RPR EXPERTS CALL FOR THE REFINEMENT OF THE GOVERNMENT DRAFT LAW ON THE IMPLEMENTATION OF THE BEPS ACTION PLAN IN UKRAINE

Experts of the RPR Tax Policy Group support the development of the legislative changes aimed at implementing the Base Erosion and Profit Shifting Plan (BEPS Plan) by the Government and the National Bank of Ukraine. Implementation of the BEPS Plan will be a decisive step in countering illegal withdrawal of the capital from the Ukrainian economy.

Nevertheless, experts argue, Draft Law of Ukraine “On Amendments to the Tax Code of Ukraine for the Implementation of the Base Erosion and Profit Shifting Plan” developed by the Ministry of Finance contains a number of contradictory provisions that may lead to a deterioration of Ukraine’s investment climate and business conditions.

Ukraine has declared its aspiration to join the minimum standard of the BEPS Action Plan, i.e. to implement four BEPS Action Plan steps into the national legislation (namely, No. 5, No.6, No. 13 and No. 14). However, according to RPR experts, the above-mentioned draft law does not comply with the BEPS Action Plan in a number of significant aspects.

  1. The draft law does foresee the implementation of a significant number of regulations into the Ukrainian legislation that are included in the four above said mandatory steps of the Action Plan.
  2. The draft law introduces provisions into the Tax Code not provided for in the BEPS Action Plan which are discretionary. They are likely to increase the pressure on business and significant amend Ukraine’s taxation system. These provisions require additional in-depth analysis.
  3. Moreover, the draft law introduces into the Tax Code the provisions that will be relevant for Ukraine in the future, but cannot be implemented today due to the low institutional development of the state. This mainly concerns the following suggested provisions:

With this in mind, RPR Tax Policy experts call on the Ministry of Finance of Ukraine to finalize the government draft law on the implementation of the BEPS Action Plan in Ukraine taking into account the following recommendations:

RPR experts appeal to the Ministry of Finance with a suggestion to hold an open expert discussion of the above said draft law with the participation of MPs, representatives of business, independent experts and the general public.

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