Draft Law of Ukraine

"On Amendment and Addition of Some Laws of Ukraine Related to Non-Governmental Pension Provision"

The draft suggests amendments to some laws on taxation related to approval of the Law of Ukraine "On Non-Governmental Pension Provision".

According to amendments suggested to the Law of Ukraine on "Enterprise Profit Tax", the employer shall have the right to decrease taxable income of employees by the amount of expenditures on fees to non-governmental pension funds in favor of the hired personnel. The maximum amount of such fees can not exceed 15% of salary of the taxpayer’s employees.

Apart from that, the draft envisages exempting from taxation profits from transactions with assets of non-governmental pension funds and credit unions, including passive incomes.

Amendments to the Law of Ukraine "On Value Added Tax" envisage exempting from payment of value added tax services on administering non-governmental pension funds rendered by a professional administrator.

Apart from that, the draft introduces amendments to the Law of Ukraine "On Personal Incomes Tax", which determine the procedure for taxing pension payments from non-governmental pension funds. The amounts of pension payments to a non-governmental pension fund participant, aged at least over 70 or having the right to obtain pension due to disability group I, shall be exempted from taxation.

The draft, if approved, will permit encouraging natural persons and their employers to participation in the system of non-governmental pension provision and also creating conditions for accumulation of powerful investment resources in pension funds and insurance companies.