Важные изменения для бизнеса и населения в период осуществления государством мер, направленных на предотвращение возникновения и распространения коронавирусной болезни (COVID-19)

In order to prevent the spread of coronavirus COVID-19 among the population of Ukraine, the Ukrainian Parliament recently adopted two laws No. 530-ІХ and No. 533-IX, which will significantly affect both business and the broader population in Ukraine. On March 17th, 2020 the President of Ukraine Volodymyr Zelensky signed the adopted laws and they were officially published. On March 18th, 2020 the laws entered into force.

As of March 18th, 2020, almost 200,000 cases of COVID-19 were reported in 142 countries of the world, including 7,997 deaths and 82,810 patients recovered (91% of closed cases). The World Health Organization stated that Europe is the epicenter of the COVID-19 pandemic following a dramatic rise in confirmed infections (Italy – 31,506, Spain – 11,826, Germany – 9,367, France – 7,730, Switzerland – 2,742). In addition, cases of COVID-19 are reported among the closest neighbors of Ukraine (Poland – 246, Slovakia – 97, Hungary – 58, Romania – 246, Moldova – 30, Belorussia – 36, Russia – 114).

As of March 18th, 2020, there were fourteen laboratory-confirmed cases of COVID-19 recorded in Ukraine, two were fatal.

Key issues:

  • Law No. 530-ІХ «On Amendments to Certain Legislative Acts of Ukraine aimed at Preventing the Occurrence and Spread of Coronavirus Disease (COVID-19)“ as of 17.03.2020
  • Law No. 533-IX «On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Support to Taxpayers for the Period of Measures to Prevent the Occurrence and Spread of Coronavirus Disease (COVID-19)“ as of 17.03.2020

Law No. 530-ІХ «On Amendments to Certain Legislative Acts of Ukraine aimed at Preventing the Occurrence and Spread of Coronavirus Disease (COVID-19)» as of 17.03.2020

In order to prevent the spread of COVID-19 among the population of Ukraine, this law makes the following amendments to legislation:

1) Temporary public procurement measures:

  • The procurement of goods, works and services necessary for the prevention and treatment of COVID-19 will be carried out without applying the procedures provided for by the Law of Ukraine «On Public Procurement»;
  • 100% prepayment for the above-mentioned goods, works, and services;
  • Exemption from import duties and VAT on medicines, medical devices and/or medical equipment intended to prevent the spread of COVID-19, the list of which has been determined by the Cabinet of Ministers of Ukraine;
  • The Cabinet of Ministers of Ukraine will control the price of medicines, medical supplies, and socially significant goods.

Quarantine is recognized as a force majeure circumstance by the Ukrainian Parliament.

2) Norms aimed at protecting the rights of individuals and legal entities during quarantine and restrictive measures:

  • Introduction of the opportunity to work remotely for employees, civil servants and employees of local self-government bodies and the possibility of granting leave by their consent;
  • The prohibition on charging and collecting penalties (fines, penalties) for late payment for housing and communal services;
  • The prohibition on the termination/suspension of the provision of housing and communal services to citizens of Ukraine in case of their non-payment;
  • The prohibition of the forced eviction of citizens for late payment of housing and communal services from residential premises in the houses of the state, public and social housing;
  • The prohibition of the forced eviction and forced seizure of housing owned by citizens of Ukraine upon enforcement of a court decision to collect debts for housing and communal services;
  • If the Cabinet of Ministers of Ukraine establishes quarantine, employees’ leave without pay shall not be included in the legislative allowance for such leave (15 calendar days per year);
  • The prohibition of revocation of Certificates of registration of internally displaced person (for the period of quarantine and for 30 days after its cancellation);
  • It becomes forbidden to bring to administrative responsibility foreigners and stateless persons who were unable to leave Ukraine or were unable to apply to territorial bodies/departments of the State Migration Service of Ukraine for extension of their stay in Ukraine due to the quarantine measures;
  • Quarantine is recognized as a force majeure circumstance by the Parliament of Ukraine;
  • Temporary suspension of the terms of application for the receipt of administrative and other services and terms of provision of those services defined by law;
  • It is prohibited to carry out planned activities for the implementation of state supervision in the field of economic activity by state supervision bodies (for example by the tax inspection).

Increased criminal responsibility for violation of the sanitary rules and norms on the protection of the population from infectious diseases.

