On September 1, the law on “tax amnesty” has come into force in Ukraine. It was approved by the Verkhovna Rada on June 15, 2021. The document foresees that a one-time voluntary declaration of assets of citizens will take place during the period from September 1, 2021, to September 1, 2022.
The citizens will have to pay a one-time 5% fee from the currency assets placed in accounts in the banks in Ukraine. Alternatively, the taxpayer can choose the taxation rate of 6%; in this case, the tax liability will have to be paid in three equal parts annually.
The law defines the taxation rate of 9% in terms of the currency assets placed in foreign banks or stored in foreign financial establishments. Alternatively, the taxpayer can choose the taxation rate of 11.5%; in this case, the tax liability will have to be paid in three equal parts annually.
The 2.5% taxation rate is used on a notional amount of the bonds of Ukraine with the maturity of over 365 days without the rights of early payment and purchased by citizens from September 1, 2021, until August 31, 2022, until the provision of the voluntary declaration. Alternatively, the taxpayer can choose the taxation rate of 3%; in this case, the tax liability will have to be paid in three equal parts annually.
To declare cash, it should be placed at the special bank account before the provision of the special declaration.
Let’s consider it more detailed.
What is the voluntary declaration?
The single (special) declaration is the special order of the voluntary declaration by the citizens of the assets situated in the territory of Ukraine and/or outside it if such assets were received as the result of the income that fell under taxation in Ukraine in the moment of obtaining and from which the taxes were not paid or were paid not in the full volume in accordance with the current legislation and/or international agreements.
Who can declare assets?
The resident individuals of Ukraine, as well as non-resident individuals who were residents at the moment of obtaining of the assets, can file the single voluntary declaration.
Who cannot file a voluntary declaration?
It is banned to file the declaration for:
- underage/minor, incapable or people with restricted capacity;
- people who fell under sanctions in Ukraine;
- citizens, who filed or have to file the declaration in accordance with the laws since January 1, 2005, defining or defined the legal and organizational grounds in the sphere of corruption prevention (except those, who pretended or pretend to occupy positions that demand the provision of the relevant declaration and were not appointed or selected for relevant positions).
What Ukrainians should mention in the single voluntary declaration?
In the single voluntary declaration, a person can mention: currency values (excluding cash); security papers; personal and real property, including objects of unfinished construction; shares (equity units) in the property of companies registered (situate) in Ukraine or abroad.
Moreover, it is not necessary to mention information about sources of declared assets.
What cannot be the object of declaration?
It is impossible to include the next categories in the declaration: cash; assets received as the result of the criminal offenses (except assets received from evasion of the payment of taxes and fees or violation of currency legislation); assets of the citizens against whom the criminal proceedings are opened due to the “legitimization of income received by the criminal way” and “financing of terrorism”.
The assets that do not require the filing of special declaration:
- flats up to 120 square meters or property rights for such flat:
- houses up to 240 square meters or unconstructed house of the same square (in case of presence of right for the land plot);
- non-residential buildings of uncommercial purpose or unconstructed houses of the uncommercial purpose of up to 60 square meters;
- land plots with the square that do not exceed the norms of free handover;
- one car of personal non-commercial use that was owned by a person at the moment of declaration. It does not concern the personal vehicle for transfer of 10 and more people; a car with the volume of engine of at least 3,000 cubic cm or comparative costs of over 375 minimal wages; motor-cycle with the volume of engine of at least 800 cubic cm, plane, helicopter, yacht or boat;
- other assets which total price does not exceed 400,000 hryvnias ($14,818.61).
The guarantees to subjects of declaration
The subjects of voluntary declaration, in case of payment of single tax, should be released from responsibility for violation of tax and currency legislation.
Besides, criminal responsibility is provided for illicit disclosure, transfer, or provision of access to information mentioned in the voluntary declaration.
It will be banned (except the cases established by the law) to use information from such declaration in the investigation or checks against the filer as the evidence in the criminal processes, cases on the administrative violations, civilian and administrative cases.
The payment of the single declaration is held by the filer for 30 days since the filing of such declaration.
The fee from a single (special) voluntary declaration is paid to the income of the fund of the State Budget of Ukraine.