Home >
All publications
International activity
16 September 2020, 12:02
Reduce VAT on dairy products and ratify transport simplification agreements
At its meeting on September 16, the
Committee on Ukraine's Integration into the EU considered draft laws
proposing these initiatives.
The Committee decided to support three drafts on ratification of international agreements on transport facilitation. These are: the draft Law No. 0059 on ratification of the Agreement between Ukraine and Montenegro on international road transport of passengers and goods; Draft Law No. 0060 on Ratification of the Protocol between Ukraine and Belarus on Amendments to the Agreement on International Road Transport. Both documents provide for the ratification by Ukraine of agreements aimed to simplify the procedure for freight and passenger transportation, in particular to carry out such transportation without special permits. The third draft on ratification is draft Law No. 0061 between Ukraine and Qatar on amendments to the Air Services Agreement. Ratification of this Protocol will eliminate restrictions on the number of flights and capacity and (or) types of aircrafts. The Committee recommended that the Main Committee submit these three draft laws to the Verkhovna Rada of Ukraine for adoption as a basis and as a whole.
The Committee recognized the following drafts as consistent with the EU law and Ukraine's international obligations:
- the draft Law No. 3479. The document proposes to ban the creation, support and advertising of financial pyramids in Ukraine and to establish criminal liability for organizing or facilitating the financial pyramids. The Committee concluded that the document complied with the EU law.
- the draft law No. 3541 got the same conclusion. It proposes to increase the amount of cash transfers within Ukraine to the 1000 euros equivalent without identification and verification of a payer.
- the draft Law No. 3364-1, in the Committee’s opinion, also does not contradict the EU law. The draft aims to regulate the certification of the electricity transmission system operator according to the ISO separation model. This model assumes that the system operator uses property of the integrated power system of Ukraine, while this property remains in the ownership of the state. The members of the Committee also noted that Ukraine should consult with the European Commission on the compatibility of the bill with the EU law. This procedure applies to all “energy” bills, according to the requirement of paragraph 5 of Annex XXVII-A of the Association Agreement between Ukraine and the EU.
- the draft Law No. 3775 on amendments to the Tax Code of Ukraine to reduce the value added tax rate for milk and dairy products. The document proposes to reduce the VAT rate to 10% on dairy products and raw materials for their production. According to the Committee, it does not contradict Ukraine’s international legal obligations, but needs to be modified in order to comply with the principle of legal certainty, stability and predictability of tax legislation.
- the draft Law No. 3528 and the alternative — draft Law No. 3528-1. Both aim to amend existing legislation in the field of preventing and combating money laundering, terrorism financing and the financing of the proliferation of weapons of mass destruction. The Committee advised that the draft Law No. 3528-1 should be modified to take into account the provisions of Directive (EU) 2015/849 of the European Parliament and of the Council of May 20, 2015.
- the draft Law No. 3877 on Amendments to Certain Legislative Acts to Ensure Effective Management of Corporate Rights of the State, according to the members of the Committee, also does not contradict Ukraine's international legal obligations, but needs to be finalized in terms of setting the remuneration of independent members of the supervisory board in accordance with the OECD Principles on Corporate Governance in State-Owned Enterprises.
- the draft Law No. 3934. The document proposes to increase the responsibility for illegal fishing, in particular to increase fines for it. The Committee concluded that the draft law complies with the Association Agreement, but requires taking into account the provisions of Article 43 of Council Regulation (EC) 1005/2008 regarding the investigation if a person was not seen at the time of the crime but was within the water with prohibited fishing gear and needs to be finalized to eliminate the inconsistency of Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms.
- the draft Law No. 4004 on Amendments to the Criminal Procedure Code of Ukraine. The draft law proposes to raise the effectiveness of the fight against cybercrime and the use of electronic evidence. The Committee concludes that the document does not conflict with the Association Agreement, but needs to be revised to take into account the provisions of Recommendation No. R (95) 4 and the Convention on Cybercrime in order to prevent abuses in the field of personal data protection.
