Ukraine launches generous tax exemption scheme

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The government in Ukraine has started the year with a generous tax exemption not having to pay corporate income tax and value-added tax (VAT) from January 17th 2014 for three months. The absolution also covers VAT refunds claimed wrongly as well as deductions against income tax.
The government in Ukraine has started the year with a generous tax exemption not having to pay corporate income tax and value-added tax (VAT) from January 17th 2014 for three months. The absolution also covers VAT refunds claimed wrongly as well as deductions against income tax. It will offer taxpayers making a full declaration excluding them from paying financial, administrative, and criminal penalties, as long as 5% of the outstanding tax amount is paid. The remaining 95% will be waived and there will be no penalties or interest charged.

Igor Bilous, who currently runs Ukraine’s State Fiscal Service, states ‘the bill has come in response to requests from businesses that want to turn the page and start working transparently. Due to the Association Agreement with the EU and the opportunities it opens for Ukrainian businesses, I believe that this tool will be a huge benefit to many companies’.

The government said that the exemption raises a unique opportunity for companies to regularise their tax position, therefore enabling them to operate legitimately in future. It is intended to usher in an improved tax culture in Ukraine and enable companies in need to obtain financing easier and therefore lift the economy.