Draft Law of Ukraine

"On Amendment of the Law of Ukraine "On Enterprise Profit Taxation""

This draft was introduced into the Verkhovna Rada to ensure formation of 2003 budget revenue part.

This draft contains new definitions of the following terms:

• “usual price”;
• “financial aid”;
• “engineering”
• “main activity”

According to this draft proceeds from sales of goods at prices 10 percent lower than the usual prices shall not be included into gross revenue.

This draft stipulates that if the fiscal year results show that a taxpayer has incurred losses than he shall be allowed to reduce next year tax assessment basis by the relevant amount. If these losses remain unpaid next year the debt may be redeemed within the next five years. However, the amount allowed for redemption shall not exceed 40 percent of the determined tax assessment basis.

A new order is established for dividend taxation. According to this order taxpayer who pays dividends to its shareholder (owners), excluding dividends on shares of non-residents and state-owned stakes, shall assess and deduct 15 percent of the calculated sum to pay tax. Payment (transfer) of dividends on state-owned shares shall be done in accordance with the order established by the Cabinet of Ministers of Ukraine.

This draft provides for amendment of the procedure of assessment of depreciation charges. Capital assets are divided into six groups. Rates of depreciation charges are set forth for each group.

According to this draft law the norm envisaging non-inclusion into the composition of the gross revenue of excise duty that results from the product sale price shall be deleted from the Law On Enterprise Profit Taxation.