You can expect from a serious local accounting firm to perform the following tasks:

– take over the accounting work-flows of a freshly registered or already operating Ukrainian company or a private entrepreneurship;
– calculate the taxes and submit the respective reports to the local tax and social security authorities;
– pay the taxes through the online banking program of your company;
– prepare the audit reports according to the Ukrainian Accounting Standards (UAS).

An international accounting firm would be able to perform the following tasks (in addition to those of a local firm):

– monthly inner-corporate reporting to the parent company;
– “translation” of the UAS into IFRS and/or US GAAP.

We at Lobusch Consulting are an international accounting and auditing firm. You would choose us if you need a complex approach to all legal, tax and accounting matters of your company. In case you need an urgent intervention associated with the management and accounting of your Ukrainian company please be sure to contact us immediately.

See our offer on accounting and payroll in Ukraine

Please ask us for advice before taking any action. You can do it here, right after this post. We are always happy to help.

Sincerely yours,
Alexei Sandakov
CEO, Lobusch Consulting
www.lobusch-consulting.com

The principle of the Value Added Tax is handled by the Ukrainian tax authorities is basically the same as in the globalizing business world. VAT amounts to 20% and is applicable depending on the art of activities and the volume of particular business. VAT is reported monthly. Pursuant to the current legislation, the Value Added Tax shall be reduced to 17% from January 1. 2014.

Newly registered companies need to accumulate 300.000,- UAH (appr. 37.590,- US dollars) and perform in this area annually in order to obtain the obligatory right to register as Value Added Tax Payers. Those who fail to reach the 300.000 mark lose the right to invoice the VAT, thus becoming unattractive for larger businesses to deal with.

Another crucial issue with the Ukrainian VAT is the import. Importing goods is taxed by the 20% Value Added Tax off the price of the goods. Now the trickiest of all is that, if a company is not registered as an official VAT Payer, this VAT customs clearance becomes irrefundable! A client of ours, a major steel producer from Asia, was directing to loose around half a million US dollars on irrefundable VAT just because it wasn’t registered as a VAT Payer. A tense co-operation between our client, logistics professionals and our management consultancy was required to tackle the issue.

Please ask us for advice before taking any action. You can do it here, it this blog right after this post. We are always happy to help.

Sincerely yours,
Alexei Sandakov
CEO, Lobusch Consulting
www.lobusch-consulting.com

There are two taxation systems applied for Ukrainian legal entities. For the practical reasons you are most likely to choose the common system also used by most local businesses. Representative offices of foreign companies do not have a choice, but pay taxes on the general basis.

General Taxation System

General corporate tax is (as of March 2012) 21 % on profit which is gradually reduced to 19% on January 1, 2013 and to 16% on January 1, 2014. Pursuant to the current tax legislation of Ukraine, the corporate profit tax is going to be reduced gradually to 16% by the year of 2014.

Simplified Taxation System

The Simplified Taxation System can be chosen by small companies with a turnover of less than 5 mil UAH (appr. 625.000,- US dollars) and amount of people employed less then 50. Not all commercial activities can be performed by such undertakings.

• Value Added Tax free: 3 % on the turnover.
• Value Added Tax is involved: 5% on the turnover. VAT – 20%.

Profit taxes are reported – 4 times for each year quarter, 2 reports for each year half and 1 annual report.

Please ask us for advice before taking any action. We are always happy to help.

Sincerely yours,
Alexei Sandakov
CEO, Lobusch Consulting
www.lobusch-consulting.com