Tax Regulation for the Period of Martial Law

On March 3, 2022, the Verkhovna Rada of Ukraine adopted a number of laws, two of which regulate the specifics of tax reporting and overall tax changes introduced for the period of martial law and certain period following it.

Bill No. 7121 “Law on Protection of Interests of Subjects of Reporting and Other Documents during the Period of Martial Law or State of War”

1) individuals, sole proprietors and legal entities shall submit tax, accounting, financial, accounting, settlement, audit reports and any other documents, the submission of which is required in accordance with applicable law in a documentary and (or) electronic form, within 90 calendar days after the cessation or abolition of martial law or state of war for the entire period of non-reporting or obligation to submit the documents;

2) during the period of martial law or state of war, as well as within three months after its cessation, administrative and (or) criminal liability for failure to submit or late submission of reports and (or) documents shall not be applied to individuals, sole proprietors and legal entities;

3) persons who do not have the physical ability to submit reports or documents in connection with the direct consequences of their participation in hostilities within the period specified in this Bill shall be released from administrative and (or) criminal liability and submit reports or documents no later than 30 calendar days from the date of expiration of the consequences that made it impossible to submit them;

4) during the period of martial law or state of war, any checks on the timeliness and completeness of the submission of any reports or documents of a reporting nature shall not be carried out by the authorized bodies.

Bill No. 7125 “Law on Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine Concerning Peculiarities of Taxation and Reporting during the Period of Martial Law”

The following provisions are established:

–  payers shall be released from liability in case of inability to carry out their obligations;

– new tax audits by authorized bodies shall not start, and audits started before February 24 shall be stopped;

– operations on voluntary transfer or alienation of funds, goods, including excisable ones, provision of services for the benefit of the Armed Forces of Ukraine and territorial defense units, without prior or subsequent reimbursement of their value, shall not be not considered sales operations for tax purposes;

– funds and property transferred to the Armed Forces of Ukraine and other units shall be fully included as expenditures;

– the amount of reimbursement of the cost of fuel spent on transportation services to meet the needs of the Armed Forces of Ukraine and territorial defense units shall not be included in the taxable income of individuals who provide such services;

– validity of licenses for the production of excisable products is extended;

– features of production and import of tobacco products are described.

The Bills have now been returned with the President’s signature. Bill No. 7121 is to be published in the media immediately and enter into force on the day of its publication. Bill No. 7125 is to enter into force on the day of its publication.

Sources:

Bill No. 7121  

Bill No. 7125   

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