#01-02 January-February 2012

In focus – Tax

Amid weak fiscal conditions, low social welfare standards and the permanent crisis in the Euro zone, taxation is once again at the core of policy debate in our country. For the present, business argues for evidence of the new Tax Code that is already a one year old document. The period is probably too short for global conclusions to be drawn. However, some intermediate findings are definitely required at this stage

Expert Opinion

Tax Code of Ukraine in Violation of Ukraine's International Obligations?

Taras H. Koval

This month marks the first anniversary of the enactment of the Tax Code by the Ukrainian Parliament. The Code is designed as a single compilation of tax law in Ukraine and it should not be forgotten that tax law in Ukraine is also regulated by international treaties dealing with taxation. Closer analysis shows that a certain number of these treaties may be at odds with provisions of the Tax Code...

Ukrainian Property Transfers between Non-Residents: Ukrainian Tax Implications

Dmytro B. Ivanusa

When the transfer of Ukrainian property (assets, shares, real estate, etc) by non-residents to other non-residents generally ceased to be something extraordinary from the Ukrainian legal perspective, the respective Ukrainian tax consequences remained uncertain. This was especially so when the selling non-residents are legal entities. Due to these uncertainties, non-residents often prefer to structure their deals outside Ukraine, for instance, at the level of foreign holding companies and, as a result, the Ukrainian state does not obtain taxes it desperately needs to finance its own expenditure...

In Re

Ukrainian Debt Push-Down

Roman P. Blazhko

With the deeper integration into the world economy, Ukraine increasingly mimics Western techniques in the sphere of tax planning. Debt push-down is one such technique widely employed by oversees businesses in the area of M&A that is becoming more and more popular in Ukraine. The debt push-down covers the debt finance and is designed to achieve deductibility of interest expenses accrued on a loan attracted for the acquisition of a business...

Taxation of Enterprises

Katerina A. Nastechko

According to Tax Code of Ukraine, legal entities incorporated in line with Ukrainian legislation and provided commercial activity as on the territory of Ukraine as abroad are subject to pay corporate income tax.

The tax base for definition of company income tax is net income of enterprise, namely the difference between gross receipt minus gross diversion including amortization...

Recent Amendments in Tax Legislation: Time to Revisit Cyprus Ukraine Business Structures

Anna M. Zafirova

We are now witnessing a real quest for greater transparency both on a national and international level. The media is taking its fair share in this pursuit by regularly publishing or broadcasting success stories of tax authorities which, alone or in collaboration with their foreign colleagues, have cracked down one of the ever-evolving schemes for tax evasion or prevented an attempt to expatriate funds in breach of tax legislation...

Hot Issue

Pharmaceutical Dishonesty

Inna N. Moskalenko

One of the most dynamic sectors of the national economy suffers from a predominance of counterfeit goods.

The pharmaceuticals business is one of the most profitable segments of the Ukrainian market. Our country is a cherished and rewarding market for foreign manufacturers of medical products, and at the same time it can boast of its own well developed chemical and pharmaceutical industries. In other words, this market is very busy, and it is witnessing tight competition

Argument

Marine Transport Development in Ukraine in its 20 Years of Independence

Arthur A. Nitsevych, Nikolay V. Melnykov

The anniversary celebration, in particular, a state independence anniversary suggests summarizing some results of the states independent life. People working and closely related to the maritime sector, namely lawyers specializing in maritime law cannot stand aside from celebration of such remarkable date as 20 years of Ukraines declaration as an independent state

Ukrainian Parliament Attempts to Enhance Regulation of Consumer Lending

Yulia A. Goptarenko

On 16 October a law introducing amendments to a number of Ukrainian laws governing relations between creditors and consumers of financial services became effective. The law is expected to affect the position of both parties to consumer lending banks and their borrowers. One of the main developments of the law relates to the renewal of a ban on extending consumer loans in foreign currency on the territory of Ukraine

Global Legal Update

Party Autonomy vs. Mandatory Rules in International Arbitration

Olena S. Perepelynska

Needless to say arbitration, based on the agreement of the parties concerned, gives the latter possibility to determine the procedure of resolution of their case. This basic principle of arbitration is known as party autonomy.

According to one of the classic books in international arbitration Party autonomy is the guiding principle in determining the procedure to be followed in an international commercial arbitration

Venue

Competition is Getting Stronger

Nataliya V. Koloskova

The 1st CIS Competition Law Conference, jointly organized by International Bar Association (IBA) and Ukrainian Bar Association (UBA), took place on 8-9 December at President Hotel in Kiev. The conference provided extensive coverage of recent developments in competition law policy and enforcement in Ukraine and other CIS countries, which were highlighted by speakers from Ukraine and foreign jurisdictions. For the first time in the history of the UBA such an event was held on the area of competition law and immediately gathered core leading specialists under one roof

Crux

Ukrainian Tax Code: Application Story

Mykola Stetsenko

The introduction of the Tax Code significantly influenced the practice of corporate restructurings involving legal entities registered abroad. In particular, five below novels of the Tax Code seem the most relevant in this respect

Kateryna Voznesenska

Tax incentives are defined as exceptions to the general tax rules and intended to reduce the tax burden of taxpayers. According to international practice tax incentives include, inter alia, loss carry forwards for corporate profit tax (the CPT) purposes

Tatyana Kuzmenko

Fairly speaking, in 2011 business did not much succeed in developing effective structures with regard to tax optimization of transactions with payers of the single tax. The straightforward wording of Sub-clause 139.1.12 of Clause 139.1 of Article 139 of the Tax Code does not offer any chance for maneuver with respect to increasing the deductible expenses associated with purchases of goods (works, services) from individual entrepreneurs who have the status of single-tax payers

Vadim Tugay

Recently, the number of criminal cases related to crimes in the area of taxation has been really growing. However, it can hardly be explained by the desire of law-enforcement agencies to eradicate crime. Actually, it relates to more mundane reasons

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