1. In Ukraine, martial law and general mobilization have been extended until November 16, 2023.
On July 27, 2023, the Verkhovna Rada approved:
- Draft Law No. 9532, dated July 26, 2023, regarding the approval of the Presidential Decree of Ukraine on the extension of the state of martial law in Ukraine.
- Draft Law No. 9533, dated July 26, 2023, regarding the approval of the Presidential Decree of Ukraine on the extension of the period of general mobilization.
The Verkhovna Rada has approved:
- Presidential Decree of Ukraine dated July 26, 2023, No. 451/2023, on the extension of the state of martial law in Ukraine.
- Presidential Decree of Ukraine dated July 26, 2023, No. 452/2023, on the extension of the period of general mobilization.
The following extensions have been made:
- Martial law in Ukraine is extended for 90 days, starting at 05:30 AM on August 18, 2023.
- General mobilization is extended for 90 days, starting on August 18, 2023.
2. The National Bank of Ukraine (NBU) has reduced the discount rate to 22%.
The National Bank has decided to reduce the discount rate from 25% to 22% starting July 28, 2023 (Decision of the NBU dated July 27, 2023, No. 258-p "On the Discount Rate"). Recall that the NBU discount rate of 25% was in effect from June 3, 2022, to July 27, 2023.
USC, TAXES, AND ACCOUNTING
Information letter from the State Tax Service of Ukraine (STSU): "Return to the pre-war taxation system: transition peculiarities," which explains the tax implications for taxpayers during the period of martial law due to changes introduced by the Law of Ukraine dated June 30, 2023, No. 3219-IX.
In particular, the letter provides the following explanations:
1) As of August 1, 2023, the following deadlines are restored:
- Providing individual tax consultations by supervisory authorities.
- Reviewing taxpayers' complaints about decisions made by supervisory authorities.
- Responding to requests from taxpayers by supervisory authorities.
- The period for forming a tax credit is 365 calendar days from the date of issuing the tax invoice.
- For banks, other financial institutions, non-banking payment service providers, and electronic money issuers, the deadline for sending notifications about opening or closing a taxpayer's account or electronic wallet to the supervisory authority where the taxpayer is registered and for supervisory authorities to send notifications about taking the account or electronic wallet into account.
Notifications about opening or closing all accounts and electronic wallets opened or closed for taxpayers from February 24, 2022, to August 1, 2023, must be sent to supervisory authorities no later than September 1, 2023.
2) The letter provides explanations for taxpayers who temporarily transitioned to the simplified tax system with special conditions (Single Tax Group 3 with a 2% rate) due to the abolishment of the possibility to apply special tax conditions starting from August 1, 2023:
- Transition to profit tax.
- Conditions for remaining on the simplified tax system but with different rates.
- Reflecting tax obligations, tax credits, and other VAT-related matters after the re-registration of VAT taxpayers.
Important! Suppliers who temporarily used the simplified tax system must register tax invoices related to transactions for the supply of goods or services carried out before transitioning to the simplified system within 60 calendar days from the date of re-registration as VAT taxpayers, provided that such tax invoices were not previously registered.
If the supplier registers such tax invoices within the deadline (i.e., within 60 calendar days), the buyer is entitled to a tax credit in the reporting period in which the transaction took place and the tax invoice was issued. If the buyer has already received a tax credit during the acquisition of goods or services based on primary documents, no adjustments are needed.
If the supplier fails to register tax invoices within the deadline (i.e., after 60 calendar days have passed), the buyer loses the right to a tax credit for such tax invoices. If the buyer had already formed a tax credit during the acquisition based on primary documents, they will need to reduce it by providing an adjusting calculation in the VAT declaration. The buyer's right to a tax credit is reinstated when the supplier eventually registers these tax invoices.
3. Funds received by individuals as compensation for damaged or destroyed real estate, as per the Law "On Compensation for Damage and Destruction of Certain Categories of Real Estate Objects as a Result of Hostilities, Terrorist Acts, Sabotage Caused by the Military Aggression of the Russian Federation Against Ukraine," and the State Register of Property Damaged and Destroyed as a result of hostilities, terrorist acts, sabotage caused by the military aggression of the Russian Federation, are not subject to taxation.