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Automatically translated version. May contain inaccuracies compared to the original.
📢 Not only VAT for individual entrepreneurs: how the Ministry of Finance proposes to implement European directives ATAD
While society discusses restoring VAT for individual entrepreneurs and removing the allowance on parcels to €150, the Ministry of Finance has prepared a bill on the implementation of the EU directives on combating tax avoidance (Anti-Tax Avoidance Directive — ATAD). The document is to be submitted to parliament in the near future, and its provisions could significantly change the rules of the game for business.
Key changes proposed by the document:
🔻 Concept of “tax avoidance” and penalty rate 30% (Art. 6 ATAD)
The tax authorities will gain the right to independently assess the substance of transactions. If tax authorities decide that a scheme was created to gain tax benefit (for example, the use of “payroll-only” individual entrepreneurs), relationships will be reclassified according to economic logic, and payments will be taxed at the elevated “penalty” rate 30%.
🔻 Restrictions on payments for loans (Art. 4 ATAD)
Companies will be able to include in interest expenses only up to 30% of EBITDA. This is aimed at stopping profit-shipping schemes to foreign parent companies under the guise of “debt repayment.”
🔻 Exit Tax (Art. 5 ATAD)
In case of moving production lines, equipment, or other assets abroad (even within the same corporate group), such a transaction will be treated as a sale and taxed at market value. The provision applies to companies and will not extend to individuals.
🔻 Countering hybrid mismatches (Art. 9 ATAD)
Neutralizing schemes that allow tax liabilities to be eliminated due to differences in tax laws of different countries.
The document aims at European integration and harmonization of Ukrainian law with EU norms, but grants supervisory authorities broad powers to reclassify business operations.
