TAX CODE OF UKRAINE. WHAT CHANGED? QUESTIONS AND ANSWERS | UKRBUSINESSCONSULT

What changed in the corporate income tax rules

The Tax Code of Ukraine substantially changed the procedure for taxing corporate profit. The legislature intended the new rules to remove differences between tax and accounting records in recognising and measuring income and expenses.

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At the same time, the reform was intended to increase budget revenue and restrict arrangements used to minimise tax payments.

Concepts familiar under the previous system, such as gross income, gross expenses and the "first event", were being left behind. The historical material identifies 1 April of the relevant year as the transition date to the new model.

Expenses began to be linked to sale of manufactured products, goods or services to the buyer or to signing an act confirming completed work. The purchase of goods, raw materials, materials or services itself no longer increased the enterprise's expenses until the goods were sold or the manufactured products were realised.

At the same time, advances received were not included in income until the goods or products were shipped or a document confirming completion of work or provision of services was signed. This shifted the tax focus from movement of money to the actual business transaction and its documentary completion.

The relevant provisions were discussed in more detail in the Tax Code review.

The new rules of Section III of the Tax Code applied from the date stated in the source material. For the preceding period, reporting was prepared using the previous forms and under the Law on Taxation of Enterprise Profits.

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