Cabinet is trying to eliminate the pattern of care of the VAT in the use of derivative securities.
Yesterday, the government approved a bill providing for the payment of 20 per cent tax on derivatives transactions, issued in real assets such as commodities or real estate. In the first place the Ministry of Finance intends to eliminate the scheme to minimize the construction market. However, the business still have time to take advantage of this loophole - the new law will come into force no earlier than 2010.
Government continues to struggle with the tax holes in the Ukrainian legislation. Yesterday Cabinet approved the draft law On amending some laws concerning the taxation of derivatives (derivatives), which was first enters this market the payment of VAT. The document obliges VAT payers when dealing with derivatives, underlying assets which are subject to taxation, to pay 20 percent tax.
VAT will be levied on the difference between buying and selling at the time of sale of derivatives. In the case of a loss on sale of derivatives negative amount of VAT will not be included in the tax credit, and, accordingly, the seller will not qualify for reimbursement of tax. Now VAT derivatives - as one of the types of securities - will be charged.
According to Art. 1 of the Law On the enterprise income tax, derivatives are the standard documents, the rules and /or commitment to buy or sell securities, tangible or intangible assets and funds under certain conditions they have in the future. These include options, forwards and futures contracts. Derivatives are currency, stock and commodity. After the law VAT will be levied on commodity derivatives. Now there is a tax evasion through derivatives, mainly in the construction industry - and said. about. Minister of Finance Igor Umansky.
source in the Ministry of Finance confirmed that the new mechanism is needed for the fight to the scheme in the construction market. The scheme is as follows: an individual buys 200 derivatives - each at 1 square. meters of housing, participants of the transaction do not pay VAT, and these derivatives exchanges to an apartment developer. No VAT at all stages. Everybody understands that a security can not be subject to VAT. But as the nation has managed a derivative drive the apartment, which should be the primary market sold with VAT, we go on an unprecedented step - if a person buys a derivative of apartment, he will have to pay VAT, - said the official.
According to him, using the derivatives of this scheme sold one of the markets of Kiev. With derivatives, there were two transactions: the plant was sold in 2007 and the market - in 2008. The plant was small, and the market (name withheld) was worth 2 billion UAH, - the official said .- They sold this way: derivative equal to one trading place for market. Tax officers are still sue. According to the source, the denial of tax credit will not allow recovery of VAT on the sale of derivatives at a discount. The document was developed by the Ministry of Finance back in 2008, but his discussion with the authorities delayed. We have agreed to without amendment, - said a member of the State Commission on Securities and Stock Market Sergei Biryukov.
Market participants say that originally derivatives were used to minimize the payment of VAT, but the proposed scheme has a problem - do not know who is in the case of speculative buying derivatives to issue tax invoice. These innovations are not strongly influence the content of the budget, since the derivatives market is underdeveloped, and the speculative market bespostavochnyh contract law nip in the bud, - confident Executive Director IR Phoenix Capital Oleg Shvets.
However, the scheme will be eliminated not soon. The proposed bill would come into force with the not yet adopted the law On the derivatives (derivatives), but not before January 1, 2010. Note that this bill, registered in the Verkhovna Rada, 30 December 2008, had not even passed the first reading. Transactions committed now with the derivatives do not fall under the payment of VAT, because the law is not retroactive, explained a partner law firm Astapov Lawers Oleg Malsky. Stop the active minimization of VAT only SSMSC conducting the registration and, consequently, control over the issuance of derivatives.
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