On June 2, 2021, the Verkhovna Rada of Ukraine registered Draft Law #5600 "On Amendments to the Tax Code of Ukraine and Certain Legislative Acts of Ukraine to Ensure the Balance of Budget Revenues" (Draft Law #5600). The Draft Law #5600 proposes significant amendments to tax legislation that will directly affect the administration of taxes, the tax base, and the procedure of tax calculations.
AmCham Ukraine member companies' experts analyzed the proposed changes to the Tax Code of Ukraine and consider the vast majority of the proposed changes unacceptable for the business environment. It was submitted a number of comments and precautions regarding provisions of Draft Law #5600 that will increase fiscal pressure on bona fide taxpayers, worsen Ukraine's investment attractiveness, and negatively affect state's economic development as a whole.
Such provisions include the following:
- Changes to the corporate income tax administration in terms of writing-off of losses
- Introduction of changes regarding peculiarities of VAT application which, among other, may cause issues with VAT refund
- Deterioration of the taxpayers' position in the process of reconciling the tax liability and its appeal
- Revision of tax rates and increase of tax burden on certain industries, including excise taxes, rent for the use of radio frequency resource, introduction of the excise duty on renewable energy sources
- Violation of the principle of tax legislation stability
In addition, the business community is concerned about the introduction of significant changes to tax legislation without a sufficient transition period, as this negatively affects Ukraine's investment attractiveness by damaging the companies' long-term budget planning.
The Chamber member companies call upon the Parliament not to support the introduction of the amendments and to reject Draft Law #5600 due to the significant negative impact in case of its provisions' implementation.