DRAFT

Anti-corruption drive in public procurement

The Draft Act On Amendments to Certain Legislative Acts of Ukraine concerning Public Procurement on Taking Measures for Fighting Corruption and Bringing in Line with International Standards of 16 June 2015, No.2087а has been submitted by the Cabinet of Ministers of Ukraine.

The Draft Act proposes to enhance the transparency of tenders by eliminating the ban on disclosing the content of submitted proposals; access to the document with price proposals; publishing the protocol of tender offers evaluation and regulating the norms for appealing against the procurement procedures on preventing intentional blocking of trades.

The Draft offers:

— To facilitate participation in procurement procedures by abolishing the need for all participants to submit documents proving compliance with the requirements determined in Article 17 of the Act;

— To increase the value limit of the Act for the purchase of goods and ser- vices to UAH 200,000, and works — to UAH 1.2 million;

— To increase the value limit for the procedure of price quotations to UAH 500,000

— To reduce the functions of the Authorized Body;

— To remove legal conflict in terms of the amendments to the tender documentation; to regulate the written confirmation of documentation submitted for the public by clients;

— To provide an opportunity for amendments to be made to price quotations, to regulate the procurement of centralized heat supply, water supply and draining. 

It is proposed to make amendments in order to specify the definition of exclusive and special rights as well as to reduce the list of exemptions upon public procurement in certain fields of commercial activity.

Prospector’s activities

The Draft Act On Prospecting Activities of 4 September 2015, No.3035 was submitted by MP Boryslav Rozenblat.

The Draft provides for a simplified procedure on prospecting activities compared with  industrial mineral production, which allows the use of mineral resources of any land spots other than state-owned industrial reserves.

The final provisions introduce amendments to the Natural Resources Code of Ukraine, Land Code of Ukraine, the On Licensing of Certain Types of Commercial Activity Act of Ukraine; the On State Regulation of Extraction, Production and Use of Precious Metals and Precious Stones and Control over Operations with them Act of Ukraine.

Taxation of natural gas production companies

The Draft Act On Amendments to the Tax Code of Ukraine on Taxation of the Economic Entities Involved in the Natural Gas Production of 14 July 2015, No.2352а has been submitted for consideration by the Cabinet of Ministers of Ukraine.

From 1 October 2015 for the economic entities involved in commercial natural gas production there will be reduction of the rent rate for the mineral resource use from 55% (for 5000m deposits) and 28% (for over 5000m deposits) to 29% and 14%, respectively.

From 1 January 2018 new taxation terms will be introduced for commercial gas producers. In particular, with total corporate tax of 18% unchanged it is proposed to introduce an income surtax of 15%, expansion of the tax base, and to set the rent rate for use of mineral resources of 20% and 10% depending on the production depth.

The exclusion of commercial sea ports from the list of objects not subject to privatization

The Draft Act On Amendments to Certain Legislative Acts of Ukraine concerning Sea Transport Objects of 10 August 2015, No.2488а has been submitted by the Cabinet of Ministers of Ukraine.

The Draft Act proposes the exclusion of sea transport entities, namely 13 commercial sea ports, Ukrainian Danube Shipping Company, State Black Sea-Azov Production Division for the Control of Sea Routes, Black Sea General Shipping Agency INFLOT and Southern Naval Research and Design Institute from the list of objects not subject to privatization.

The aim of exclusion from the list of enterprises of maritime transport is to improve the quality of management, restructuring of enterprises, concentration of assets and to attract investors and business partners. The Draft establishes the temporary protection of enterprises excluded from supplements to the Act of Ukraine On the List of Objects of State Property not Subject to Privatization, from extra privatization procedures of alienation of their property, particularly in bankruptcy proceedings. Thus, it provides the termination of bankruptcy proceedings for the aforementioned enterprises and also introduced a moratorium on bankruptcy proceedings for three years. Such norms do not apply to objects of state property being liquidated by a decision made by the owner. To ensure state security, the Draft provides the amendments to the Act of Ukraine On State Property Privatization with norms providing that individuals and  legal entities of the state recognized by the Verkhovna Rada of Ukraine as the aggressor as well as individuals and  legal entities put on the list connected with terrorist activities or such to whom international sanctions are used, cannot be buyers, and in case of alienation of privatization objects by them, these objects are taken back into state ownership without compensation.   

Taxation of investments in agriculture

The Draft Act On Amendments to the Tax Code of Ukraine concerning Additional Terms and Conditions of Investment Taxation in Agriculture of 1 September 2015, No.3003 has been submitted by a group of MPs of Parliament.

The Draft introduces amendments to the Tax Code of Ukraine for determining the peculiarities of investment taxation under agricultural agreements on the products distribution as Chapter 18 of the Tax Code for which the amendments are proposed, taking into account the peculiarities of tax charges and payments only for projects with subsoil use.

The amendments introduced by the Draft specify the taxation provisions in the process of the agreements on products distribution in agriculture taking into account the current norms of the Tax Code and its requirements of agricultural producers.