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Ukraine introduces e-residency and 5% single tax for non-resident individuals
On October 6, 2022, the Law of Ukraine No. 2654-IX "On Amendments to the Tax Code of Ukraine and some other laws of Ukraine regarding the taxation peculiarities of electronic residents’ business activities" was adopted. It will enter into force on April 1, 2023. The Law introduces a special status for foreign individuals who are not Ukrainian tax residents allowing them to carry on business activities without the need to be present in Ukraine. For these purposes the e-resident will be able to open a bank account, obtain an electronic digital signature and register as a private entrepreneur remotely. Download in English: Download in Ukrainian:
183 days of war in Ukraine: Tax considerations for refugees and their employers
The war in Ukraine has now passed the 183-day mark. This unfortunate milestone is a reminder to employers with a dispersed workforce of Ukrainian refugees to take a look at the status of these employees. Under many tax treaties mirrored after the OECD Model Treaty, the 183-day period implicates a significant threshold: individuals temporarily present in the treaty-party country (the Host Country) may be taxed by that country on income for personal services performed there if the individual resides in the Host Country for over 183 days in a given tax year. This is called the 183-Day Rule. Few European countries have issued guidance on how they intend to apply the 183-Day Rule to Ukrainian refugees. Although one
Questions and answers about the special single tax system during the martial law on the territory of Ukraine
Special single tax system rules have been introduced by Law of Ukraine No. 2120-IX as of 15 March 2022 (effective starting 17 March 2022) and by Law of Ukraine No. 2142-IX as of 24 March 2022 (effective starting 5 April 2022). We have prepared a brief overview of some key questions and answers to address the following: Commencement date and period Changes introduced for single tax payers in groups I and II Changes introduced for group III of single tax payers VAT issues for group III single tax payers Registration and exit issues Restrictions Download in English: Download in Ukrainian:
Ukraine: Temporary lifting of requirements for Diia City residents
At the beginning of 2022, a special legal and tax regime for Ukraine-registered tech companies called Diia City became fully operational [for more details please see our overview of the Diia City regime]. Ukrainian tech companies are required to comply with a number of requirements to become Diia City residents and maintain their residency. Due to the introduction of martial law in Ukraine on 24 February 2022, the Cabinet of Ministers of Ukraine has temporarily lifted a number of requirements. Download in English: Download in Ukrainian: For more information, please contact: Illya
Kinstellar announces new promotions to Partner and Counsel
Kinstellar is delighted to announce the promotions to Partner of Nina Tsifudina (Sofia) and to Counsel of Atanas Mihaylov (Sofia). PARTNER Nina Tsifudina, Sofia Nina has over 14 years of experience advising on large international transactions. She is counsel to local and multinational companies on a wide range of commercial matters and cross-border deals, reorganisations and market-entry strategies, with a focus on the TMT, pharma and financial services sectors. She also represents private equity and venture capital firms on acquisitions, disposals and restructurings, as well as portfolio companies on all corporate matters. Nina is highly experienced in all employment aspects of multi-jurisdictional
Special single tax system during the martial law on the territory of Ukraine
Special single tax system rules have been introduced by Law of Ukraine No. 2120-IX as of 15 March 2022 (effective starting 17 March 2022). We have prepared a brief overview of some key questions and answers to address the following: Commencement date and period Changes introduced for single tax payers in groups I and II Changes introduced for group III of single tax payers VAT issues for group III single tax payers Registration and exit issues Restrictions Download in English: Download in Ukrainian:
Taxation of e-services provided by non-Ukrainian residents
Ukraine has introduced special VAT taxation rules for electronic services. Starting from 1 January 2022, non-Ukrainian residents providing e-services to individuals in Ukraine will have to register as VAT payers in Ukraine and charge 20% VAT on their local supplies of e-services. Please refer to the infographics below with the legislative novelties based on the provisions of the new law and new rules to come in place. Download infographics in English: Download infographics in Ukrainian: For more information, please contact: Illya Sverdlov, Partner and Head of Tax
Ukraine: Tax law required for Diia City regime to go live has been adopted
Ukraine is strengthening its position as an IT hub of choice by adopting new legislation aimed at creating favourable tax and legal conditions for tech companies operating in the country and fostering further investment in the sector. On 14 December 2021, the Ukrainian parliament adopted draft law No. 5376 “On amendments to the Tax Code of Ukraine regarding the Stimulation of the Development of the Digital Economy in Ukraine”, which sets out the tax treatment under the Diia City regime. Together with the previously adopted draft law No. 4303 “On the Stimulation of the Development of the Digital Economy in Ukraine”, this marks the launch in Ukraine of the special legal regime called “Diia City”.
Kinstellar advises Vista on acquisition of Crello and Depositphotos
Kinstellar’s Kyiv office has successfully represented Vista, a Cimpress company (Nasdaq: CMPR), the world leader in mass customization, on its acquisition of the online graphic design editor Crello and a stock photo marketplace Depositphotos for a total price of USD 85 million. The acquisition includes Crello, a rapidly-growing, global leader in do-it-yourself (DIY) digital design. Crello, now rebranded under Vista as VistaCreate, offers a platform that makes it easy for small businesses to enhance their social media and digital design, no matter their design experience. As part of the acquisition, Vista has also acquired Depositphotos, a stock content marketplace with more than 200 million royalty-free images
Ukraine Roundtable: "Tax amnesty: how to pass without stumbling"
Roundtable: "Tax amnesty: how to pass without stumbling", 29 September 2021 At the start of September, Ukraine introduced a voluntary declaration of income and tax amnesty scheme that will last one year. Who should declare, and what should you declare? How to do it? What are the risks associated with the voluntary disclosure of income? Until 1 September 2022, Ukrainian citizens and residents will be able to openly declare to the state their real earnings, in particular income on taxes were never before paid. Format: Roundtable with video broadcastDate and time: 29 September, 10:00–12: 00Venue: CEO Club, 23 Butyshiv Lane, KyivModerator: Dmytro Boyarchuk, Executive Director of "CASE Ukraine" Speakers:
“Diia City”: A special legal and tax regime for IT companies in Ukraine is coming into play
On 14 August 2021, the Law “On Stimulation of the Development of the Digital Economy in Ukraine” No. 4303 (“Diia City Law“) came in force. Diia City legal framework The Diia City Law introduces a general framework for launching a special IT industry regime in Ukraine called Diia City, which is aimed at creating favorable conditions for companies operating in the tech sector. The regime will be valid for an unlimited period but not less than 25 years. The status of a Diia City resident will be available only to Ukrainian companies that meet the criteria provided by the Diia City Law, in particular: the minimum average monthly remuneration of employees / gig workers is EUR 1,200;
Czech Republic attempts to make approval of state aid measures conditional on the absence of links to non-cooperative jurisdictions
The fight against the so-called tax havens has been a major ongoing issue both at the European Union level and also for Member States. A list of non-cooperative tax jurisdictions has been maintained by the EU since 2017. The battle against tax havens is also directly impacting the way state financial support is provided in the European Union. In July 2020, the European Commission issued Recommendation 2020/139 on making State financial support to undertakings in the European Union conditional on the absence of links to non-cooperative jurisdictions (the “Recommendation”). Pursuant to the Recommendation, EU Member States adopting measures to provide financial support to eligible undertakings in their jurisdiction will