News (#07-08 July-August 2017)

Draft

Abolition of minimum prices for cigarettes proposed

The Cabinet of Ministers proposes to amend Law No.909-VIII On Amendments to the Tax Code of Ukraine and Certain Legislative Acts of Ukraine with Regard to Ensuring the Balance of Budgetary Revenues in 2016.

In particular, it is proposed to exclude the responsibility of the Cabinet of Ministers to establish minimum wholesale and retail prices for tobacco products, tobacco and industrial tobacco substitutes.

The introduction of minimum prices for cigarettes and tobacco is contrary to the provisions of EU Directive 2011/64/EU, which regulates taxation of tobacco products excise rates and setting permissible maximum and minimum retail prices for tobacco products.

The Cabinet of Ministers has already developed a Draft Resolution On Setting Minimum Wholesale and Retail Prices for Tobacco Products, Tobacco and Industrial Tobacco Substitutes, according to which the minimum price of a packet of filtered cigarettes will be UAH 21.10.

The corresponding Draft No.6568 On Amendments to Section II Final Provisions of the Law of Ukraine On Amendments to the Tax Code of Ukraine and Certain Legislative Acts of Ukraine with Regard to Ensuring the Balance of Budgetary Revenues in 2016 was registered at the Ukrainian Parliament on 8 June 2017.

 

Reducing financial burden on transactions with payment cards

Ukrainian MPs have proposed a gradual reduction in the financial burden on business entities when performing transactions with payment cards.

The establishing of a legislative limit of commission for acquirer services is suggested, which is cumulatively paid by holders of electronic means of payment and traders when making payments for goods sold (or services provided).

The Law of Ukraine On Payment Systems and Transfer of Funds in Ukraine intends to disclose the concept of commission for interchange, which includes any payments, discounts, benefits or other forms of remuneration received by the issuer and/or acquirer from any transaction made with a payment card.

The sum of such commission will not exceed: from 1 January 2018 — 1% of the transaction amount; from 1 January 2019 — 0.65% of the transaction amount; from 1 January 2020 — 0.3% of the transaction amount.

In its turn, the total amount of commission for acquirer services (including commission for interchange), which is cumulatively paid by holders of electronic means of payment and traders, when making payments for goods sold (services provided) will not exceed: until 31 December 2018 — 1.5% of the transaction amount; until 31 December 2019 — 1% of the transaction amount; from 1 January 2020 — 0.5% of the transaction amount.

For exceeding the amount of commission, a legal entity or individual entrepreneur, as objects of supervision (oversight), will pay a penalty in the amount ranging from 100 to 200 non-taxable minimum incomes of citizens for each fact of such violation. The penalty will be imposed by the National Bank of Ukraine.

Draft No.6573 On Amendments to the Law on Payment Systems and Transfer of Funds in Ukraine Regarding Commissions During Execution of Acquiring was registered in Parliament on 9 June.

MPs believe that the low level of non-cash payments is related to excessive tariffs for enterprises for making transactions using payment cards (for large enterprises the tariff is from 1.7% for each transaction made with a payment card, and for small and medium-sized enterprises it is from 2% to 3%).

A reminder that the procedure for issue of electronic means of payment and making transactions using them is regulated by the Resolution of the National Bank No.705 of 5 November 2014.

 

Increasing limit for duty-free goods movement is proposed

MPs Andriy Shinkovich and Oleksandr Hereha have proposed amendments to the Customs Code of Ukraine.

Changes will affect the marginal cost of goods that can be moved across the border without the payment of any duties.

The authors of the Draft propose to increase the limit for duty-free goods movement by international mail, express mail and in unaccompanied baggage from EUR 150 to EUR 300.

Moreover, goods moved to the customs territory of Ukraine, whose total invoice value does not exceed EUR 300, will be subject to verbal declaration on the basis of shipping documents.

In the opinion of the initiators, adoption of the Draft would create conditions for expanding access to foreign goods market for Ukrainians, increasing their buying capacity, reducing the tax burden, and also providing consumers with quality goods at a lower price.

Draft No.6584 On Amendments to the Customs Code of Ukraine (regarding the increase in the limit for duty-free goods movement (shipment) by international mail, express mail and in unaccompanied luggage) was registered in Parliament on 13 June 2017.

 

Ukrainian drivers to change licenses to European-style documents

In accordance with the European Union Association Agreement, Ukrainian driving licenses must comply with EU standards. The new document will be recognized by other countries. However, the license’s period of validity will be significantly reduced, and some drivers will have to undergo retraining every five years.

New requirements will mostly affect drivers of buses and trucks. The first Directive 2006/126/EU refers to drivers of passenger cars. The main change is the term of validity of the new license. At present, licenses issued prior to 2011 have no expiry date, while licenses issued after 2011 need to be changed every 30 years. Under EU rules, licenses will be valid for 10-15 years. For example, in Austria, Finland, Germany, Cyprus, Poland, Greece and Slovakia, the document is valid for 15 years. In other countries it is valid for 10 years.

For the purposes of license re-issue, a person will need to undergo a medical examination. Drivers older than 50 years will undergo a medical examination more often, every three to five years. Drivers of passenger cars will not have to undergo additional examinations.

Furthermore, the new driving license may have a chip containing the driver’s data and history of offenses. It will also serve as additional protection against forgery. However, Ukraine does not have to fulfill this condition.

There will also be new requirements for drivers of motorized bicycles and motorcycles. Their age of driving may be increased to 16-18 years and they may be required to take tests. Ukrainians may be allowed to drive large motorcycles from the age of 24.

 

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