news
21.06.2010
STAU: a foreigner can let real estate on lease only through the legal entity
In the letter 2745/6/17-0716 STAU explained procedures for taxation with income tax of lease the real estate that belongs to non-resident, but who lives in the territory of Ukraine.
STAU insists that lease of property that belongs to non-resident individual under subclause 9.1.3 of the Law No.889 “On individuals’ Incomes Tax” must be exercised only by the permanent representative office registered by such a non-resident in Ukraine or through a Ukrainian legal entity, which represents said non-resident (pursuant to the contract). Any other procedure for lease will be considered by STAU as tax evasion.
Herewith the Ukrainian legal entity – is considered as a tax agent and in civil contracts with non-residents it is not allowed to state cautions about taking on payment of tax commitments by the tenants of said real estate (according to part 2 of Article 21 of said Law).
Tax rate in such operations is calculated according to clause 7.3 of Article 7 of said Law. This rate is also applied to investment incomes obtained by non-residents from sources in Ukraine.
STAU insists that lease of property that belongs to non-resident individual under subclause 9.1.3 of the Law No.889 “On individuals’ Incomes Tax” must be exercised only by the permanent representative office registered by such a non-resident in Ukraine or through a Ukrainian legal entity, which represents said non-resident (pursuant to the contract). Any other procedure for lease will be considered by STAU as tax evasion.
Herewith the Ukrainian legal entity – is considered as a tax agent and in civil contracts with non-residents it is not allowed to state cautions about taking on payment of tax commitments by the tenants of said real estate (according to part 2 of Article 21 of said Law).
Tax rate in such operations is calculated according to clause 7.3 of Article 7 of said Law. This rate is also applied to investment incomes obtained by non-residents from sources in Ukraine.
14.06.2010
State Tax Administration of Ukraine (hereinafter STAU): which factoring is not subject to VAT
The STAU has clarified some matters of factoring services subjects to VAT.
Under laws of Ukraine, taxation of factoring services operations directly depends on the subject of allocated debt. Debt trading for money and securities are generally not subject to VAT (subclause 3.2.5 of VAT Law), but factoring as well as requirements collection is an exception.
On the other hand, there are exceptions to the factoring imposing: those are the cases when allocated debt is expressed in currency, securities as well as compensation ones (certificates), investment certificates, mortgage certificates with fixed incomes, housing checks, land booms, derivatives.
Factoring operations with other objects are the subject to VAT in the established order. “Funds” as an object to debt shall exempt factoring operation from VAT not only by the primary, but by all further bonds retreats.
Under laws of Ukraine, taxation of factoring services operations directly depends on the subject of allocated debt. Debt trading for money and securities are generally not subject to VAT (subclause 3.2.5 of VAT Law), but factoring as well as requirements collection is an exception.
On the other hand, there are exceptions to the factoring imposing: those are the cases when allocated debt is expressed in currency, securities as well as compensation ones (certificates), investment certificates, mortgage certificates with fixed incomes, housing checks, land booms, derivatives.
Factoring operations with other objects are the subject to VAT in the established order. “Funds” as an object to debt shall exempt factoring operation from VAT not only by the primary, but by all further bonds retreats.
02.06.2010
The minimum amount to which the size of the capital of the limited liability company can be decreased
In the letter No. 4573 dated 13 April 2010 the State Committee for Entrepreneurship considered the threshold level, to which authorized capital of a limited liability company (“LLC”) can be decreased.
Currently, the capital of a LLC at its registration cannot be less than the minimum wage in force (Article 52 of the Law “On Commercial Enterprises”). However, this rule applies only starting from the end of 2009. Therefore, it is not clear whether the LLC, established in the time, when the law stipulated much bigger amount of the capital, can now reduce the authorized capital to the amount equalling to minimum wage?
The law does not contain any rules regarding liquidation of the LLC, if the LLC’s charter capital is reduced to a level lower than the level set by law. However, this rule can be applied on the basis of Article 8 of the Civil Code of Ukraine under analogy of law.
The State Committee for Entrepreneurship has assumed that the authorized capital of a LLC can be reduced to minimum size, which was provided by law at the time of such a LLC registration, and that assumption was supported by the Ministry of Justice of Ukraine in its Letter No. 3245-0-33-10-19 dated 01 April 2010.
It should be also noted that under Article 144 of the Civil Code of Ukraine reduce of authorized capital must be accompanied by the respective notification to all creditors of the LLC. The latter thus shall have the right to demand early termination or fulfilment of obligations of the LLC as well as payment of any damages.
Currently, the capital of a LLC at its registration cannot be less than the minimum wage in force (Article 52 of the Law “On Commercial Enterprises”). However, this rule applies only starting from the end of 2009. Therefore, it is not clear whether the LLC, established in the time, when the law stipulated much bigger amount of the capital, can now reduce the authorized capital to the amount equalling to minimum wage?
The law does not contain any rules regarding liquidation of the LLC, if the LLC’s charter capital is reduced to a level lower than the level set by law. However, this rule can be applied on the basis of Article 8 of the Civil Code of Ukraine under analogy of law.
The State Committee for Entrepreneurship has assumed that the authorized capital of a LLC can be reduced to minimum size, which was provided by law at the time of such a LLC registration, and that assumption was supported by the Ministry of Justice of Ukraine in its Letter No. 3245-0-33-10-19 dated 01 April 2010.
It should be also noted that under Article 144 of the Civil Code of Ukraine reduce of authorized capital must be accompanied by the respective notification to all creditors of the LLC. The latter thus shall have the right to demand early termination or fulfilment of obligations of the LLC as well as payment of any damages.
