20 May 2011

Ukraine - Like Fred Karnos Army

Older British people will be familiar with the phrase 'Fred Karnos Army" or Fred Karnos Circus'.
For the rest of you, please Google it and you will find an explanation.

Why do I say Ukraine is like Fred Karnos Army?
Because a sure sign of instability in a country is the speed and way in which laws are changed so quickly and often being reversed after being implemented only a few months previous.

VAT for example.

This week the Ukraine Parliament adopted the Law* under which the VAT exemption on consulting, engineering, legal, audit, IT, etc. services is cancelled. Since 1 January 2011 it had been decided that VAT would not be applicable to 'services'.
It is expected to be signed by the President in the coming days and published by the end of May. On this basis, the Law will become effective starting 1 June 2011.
This would mean that:
local supply of such services will be subject to 20% VAT
supply of such services by non-residents will be subject to 20% VAT under the reverse-charge procedure
supply of such services to non-residents still will not be subject to VAT (but pro-rata of input VAT will be required)

* Draft Law No:8321 dated 31 March 2011

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