On the 1^st of April 2014 new law № 1166 -VII

«On prevention of financial catastrophe and creating prerequisites for economic growth in Ukraine"  came into force.

Reference : http://search.ligazakon.ua/l_doc2.nsf/link1/T141166.html

 Major changes are in particular:

From the 1^st of April, 2014:

- Approved permanent basic rates: the corporate income tax rate - 18 % value added tax - 20%;

- Import of medicines and medical products will be taxed at the rate of 7 %;

- Reduced tax-free value of goods which are transported like import by international mail.

Before it was -  300 euros, now will be - 150 euros;

- Doubling the excise tax of new cars and motorcycles with an engine capacity exceeding 0.5 liters ;

- Set only one rate of excise tax on diesel fuel (€ 98 per 1000 kg) instead of differential rates depending on the sulfur content (before was - from 46 € to 98 € per 1000 kg) .

- The basis of taxation on real estate will be the total area of ​​residential property instead of living area  (look at ;

- Introduced tax for state pension insurance at the rate of 0.5%  for  operations of purchase foreign currency by legal entities and individuals (non-cash and/or cash).

From the 1^st May, 2014 :

- Increased rate of excise tax on beer  by 42.5% ;

 - Cancelled special procedure for calculating pensions  in amount of 80 % of salary for judges, prosecutors and civil servants.

From the 1^st July,  2014 :

 - Introduced  progressive scale  for  passive income (namely, dividends, interest, royalties, investment income) –  will be 15%, but necessary to do annual recalculation of all such income and IF WHOLE PASSIVE INCOME WITHIN YEAR will be  how its written below – FINAL rate will be  15%, 20% or 25%.

So,

15% - if  passive income is not more than 204 living wages ( in 2014  - its  248 472,00 UAH )

20% - if the amount of passive income is from 204 to 396 living wages ( in 2014 – it’s  from 248 473,00   UAH  to 482 328, 00 UAH)

25% -  if the income is more than 396 living wages (in 2014  - its more than 482 329,00 UAH);

After  an annual recalculation of accrued tax payable is reduced by the amount that was already deducted as tax agents. The result of  positive difference the tax payer should includ in the annual tax declaration.

- Retirement benefits that are larger than 10 thousand UAH  will be subject to income tax -  rate of 15% (17) % of the excess amount;

- Increases the excise tax on tobacco products by 31.5 %.