On December 27 the Government approved a number of initiatives of the Ministry of Economic Development and Trade of Ukraine.

The Ministry of Economic Development and Trade of Ukraine proposes to cancel import duty on yarn

The Government approved the draft Law of Ukraine On Amendments to the Customs Tariff of Ukraine. The Ministry of Economic Development and Trade of Ukraine proposes to reduce the rate of preferential import duty on yarn (single-, multi-threaded, and cotton-mixed) from 4% to 0%. Such a decision will allow the Ukrainian manufacturers to gain additional working capital in the amount of about UAH 4 million. It is expected that the implementation of the decision will increase the production of yarn and fabric in Ukraine by 17%.

The draft Law will be submitted to the Verkhovna Rada for review.

The Government approved the list of goods which import and export is subject to licensing in 2019

The Government approved the list of goods which export and import is subject to licensing and the volume of export quotas in 2019. The lists of goods and quotas are identical to those in 2018. Thus, in particular, export quotas for raw gold and silver (other than bank metals) and precious metal scrap remain at the level 0 grams. Also, according to the decision of the National Security and Defense Council dated February 16, 2017 “On urgent measures to neutralize the threats to Ukraine’s energy security and enhance the protection of critical infrastructure”, the licensing of anthracite export will continue in 2019.

In addition, according to the Montreal Protocol on substances that deplete the ozone layer, export and import of ozone depleting substances and goods that may contain ozone depleting substances will be subject to licensing in 2019.

The rate of deduction of a part of the net profit by Printing Plant “Ukraine” will remain at 40% until 2020

According to the proposal of the Ministry of Economic Development and Trade of Ukraine, the Government extended until December 31, 2019 the Resolution, which allows Printing Plant “Ukraine” to deduct to the state budget 40% rather than 75% of net profit. Such rate will only apply if the Printing Plant directs 35% of net profit for modernization and procurement of equipment for production of national passports and ID-cards for Ukrainian citizens.

Such solution will allow an uninterrupted and prompt production of biometric documents for Ukrainians.

The Government extended the VAT exemption for metal scrap operations until 2022

According to the proposal of the Ministry of Economic Development and Trade of Ukraine, the Government extended the Resolution of the Cabinet of Ministers of Ukraine No. 15 dated January 12, 2011. Thus, the supply operations (including import operations) of waste and scrap of some ferrous and non-ferrous metals are exempted from value added tax until January 1, 2022.

It is expected that the extension of the VAT exemption regime will increase the competitiveness of Ukrainian metal products.

The list of scrap and waste of ferrous and non-ferrous metals which are subject to Resolution No. 15 is available at: http://zakon.rada.gov.ua/laws/show/15-2011-п

The Government included Trinidad and Tobago, Namibia and Palau in the list of offshore zones

The Cabinet of Ministers of Ukraine included Trinidad and Tobago, Namibia, Guam, Palau and American Samoa in the list of offshore zones.

Ukraine periodically updates the Ukrainian list of offshore zones based on the information of the global forum for transparency and information exchange for tax purposes of OECD. The forum has formed a “black list” of states that are not willing to cooperate in tax matters and do not implement the OECD standards, which list included specified countries.

The decision will allow preventing and counteracting the legalization (laundering) of proceeds from crime, as well as financing of terrorism and proliferation of mass destruction weapons.

The current list of offshore zones is available at: http://zakon.rada.gov.ua/laws/show/143-2011-р

International organizations and embassies will be able to engage the Ukrainian consulting companies for keeping record of labor books

The Government provided an opportunity for international organizations, foreign diplomatic missions, consular institutions and international technical assistance projects to engage the Ukrainian legal entities for keeping record, storage and issuance of labor books. This will reduce the administrative burden on international representative offices and stimulate the development of the consulting services market.