Source: The Ukrainian Journal of Business Law

On 29 December 2019, the Law of Ukraine No.391-IX of 18 December 2019 On Introducing Changes and Amendments to the Tax Code of Ukraine and Some other Legislative Acts of Ukraine for the Improvement of Excise Tax Administrationcame into force. Law-391 is also known as Draft Law No.2317 of 25 October 2019.

Regardless of violation of the tax fundamentals — the principle of tax legislation of Ukraine, stipulated in Article 4.1.9 of the Tax Code of Ukraine, establishing the principle of stability of the tax legislation of Ukraine, which in particular was addressed twice by the Main Legal Department of Verkhovna Rada providing conclusions to Draft Law-2317 prepared for adoption in the first and second readings. It should be acknowledged that in general terms Law-391 is aimed at improving and developing administration of the excise tax regarding the supply of fuel and ethanol, the operation of the electronic administration system for the sale of fuel and ethanol (hereinafter — SEA SF&E), simplifying licensing conditions for businesses.

Law-391 is a positive signal for market players, as it introduces certainty about a number of legislative provisions, improves the conditions of the tax regulation of relations in the market of fuel and ethanol alcohol. Thus, in particular: the terms and procedure for applying penalties for violation of the rules of accounting, production, and circulation of fuel or ethanol in excise warehouses were revised; the requirement to equip tank meters for the production of fuel during the purification of coke oven gas was abolished; the period was increased from a total of 90 days to 270 days of repayment of a promissory note for aviation gasoline; the deadline for introduction of the system of comparison between flowmeters and SEA SF&E was postponed from 1 January to 1 July 2019, etc.

Law-391 introduced relevant changes and amendments not only to the Tax Code, but also to other laws of Ukraine that regulate these relations. That is, Law of Ukraine No.2628-VIII of 23 November 2018 On Amendments to the Tax Code of Ukraine and Some other Legislative Acts of Ukraine concerning Improvement of Administration and Revision of the Rates for some Taxes and Duties and Law of Ukraine No.481/95-VR of 19 December 1995 On the State Regulation of Production and Circulation of Ethyl Alcohol, Cognac and Fruit Spirits, Alcoholic Beverages, Tobacco, and Fuel.

Taras Koval, Senior Manager, KPMG in Ukraine