Russian-Ukrainian Legal Group, P.A.
Kiev, Ukraine; Washington, D.C., USA
Chronicle
of Recent Developments in Ukrainian Legislation
may 2005
Corporate Registration
Customs
Intellectual Property
Investment
Land
Oil and Gas
Taxes
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The “Chronicle of Recent Developments in Ukrainian
Legislation” is a monthly summary of the most important legislative
developments in Ukraine in the area
of business and corporate law, and is prepared, published and distributed by
the Russian-Ukrainian Legal Group as a free service to our clients. The
Chronicle will be distributed via e-mail, in English and Russian, by the middle
of each month, and will summarize the legislative developments of the previous
month. The Chronicle is prepared in an effort to capture news of greatest
interest to the widest cross-section of our firm’s clientele, without restating
all legislation published and drowning our readers in too much information. Due
to the winnowing process necessary when preparing the Chronicle, we cannot and
do not guarantee that it contains a comprehensive list of all Ukrainian
legislation relevant to your business. Finally, please bear in mind that this
summary does not constitute legal advice; it is an informational service
only. Should you wish to receive further
information or actual legal advice, please do not hesitate email us at chronicle@rulg.com
Corporate Registration
1) State Committee of Ukraine for
Regulatory Policy and Entrepreneurship Letter No. 585/0/2-05 "On Providing
Clarifications Concerning the State Registration of Foreigners" dated 1 February 2005. According to the Letter, a foreigner who is a
founder of a Ukrainian legal entity need not possess the Ukrainian tax
identification number that is ordinarily required for registering a legal
entity with the State. The Letter also says that signatures of foreigners who
are citizens of any CIS countries notarized in these countries are recognized
in the territory of Ukraine. The Letter was promulgated in Ukrainian electronic legal databases at
the end of May of 2005.
Customs
2) State Customs Service
of Ukraine Order No. 328 "On Incorporating Amendments and Addenda into the
Procedure for Supervising Delivery to the Destination Customs of Transit Goods
Which Are Transported Across the Customs Territory of Ukraine on the Conditions
of the Customs Convention on the International Transport of Goods Under Cover
of TIR Carnets" dated 25 April
2005. A carrier may use information,
contained in a contract, to prepare documents about goods it is transporting
under a TIR carnet. The Order will take effect on 17 June 2005.
Intellectual Property
3) Ministry of Education
and Science of Ukraine ("Ministry of Education") Order No. 228 "On
Approving a Procedure for Recognizing a Mark as Being Well-Known in Ukraine by
the Chamber of Appeals of the State Department of Intellectual Property"
dated 15 April 2005. In
order to have a trademark recognized as being well-known in Ukraine, the applicant or its representative,
should file an application supported by documents confirming any factors
relevant to the trademark's being "well-known". The Procedure gives
further details on what factors would be relevant. The Order took effect on 16 May 2005.
4) Ministry of Education
Order No. 247 "On Approving the Instructions on the Procedure for
Familiarizing a Person with the Materials of an Application for an Object of
Intellectual Property Rights" dated 22 April 2005. Any person may petition for the
right to review materials of an application for an invention, industrial mark,
chip topography, trademark for goods and services, for the registration of a
qualified indication of the origin of goods and for the right to use such an
indication. The Order took effect on 22 May 2005.
Investment
5) Bill No. 7479 "On Incorporating Amendments into
the Law of Ukraine "On Value-Added Tax" (Concerning Taxation Of Investments)" dated 13 May 2005. Among other things, the Bill stipulates that
transfers of fixed assets (in-kind contributions) as contributions into
authorized funds of legal entities for the formation of their integral property
complexes in exchange for issued corporate rights, including during importation
or exportation of said fixed assets (other than goods subject to excise duties)
into or from Ukraine, should be VAT-exempt. The Bill was submitted to the Rada
on 13 May 2005. It should be noted that recent introduction
of VAT on in-kind foreign investment caused negative reaction in the business
and investment community.
