#05 May 2014

In focus – Real Estate & Construction

The state registration of real estate and land rights underwent tremendous changes lately. Like every reform it makes stakeholders meet difficulties. It required lawyers to learn new rules and how to play them on the ground of the profession. Since investors and developers command a wait-and-see attitude, the views on current reform are the main subject of the analysis of our recent contributors…

With the support of Tax Regulation

Depending on the type of controlled transactions and the specific business activities of the taxpayer, one should choose a pricing method based on which the compliance of the contract price with the usual price would be examined.

The procedure has a particular pattern. The legislation provides for five traditional pricing methods, and there are special rules for setting prices for export and import transactions with non-residents from low-tax jurisdictions for specific commodity groups that are in effect till 1 January 2018. Yaroslav Romanchuk, managing partner of International Legal Center EUCON, explains that if the special rules do not apply to the controlled transaction, the first method of comparative uncontrolled price has priority…

Expert Opinion

State Registration of Property Rights

Alina V. Trofimova

Ukrainian laws stipulate that ownership, lease and other property rights that have arisen from the ownership of immovable property and land plots becomes valid after their state registration.  In other words, a person may transact with immovable property only after state registration of the respective property rights.

Rights which arise out of ownership and which are subject to state registration are lease, superficies, emphiteusis, easement, property, management rights, and the right of permanent use of a land plot...

State Registration of Land Lease Rights

Anna V. Sisetska

Last year the Ukrainian land market as well as the real estate market as a whole saw the introduction of a new title-based system of registration of proprietary rights, which makes the accrual of a right conditional on the registration of the same, as opposed to the previous transaction-based system, which treated the registration of a transaction giving rise to a right as a condition precedent to the accrual of such right or title. The new developments have a substantial impact on the procedure for acquiring a land lease right, which is the most popular model of doing business in Ukraine. In this context, the year 2014 is expected to be less promising and in the main limited to the development and further legislative strengthening of the principles underlying the current reform of registration of real estate and land rights…

In Re

Registration of Ownership Rights of Real Estate Investors

Vitaliy S. Bakhurinskiy

For a long time there was a problem of not explicit legislative decisions in the issue of acquisition of ownership in emerging real estate. This problem greatly hampered the development of economic relations in the country. Therefore, there was a need to adopt the Civil Code of Ukraine (hereinafter — CC of Ukraine), which came into force on 1 January 2004. One of the tasks of the Civil Code was to resolve clearly and unambiguously the issue of the date of acquisition of ownership in emerging real estate. In the third part of the CC there are new legal facts that give rise to ownership of real property. However, the novel mechanism also contains drawbacks. The issue here is primarily about acquiring new constructed or renovated buildings, “legalization” of which, as usual, is impossible for their owners, for various reasons relating to a rather complicated procedure of legalization of property rights, which are not accessible to everyone…

Hot Issue

Uncertainty of Jurisdiction in Question

Anton A. Molchanov

Having adopted the On Ensuring the Rights and Freedoms of Citizens and on Legal Regime on the Temporarily Occupied Territory of Ukraine Act of Ukraine (which is often being called the On Occupied Territories Act), the Ukrainian Parliament has created another controversial precedent in modern Ukrainian history. As hot discussions on the necessity and consequences of the Act continue, ordinary people and business entities are preparing to live in a new Crimean world — whether it would be an Orwellian anti-utopia or a new Eden. 

In these new realities the main issue is uncertainty of jurisdiction in question. The official position of Ukrainian authorities embodied in the Act is to consider the Crimean peninsula as temporarily occupied territories of Ukraine…

Venue

Tax Perspectives in Difficult Times

I International Tax Forum organized by Yuridicheskaya Practika Publishing, in unison with the Public Board of the Ministry of Revenue and Duties of Ukraine, took place on 10 April 2014 at the Premier Palace Hotel in Kiev. Rustam Kolesnik, editor-in-chief of Yuridicheskaya Practika Weekly, together with Yaroslav Romanchuk, head of the Forum Organizing Committee, managing partner of International Legal Center EUCON, and Nikolay Chmeruk, director of tax and customs policy, income, payment administration and accounting methodology department of the Ministry of Finance of Ukraine, welcomed the participants and gave a brief review of the importance of changes to tax legislation…

Crux

Strict and Unpopular Stabilizers

A series of rapidly changing events in Ukraine, the most dramatic the country has observed since it declared independence, has undermined stability in all walks of life. The economic consequences could be hardly underestimated. The new government has taken a range of strict and quite unpopular measures to stabilize the situation. To be fair, so many legislative changes in such a short period of time are hardly reminded for late. No wonder, our expert panel is focused on proper analysis of the latest legislative news…

 

Svitlana Chepurna

The On Amendments to Certain Legislative Acts of Ukraine as to Reduction of the Number of Permitting Documents Act of Ukraine approved by the Ukrainian Parliament on 9 April 2014 (the Act) is a positive and long-awaited step towards easing the regulatory regime in Ukraine. The Act should open new opportunities in spheres that are currently subject to excessive and/or non-transparent administrative barriers…

 

Gabriel Aslanian

Over the past few months, the National Bank of Ukraine (the NBU) has introduced certain measures intended to reduce the uncontrolled outflow of hard currency abroad. By its Resolution No.49 of 6 February 2014 the NBU prohibited the purchase of foreign currency for early repayment of loans. Resolution No.49 was substituted with Resolution No.172 of the NBU, according to which a Ukrainian borrower can repay a loan under an agreement with a foreign lender, including in case of introduction of an amendment to the loan agreement, not earlier than on the date established by such loan agreement…

 

Andriy Lytvyn

On 20 April 2014 the new On Public Procurements Act of Ukraine No.1197-VII came into effect. It is necessary to notice that the following positive and helpful changes came about due to this Act:

— The list of cases which are not under the action of the On Public Procurements Act was cut down…

 

Yuriy Gomza

The main goal of the Act is to increase state budget in the shortest possible time.

In order to reach this goal the Act provides increasing taxes and fees rates, extending the tax base, as well as carrying out a number of actions to reduce budget expenditures.

We suppose that such innovations may be effective only on a short-term prospect. The Act may serve to reach the stated goal and to increase budget revenues but in the long-term prospect its effect is more likely to be negative…

 

Igor Reutov

The Act as of 10 October 2013, No.642-VII is aimed at eliminating unlawful schemes used for fraudulent acquisition of shares and supervening illegal appropriation of property thereafter. Giving a general outline of the new regulation, several aspects thereof could be distinguished.

Firstly, the Act introduces criminal liability for submission of forged documents to the State Registrar within the procedure of state registration of a legal entity (including state registration of changes of information related to existing legal entity)…

 

Nazar Chernyavsky

The idea of “tax” or “capital amnesty” is not new for Ukraine. A number of politicians have been playing with it for many years hoping to return some mythical capital to Ukraine. At the same time, we should consider a number of factors, which are unique for Ukraine, when deciding on the feasibility and efficiency of such amnesty. There are many positive examples of tax amnesty in foreign countries. Belgium, France, Ireland, Italy, USA and many others managed to significantly increase tax revenues by introducing “voluntary compliance programs” or “tax amnesties” at some point in time…

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