On March 30, the Parliament adopted the Law of Ukraine “On amendments to certain legislative acts to provide supplemental social and economic guarantees in relation to the spread of coronavirus disease (COVID-2019).” On April 2, the President signed the Law, so we could tell you the changes it established:
- Exemption from the rent payment for the quarantine period.
If to interpret the adopted text literally, the Parliament exempts everyone from rent payment without any exceptions and additional terms. However, this was done in a quite peculiar way: with reference to Part 6 Art. 762 of the Civil Code of Ukraine, under which such exemption is possible subject to a condition when the leased property cannot be used by the tenant due to circumstances, for which the latter is not responsible.
Currently, there are no official explanations as to how such exemption will be applied – in compliance with the requirements of Part 6 Art. 762 of the Civil Code of Ukraine or without these. But it is already clear that proving the impossibility of using leased property will be difficult because the quarantine has been relatively mild till recently and did not contain any prohibitions targeted at IT business.
- Prohibition to banks to raise interest rates under credit agreements during the quarantine period.
- Reduction of the period of exemption from land fees and real estate tax payment.
Parliament has reduced the period, during which (i) no fee will be charged for land, and (i) non-residential property other than land plots will be exempted from property tax for exactly one month – until March 31.
- Increase of limits for individual entrepreneurs – single taxpayers of group III up to UAH 7 million, and for payers of group II – up to UAH 5 million.
- Extension of the period, during which a desk audit may be carried out.
Currently, a desk audit of the tax return filed or refined calculations for March-May, except for VAT tax return and settlements, can be carried out within 60 calendar days from the last day of their filing, or, if filed significantly later, from the day of their actual filing.
- Terms extension in relation to a moratorium on office audits and exemption from liability for violations in relation to charging and payment of UST (Unified Social Tax) until 31 May.
- Exemption from liability for late disclosure of financial statements.
The adopted law exempts persons responsible for filing and disclosing of financial statements from liability for violation of terms for disclosure of financial or consolidated financial statements for 2019 along with the audit report if these are disclosed during the quarantine period or within 90 calendar days following its completion (but not later than December 31, 2020).
- Introduction of “flexitime” and “remote (home) work” concepts.
Both regimes are usually set upon agreement between the employee and the employer, but in exceptional cases, in particular, at the time of the threat of an epidemic or pandemic spread, these may be set by the employer's decision.
- Provision of partial unemployment allowance for the quarantine period.
Such allowance will be provided by the State Employment Service to small and medium-sized enterprises, forced to reduce the production and business hours of their employees as a result of taking preventive measures and keeping from the epidemic spread for implementation of the relevant decision of the local state administration, to be paid to their employees. The allowance will be provided within the minimum living wage amount.
- The obligation to pay the employee for idle period, including that during the quarantine period.
According to the law, the idle period occurred through no fault of the employee during the quarantine period must be paid at a rate of at least two-thirds of a wage rate determined for such an employee.
Moreover, temporarily, for the period of quarantine, the limitation period and some other terms as established by the Civil, Economic and Tax Codes of Ukraine are extended. The same applies to most of the terms set in procedural laws: civil, economic, administrative and criminal ones.
Finally, it should be noted that from now on, no adjustments to the financial result for the purposes of corporate income tax shall be applied to the amount (cost) of charitable aid aimed at combating coronavirus. Moreover, such amounts are included in the personal income tax rebate in full.