3) Establishment of additional salary supplements for medical and other workers directly engaged in tackling COVID-19 of up to 200 percent of salary for the period of implementation of measures to prevent the spread of COVID-19.

4) Administrative responsibility for violation of quarantine orders, sanitary-hygienic, sanitary-anti-epidemic rules and norms stipulated by the law.

5) Administrative responsibility for non-disclosure or violation of the procedure for disclosure of information on public procurement conducted in accordance with this Law.

6) Increased criminal responsibility for violation of the sanitary rules and norms on the protection of the population from infectious diseases.

7) The Law instructs the Cabinet of Ministers to develop legislation aimed at:

  • Prevention of the termination of housing subsidies for the period of quarantine or restrictive measures related to the spread of COVID-19;
  • Allocation of housing subsidies for the next period to all, without exception, households that received a housing subsidy in the previous period even in the absence of a request for such subsidy;
  • Expanding the range of recipients of the housing subsidies due to quarantine or restrictive measures related to the spread of COVID-19;
  • Registration and recognition of the unemployed status of a person from the first day after their application for such status;
  • Suspension of mortgage obligations and the prevention of foreclosure of mortgages for the period of quarantine or restrictive measures related to the spread of COVID-19.

Law No. 533-IX «On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Support to Taxpayers for the Period of Measures to Prevent the Occurrence and Spread of Coronavirus Disease (COVID-19)» as of 17.03.2020

This law aims to partially mitigate the negative consequences for the Ukrainian economy because of the spread of COVID-19 and measures aimed at its elimination.

Law No. 533-IX was developed with the aim of introducing tax and non-tax benefits related to the deadlines for filing and paying taxes, payroll, deadlines for inspections, penalties and interest, etc.

First and foremost these measures are aimed at protecting businesses from the negative consequences of economic contraction.

In this connection, the following changes are made to the Tax Code of Ukraine:

  • No penalties for violation of the tax legislation committed in the period from March 1 to April 30, 2020;
  • Moratorium on documentary and factual audits from March 18 to May 18, 2020;
  • Deadline for submission of the annual declaration on property status and income has been extended until July 1, 2020;
  • Land charges are not accrued and paid during the period from March 1 to April 30, 2020;
  • Non-residential property owned by individuals or legal entities is not subject to real estate with the exception of a land plots from March 1 to April 30, 2020.

First and foremost these measures are aimed at protecting businesses from the negative consequences of economic contraction.

In addition, individuals – entrepreneurs, including those who have chosen a simplified taxation system; persons carrying out independent professional activities, namely scientific, literary, artistic, educational or teaching, as well as medical, legal services, including advocacy, notarial activities, farming activities or other similar activities are temporarily exempted from the accrual and payment of a single social contribution in respect of the amounts payable by these persons for the periods from March 1 – 31, 2020, and from April 1 – 30, 2020. Additionally, a grace period for the compulsory introduction of payment transaction terminals for second and fourth category individual entrepreneurs is introduced. Please note there are some exceptions in the law for certain types of economic activity.

The law introduces the provision of temporary disability benefits for the period of stay in the specialized healthcare institutions, as well as for self-isolation in connection with the implementation of measures aimed at preventing the spread of COVID-19. Such benefits will be paid in the same manner as temporary disability benefits due to illness or injury (not related to an industrial accident and occupational disease) and will amount to 50 percent of the national average wage.

It is also stipulated that in the case of delay of the fulfillment of obligations under consumer loan agreements in the period from March 1, 2020, to April 30, 2020, the consumer is relieved of liability to the creditor for such delay. The consumer, inter alia, is exempt from the obligation to pay the creditor a penalty and other payments for breaches of contract.

Finally, the law introduces a measure to increase the National Bank of Ukraine’s (NBU) capital buffers. The NBU can no longer distribute profit unless its general reserves are at least 10 percent of the average annual volume of its monetary obligations.

Conclusion

Given the critical and extremely threatening situation associated with the possible outbreak of the COVID-19 pandemic in the world and the epidemic in Ukraine, the laws No. 530-ІХ and No. 533-IX as of March 17th, 2020, are aimed supporting businesses and citizens during the fight against the spread of the diseases. The legal implications of these measures are wide-ranging, complex and without precedent. However, they are crucial for avoiding a deep recession, and we may see further fiscal and regulatory stimulus in the coming weeks and months to support the economy.