- the draft Law No. 3713. The draft proposes to free parents from liability for late registration of a child birth in the temporarily occupied territory of Ukraine. The draft law also proposes to amend the Law of Ukraine “On Ensuring the Rights and Freedoms of Citizens and the Legal Regime in the Temporarily Occupied Territory of Ukraine” in order to introduce state registration of civil status (birth and death), which took place in the temporarily occupied territory of the Autonomous Republic of Crimea and Sevastopol without discriminatory procedure. According to the Committee, the document does not contradict Ukraine’s international legal obligations in the field of European integration.
According to the Committee's conclusions, the following draft laws do not comply with Ukraine's international legal obligations in the field of European integration:
- the draft Law No. 3811. The document proposes to apply a zero VAT rate for socially vulnerable groups for a number of operations, as well as to transfer technical administration of electronic tax bases to the State Special Communications Service of Ukraine.
- the draft Law No. 3979 on stimulation of the IT industry development in Ukraine. The draft offers a special tax regime for the IT sector (does not specify the terms of taxation). Also provides for the possibility of choosing a contract, as a form of employment. According to the Committee, the draft does not comply with Ukraine's international obligations and needs to be finalized to comply with the principle of legal certainty, stability and predictability of tax legislation.
The following draft laws, according to the members of the Committee, contradict Ukraine's international obligations in the field of European integration:
- the draft Law No. 3825 and alternative to it No. 3826. The documents propose to exempt disabled people of I and II groups and their legal representatives from paying import duties on cars. The provisions of the draft laws, in the opinion of the Committee members, contradict the international legal obligations of Ukraine and need to be finalized in order to bring their texts in line with the requirements of Article 282 of the Association Agreement.
- the draft Law No. 3455. According to the authors of the draft law, its adoption temporarily, until December 31, 2023, eliminates one of the reasons for the increase in tariffs for the users of pay-TV services. According to the Committee, the document does not meet the objectives of the Association Agreement with the EU and contradicts Ukraine’s international legal obligations.
The Committee decided to support three drafts on ratification of international agreements on transport facilitation. These are: the draft Law No. 0059 on ratification of the Agreement between Ukraine and Montenegro on international road transport of passengers and goods; Draft Law No. 0060 on Ratification of the Protocol between Ukraine and Belarus on Amendments to the Agreement on International Road Transport. Both documents provide for the ratification by Ukraine of agreements aimed to simplify the procedure for freight and passenger transportation, in particular to carry out such transportation without special permits. The third draft on ratification is draft Law No. 0061 between Ukraine and Qatar on amendments to the Air Services Agreement. Ratification of this Protocol will eliminate restrictions on the number of flights and capacity and (or) types of aircrafts. The Committee recommended that the Main Committee submit these three draft laws to the Verkhovna Rada of Ukraine for adoption as a basis and as a whole.
The Committee recognized the following drafts as consistent with the EU law and Ukraine's international obligations:
- the draft Law No. 3479. The document proposes to ban the creation, support and advertising of financial pyramids in Ukraine and to establish criminal liability for organizing or facilitating the financial pyramids. The Committee concluded that the document complied with the EU law.
- the draft law No. 3541 got the same conclusion. It proposes to increase the amount of cash transfers within Ukraine to the 1000 euros equivalent without identification and verification of a payer.
- the draft Law No. 3364-1, in the Committee’s opinion, also does not contradict the EU law. The draft aims to regulate the certification of the electricity transmission system operator according to the ISO separation model. This model assumes that the system operator uses property of the integrated power system of Ukraine, while this property remains in the ownership of the state. The members of the Committee also noted that Ukraine should consult with the European Commission on the compatibility of the bill with the EU law. This procedure applies to all “energy” bills, according to the requirement of paragraph 5 of Annex XXVII-A of the Association Agreement between Ukraine and the EU.
