce control over the intended use of jet fuel and to establish responsibility for unintended use of such products (in case of fuel unintended use, to apply an increasing multiplier of 10). Temporarily, from 1 January to 30 June 2019, confirmation of the fact of the intended use of jet fuel is carried out by way of submitting copies of primary documents, which confirm fuel sale transactions by manufacturers and importers, to the controlling body-bill holder.
— to introduce separateaccounting for alcohol movement into SEAFS;
— to establish azero rate of excise tax on ethyl alcohol, used for the production of vinegar, perfume and cosmetic products and products for technical purposes;
— to establish thelist of requirements for enterprises receiving alcohol at a zero rate of excise tax, and to propose that such enterprises should be equipped with flow meters of alcohol received and with flow meters of the amount of products manufactured, information from which is transmitted to the regulatory authorities on a daily basis;
— to establish that standards on changes in excise tax on fuel and alcohol administration come into force on 1 July 2019, and the responsibility for violating them from 1 October 2019;
— from 1 January 2019 to 31 December 2019 (inclusive), a multiplier equal to 1.1 is applied to the rental rate for subsoil use for extraction of iron ore;
The term of exemption from VAT and excise tax on electric vehicles imported into Ukraine has also been extended until 2022.