Law № 403-VII took effect on 4 August

On 04.08.2013 Law of Ukraine of 04.07.13 № 403-VII «On Amendments to the Tax Code of Ukraine and other laws of Ukraine concerning real estate» came into force. This law determines that the amount of advance payments of income tax specified in p.153.3 decreases at the amount of advance payments of income tax upon payment of dividends under this paragraph. If the amount of advance payments for income tax paid at payment of dividends exceeds the amount of advance payments of income tax, the excess amount will be credited in the reduction of advance payments in the next reporting month until its full repayment. Tax Code for those paying advance payments in p.152.9 GCC defines the tax reporting period is the year. Defaulters of advance payments still have a quarter, half, three quarters and year.

The amendments to the Tax Code (Law № 407-VII of 04.07.2013), which came into force on 08.03.2013, stipulate that the state settles debts on the VAT via promissory notes. VAT refunds by promissory notes can now be carried out only with the consent of the taxpayers. The latter have to file appropriate applications. Amendments to the Tax Code contain a provision allowing for extension of maturity of the notes, again, allegedly only at the request of the taxpayer. Besides, the notes can be sold, but possibly only to specifically designated companies, and at a considerable discount. However, the Cabinet's securities will also be paying other taxes, but only after their maturity. According to the innovation, the amount owed for VAT refunded through promissory notes is divided into five equal installments, to each of which the bill is issued with maturity of one, two, three, four and five years. At the same time the profitability of each bill is not separately defined, the only norm stipulated is that it should not exceed 5%. Most likely, the only possible option is to use promissory notes for paying taxes. However paying the state for tax obligations with a promissory note is possible only following its maturity. Problems can arise with the payment of income tax with promissory notes, as difficulties are already emerging in offsetting overpayment of income taxes at the expense of advance payments. Tax officers arbitrarily interpret the provisions of the second paragraph p.87.1 of the Tax Code, according to which the payment of monetary obligations or repayment of taxpayer's debt may be made at the expense of overpaid tax amounts. Tax officers believe that «may» does not mean «will be done». Thus, everything depends on whether the controlling body will admit this «may» in reality.