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Ukrainian court allows defining salary in foreign currency

Parties to an agreement can denote the size of salary in Ukrainian hryvnias with an equivalent in foreign exchanges in accordance with the Civil Code
16:48, 9 July 2019

Open source

The Supreme Court of the Third Court Chamber of the Cassation Civil Court adopted a regulation which allows defining salaries of Ukrainians in foreign currency. Thus, the regulation provides that all the payments on the territory of Ukraine should be paid in national currency, however, the usage of foreign currency in different settlements is not forbidden.

Related: Ukrainian currency exchange rate not to change due to Russian sanctions on exports, - National Bank

Particularly, in the case under consideration, the labor contract of the first edition provides for using the Euro exchange rate on the payday with a defined level of wages. Due to these circumstances, the salary of vice director of a company equaled to 7.872 Euros in hryvnias on the payment date.

Related: Currency liberalization: What will population and business benefit?

The court declared the arguments of cassation compliance related to the offense of Internal Revenue Code during the performance of regulations in additional agreement and obligation to pay punitive sanctions were unreasonable, as the procedure of payroll accounting was not changed. Consequently, the Euro exchange rate on the payday was to be applied during the whole period of work arrangements between the parties, defining the level of salary in Ukrainian hryvnias.

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