In connection with the introduction of quarantine in Ukraine from 12. 03. 2020 to 03. 04. 2020, business owners have many issues related to the order of doing business, in particular, payment of taxes, payment of rented premises, wages payments to employees, fulfillment of concluded agreements and much more.
What to do with taxes?
17.03. In 2020, the Verkhovna Rada adopted the Law of Ukraine № 3220 “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Support of Taxpayers for the Period of Measures to Prevent the Occurrence and Spread of Coronavirus (COVID-19)”, which provides for a number of tax measures .
First, from March 1 to May 31, 2020, penalties will not be applied for violations of the law. Exceptions are sanctions for:
– violation of the requirements for long-term life insurance contracts or insurance contracts within the framework of non-state pension provision, in particular, supplementary pension insurance;
– alienation of property that is in tax lien, without the consent of the supervisory authority;
– violation of the rules of accounting, production and circulation of fuel or ethyl alcohol in excise warehouses, which are used on a general basis;
– violation of accrual, declaration and payment of value added tax, excise tax, rent.
In addition, no penalty will be charged to taxpayers during this period. And if the penalty is still charged, it will be written off.
Secondly, the annual declaration of property and income for 2019 by FOPs must be submitted by July 1, 2020.
Third, if you are the owner or tenant of land, then from March 1, 2020 to April 30, 2020 you will not be charged land tax and rent for land of state and communal ownership.
Fourth, if you own a non-residential property, then in the period from March 1 to April 30, 2020, the property is not subject to real estate tax other than land.
Fifth, sole proprietors (including those who have opted for a simplified taxation system), self-employed persons and members of farms for the period from 1 April to 31 March 2020 and from 1 April to On April 30, 2020, they are exempt from accrual and payment of SDRs.
Also, temporarily for the specified period will not be applied penalties for: late payment (late transfer) of a single contribution; incomplete payment or late payment of the amount of the single contribution simultaneously with the issuance of the amounts of payments for which the single contribution is accrued (advance payments); untimely submission of reports to the tax authorities. There will also be no penalty.
What are the consequences of non-compliance with quarantine?
In the legislation there is a concept of force majeure (force majeure) in connection with which non-fulfillment of certain obligations, including under the lease agreement, will be considered as having occurred for valid reasons, and as a consequence such circumstances is the basis for release from liability for breach of obligation.
First of all, you should carefully examine the terms of the contract with the counterparty. If the introduction of quarantine is prescribed in the contract as a precaution as a force majeure, then the additional definition of quarantine as such a circumstance is not necessary.
If the introduction of quarantine is not prescribed in the contract as force majeure, then in accordance with the Law of Ukraine № 3219 “On Amendments to Certain Legislative Acts of Ukraine Aimed at Preventing the Occurrence and Spread of Coronavirus (COVID)” the introduction of quarantine is considered force majeure (this provision will apply to all cases of non-fulfillment of obligations from the date of publication of this Law).
In this case, for the official establishment of quarantine as a force majeure, specifically in your case, you will need to contact the Chamber of Commerce and Industry of Ukraine to obtain a certificate. You will be able to issue a certificate of force majeure within seven days from the date of application to the Chamber of Commerce and Industry.
Care should be taken, as it must be confirmed that the coronavirus or measures to control its spread are circumstances that will make it impossible to fulfill the obligations. Therefore, all documentary evidence of the effect of coronavirus on the ability to fulfill contractual obligations should be collected and kept.
Should I pay wages during the quarantine at the enterprise?
If your business is related to economic activities that fall under the list of those entities whose activities are prohibited during the quarantine period, then there are several options for solving this problem.
First, if you have employees who have unused paid leave, you can take this opportunity to issue such employees paid leave.
Secondly, for the period of quarantine, you can provide leave to the relevant employees without pay (at the request of the employee).
And thirdly, you can, if the nature of the work performed by the employee allows, to transfer such to home work.
Are inspections of state supervision (control) bodies in connection with the introduction of quarantine due to the spread of coronavirus COVID-19 legal?
Law of Ukraine № 3219 prohibits state supervision (control) bodies from carrying out planned measures for state supervision (control) in the sphere of economic activity. It should be noted that the prohibition of inspections in this case applies only to scheduled inspections.
Unscheduled inspections have exhaustive grounds and depend on which specific state supervision (control) body conducts such inspections. A systematic analysis of the current legislation suggests that quarantine is not a separate basis for any inspection, which leads to the conclusion that the inspection in connection with the introduction of quarantine due to the spread of coronavirus COVID-19 is unfounded and therefore illegal.
The previously mentioned Law № 3220 called the establishment of a moratorium on business inspections one of the key measures proposed by the Law to increase the effectiveness of coronavirus control.
Thus, the mentioned moratorium applies to tax inspections, namely the establishment of a moratorium on documentary and factual inspections. The exception is the conduct of unscheduled documentary checks, if the payer submitted a declaration with a negative value of VAT, which is more than 100 thousand UAH, or a declaration in which the VAT refund is claimed, if the calculation of the amount of budget refund was made from capacitive value formed by operations determined by the PC of Ukraine. Documentary scheduled inspections for the period from March 18 to May 31, 2020, will be included in the updated schedule, which will be published by March 30, 2020. Documentary and factual inspections started before March 18, 2020 and not completed shall be temporarily suspended until May 31, 2020.
The moratorium on business inspections also applies to inspections of the correctness of accrual, calculation and payment of the single contribution for the period from March 18 to May 18, 2020. Relevant inspections that began before March 18 and were not completed are suspended until May 18, 2020.
The question of legality of carrying out sanitary-and-epidemiological inspections within the limits of implementation of the state sanitary-and-epidemiological supervision arises separately. Such supervision is carried out selectively in accordance with the plans of the state sanitary-epidemiological service, as well as unscheduled depending on the sanitary, epidemic situation and on the applications of citizens. Scheduled inspections in our case will be illegal, as they fall under the general ban on planned activities. As for unscheduled ones, they can be held only upon a written request of the business entity.
Thus, in view of the above, scheduled inspections, as well as unscheduled inspections not initiated by you during the introduction of quarantine are completely illegal.
If, after all, they came to you with an inspection, we recommend that you immediately check the legality of the grounds for the latter, in particular by reviewing the direction of the inspection, a copy of the order of the inspection and certificates of inspectors. If you find a violation, then at this stage to respond and not allow officials of the supervisory authority to such an inspection. In order to properly assess the legality of the grounds for the inspection, it is best to involve competent lawyers in these matters, who will represent your interests.
If you are approached by representatives of state supervision (control) bodies with an inspection during the quarantine regime, you can apply to the lawyers of Neofelis Law Group JSC for legal support at the contact details below. You can also contact us for any other questions you may have in connection with the introduction of quarantine: your contractor does not fulfill the contract, you want to officially establish the fact of force majeure or you want to understand how taxation will change in your case, etc. We always keep our hands on the pulse of current legislation and are ready to answer any of your questions.
Sincerely
Katerina Tarasova
Lawyer
Phone: + 38 (050) 471-77-71
Email: NEOFELIS.LG@GMAIL.COM