Draft Law of Ukraine

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

The draft stipulates that the date of increasing gross expenditures shall be the date, which falls on the tax period when any of the following events took place earlier:

• either the date of writing off funds from bank accounts of the taxpayer for payments for goods (works, services), in case of purchasing them for cash – the date of their release from the taxpayer's cash-desk;
• or the date when the taxpayer accepts the goods, for works (services) – the date when the taxpayer actually obtains results of works (services).

The above-mentioned procedure for determining the date of increasing gross expenditures shall be applied to residents that:

• for one part of their economic activity pay enterprise profit tax at the rate lower than 25% or pay this tax within the unified or fixed tax or are exempted from payment of this tax or are not subject of this tax according to the legislation;
• for the other part of their economic activity pay enterprise profit tax on general grounds and keep separate tax accounting of expenditures and incomes.

However, the draft states that the above-mentioned procedure for determining the date of increasing gross expenditures is applied only to that part of economic activity, for which the taxpayer pays the tax on general grounds and keeps separate tax accounting of expenditures and incomes. In other cases the date of increasing gross expenditures shall be the date when the taxpayer accepts goods (in case of import – also works (services), goods accompanying or auxiliary to such import), for works (services) – the date of their actual reception from such persons, regardless whether there's been payment for them (including partial or advance).

The draft is called for to regulate the issue related to taxation with profit tax for enterprise, whose economic activity is taxed at different tax rates.