- the draft Law No. 3775 on amendments to the Tax Code of Ukraine to reduce the value added tax rate for milk and dairy products. The document proposes to reduce the VAT rate to 10% on dairy products and raw materials for their production. According to the Committee, it does not contradict Ukraine’s international legal obligations, but needs to be modified in order to comply with the principle of legal certainty, stability and predictability of tax legislation.
- the draft Law No. 3528 and the alternative — draft Law No. 3528-1. Both aim to amend existing legislation in the field of preventing and combating money laundering, terrorism financing and the financing of the proliferation of weapons of mass destruction. The Committee advised that the draft Law No. 3528-1 should be modified to take into account the provisions of Directive (EU) 2015/849 of the European Parliament and of the Council of May 20, 2015.
- the draft Law No. 3877 on Amendments to Certain Legislative Acts to Ensure Effective Management of Corporate Rights of the State, according to the members of the Committee, also does not contradict Ukraine's international legal obligations, but needs to be finalized in terms of setting the remuneration of independent members of the supervisory board in accordance with the OECD Principles on Corporate Governance in State-Owned Enterprises.
- the draft Law No. 3934. The document proposes to increase the responsibility for illegal fishing, in particular to increase fines for it. The Committee concluded that the draft law complies with the Association Agreement, but requires taking into account the provisions of Article 43 of Council Regulation (EC) 1005/2008 regarding the investigation if a person was not seen at the time of the crime but was within the water with prohibited fishing gear and needs to be finalized to eliminate the inconsistency of Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms.
- the draft Law No. 4004 on Amendments to the Criminal Procedure Code of Ukraine. The draft law proposes to raise the effectiveness of the fight against cybercrime and the use of electronic evidence. The Committee concludes that the document does not conflict with the Association Agreement, but needs to be revised to take into account the provisions of Recommendation No. R (95) 4 and the Convention on Cybercrime in order to prevent abuses in the field of personal data protection.
- the draft Law No. 3713. The draft proposes to free parents from liability for late registration of a child birth in the temporarily occupied territory of Ukraine. The draft law also proposes to amend the Law of Ukraine “On Ensuring the Rights and Freedoms of Citizens and the Legal Regime in the Temporarily Occupied Territory of Ukraine” in order to introduce state registration of civil status (birth and death), which took place in the temporarily occupied territory of the Autonomous Republic of Crimea and Sevastopol without discriminatory procedure. According to the Committee, the document does not contradict Ukraine’s international legal obligations in the field of European integration.
According to the Committee's conclusions, the following draft laws do not comply with Ukraine's international legal obligations in the field of European integration:
- the draft Law No. 3811. The document proposes to apply a zero VAT rate for socially vulnerable groups for a number of operations, as well as to transfer technical administration of electronic tax bases to the State Special Communications Service of Ukraine.
- the draft Law No. 3979 on stimulation of the IT industry development in Ukraine. The draft offers a special tax regime for the IT sector (does not specify the terms of taxation). Also provides for the possibility of choosing a contract, as a form of employment. According to the Committee, the draft does not comply with Ukraine's international obligations and needs to be finalized to comply with the principle of legal certainty, stability and predictability of tax legislation.
The following draft laws, according to the members of the Committee, contradict Ukraine's international obligations in the field of European integration:
- the draft Law No. 3825 and alternative to it No. 3826. The documents propose to exempt disabled people of I and II groups and their legal representatives from paying import duties on cars. The provisions of the draft laws, in the opinion of the Committee members, contradict the international legal obligations of Ukraine and need to be finalized in order to bring their texts in line with the requirements of Article 282 of the Association Agreement.
- the draft Law No. 3455. According to the authors of the draft law, its adoption temporarily, until December 31, 2023, eliminates one of the reasons for the increase in tariffs for the users of pay-TV services. According to the Committee, the document does not meet the objectives of the Association Agreement with the EU and contradicts Ukraine’s international legal obligations.