Draft Law of Ukraine

“On Amendment of the Law of Ukraine “On Enterprise Profit Taxation”

This draft offers to somewhat amend the procedure for assessing the amounts of profits gained by subsidiaries, which belong to a taxpayer and shall be paid to relevant budgets.

According to this draft law the amount of the tax on profit of subsidiaries that is to be paid to relevant budgets for corresponding reporting (fiscal) period shall be determined by a taxpayer on the basis of accounting data of the subsidiaries activity.

We’ like to point out, that now the amount of tax on the profit of subsidiaries for a relevant reporting (fiscal) period is assessed by calculation method, i.e. proceeding from the total amount of the tax calculated by a taxpayer divided proportionally to the portion of the amounts of the subsidiaries’ total costs for depreciation deductions calculated on capital assets of such taxpayer, provided they are located on the site of a subsidiary, in a total amount of total costs and depreciation deductions of this taxpayer.

This draft envisages that the law, if adopted, will come into force on January 1, 2004.