6) Bill No. 7559
"On Incorporating
Amendments into the Law of Ukraine "On
Taxation of Profits of Enterprises" (Concerning Encouragement of
Investments)" dated 30 May 2005. The Bill introduces a new term: "refundable
financial investment", which means granting money to a taxpayer without
acquiring corporate rights to be used in economic activities under an
investment agreement, with the aim of jointly deriving profit and subsequently
returning the money. Amounts received as refundable financial investments are
not to be included in the taxpayer's gross income. The Bill was submitted to
the Rada on 27 May 2005.
Land
7) State Committee of
Ukraine for Land Resources Order No. 132 "On Approving a Procedure for
Obtaining the Documents, Materials and Other Information Required for State
Supervision of the Use and Protection of Lands" dated 19 May 2005. The State Inspectorate for Supervision of the Use and Protection of
Lands has been authorized to petition and receive from the bodies of
executive power, legal entities and individuals the documents, materials and
other information that are necessary for exercising its supervision. Failure by
officials to comply with such a petition, failure to provide the requested
documents, and creation of other hindrances to relevant State inspectors is
punishable by administrative fines imposed on the officials in the amounts
stipulated by law. The Order took effect on 13 June 2005.
Oil and Gas
8) Law of Ukraine No.
2565-IV "On Incorporating
Amendments into Some of the
Laws of Ukraine Concerning Stabilization of Prices on the Oil Products
Market" dated 17 May 2005.
The Law established a fixed rate for the excise duty on gasoline of 60 Euro for
1000 kg, and for diesel fuel of 30 Euro for 1000 kg. A zero-rate import duty
has been established for imports of the aforementioned oil products. The Law
took effect on 19 May 2005.
9) Cabinet of Ministers of
Ukraine ("Cabinet of Ministers")
Resolution No. 355 "On Canceling the Additional Fee for Customs Clearance
of Oil Products" dated 18 May 2005. The additional
fee for customs clearance of oil products, which are imported into Ukraine and subject to excise duty at the rate of 0.01 ecu per 1 kg, has been cancelled. The Resolution took effect on 20 May 2005.
10) Cabinet of Ministers
Resolution No. 406 "On Nullifying Some of the
Resolutions of the Cabinet of Ministers of Ukraine" dated
28 May 2005. The Resolution,
which required registration of foreign-economic contracts for export
operations with oil under the code of the Ukrainian Classifier of the Goods of
Foreign-Economic Activity (UKTVED) 2709009000, has been nullified. The Resolution took effect on 2 June 2005.
Taxes
11) Bill Ukraine No.
7413-D "On Incorporating
Amendments into Some of the
Laws of Ukraine (Concerning
Taxpayers)" dated 1 June 2005. The Bill restores the simplified taxation system
conditions that existed before the adoption of the Law on the Amendments to the
Law on the State Budget for 2005 (please see the March and April 2005 issues of
this Chronicle). It also stipulates cancellation of mandatory registration of
payers of the uniform tax as payers of VAT if their annual turnovers exceed
300,000 UAH. The Bill cancels the restriction on the use of the simplified
taxation system for such activities as audits, legal services, real estate operations,
and sales of medicine. It also cancels the rule pursuant to which payers of the
uniform tax were treated as hired persons with respective taxes being levied on
their incomes received as salaries. The Bill was adopted by the Rada on 3 June 2005, and if signed by the President of Ukraine, the Law
will take effect from the moment it is published in an official publication.
12) State Tax Administration
of Ukraine Letter No.
3335/6/12-0216 "On Issuing Replies" dated 21 April 2005. The Letter contains answers to certain questions
posed by the European Business Association, in particular, those concerning:
(1) the method for determining the object of taxation for permanent
representative offices of non-residents that operate not only in Ukraine, but
also outside Ukraine, by preparing a separate balance sheet of financial and
economic activity; (2) taxation of the income of non-residents that operate in
Ukraine through permanent representative offices, and payment of the tax levied
on such non-residents' income when such income is paid to the permanent
representative offices; (3) taxation of money received by permanent
representative offices from the non-residents' principal offices; (4) penalties
for the failure to withhold non-residents' income taxes by tax agents and the
option for them to submit clarifying calculations. The Letter was promulgated
in Ukrainian electronic legal databases at the end of May of 2005.