GOVERNMENT EXPANDS LIST OF MEASURES TO PREVENT ONSET AND SPREAD OF COVID-19

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GOVERNMENT EXPANDS LIST OF MEASURES TO PREVENT ONSET AND SPREAD OF COVID-19

On 30 March 2020, the Parliament of Ukraine adopted Law of Ukraine “On Amendments to the Laws Aimed at Ensuring Additional Social and Economic Guarantees Due to Spread of Coronavirus Disease (COVID-19)” No. 540 (the “Law”) aimed to expand the list of measures designed to prevent the onset and spread of coronavirus disease (COVID-19) in Ukraine. The Law comes into force from the moment of its publication. Please see below a list of some major developments set forth by the Law.

Corporate issues

  • The deadline for running an annual general meeting (the “GM”) in joint stock companies as well as for disclosures and reporting is postponed. In 2020, the annual GM should be held no later than three months after quarantine restrictions are lifted, and the information on the issuer is to be disclosed within five business days following such GM.
  • If it is impossible to hold a GM in person due to the introduced restrictive measures, such GM may be held remotely. The temporary procedure for holding remote GMs will be approved by the National Securities and Stock Market Commission.

Labour issues

  • The Law abolishes the requirement to adhere to internal labour regulations. This implies that the working schedule, working conditions, and rules on subordination may be set for each employee individually instead of common rules for the entire company’s staff.
  • The Law introduces flexible working hours providing for mandatory lunch breaks and rest for employees.
  • The Law establishes the concept of remote (home-based) work. While working remotely, employees may allocate working hours at their own discretion.
  • The Law ensures that during the threat of an epidemic or pandemic and/or for the term of a military, industrial, natural, or other threat, the decision on remote (home-based) work and flexible working hours may be taken by the owner or the authorised body without entering into a labour contract on remote (home-based) work with an employee.

Commercial issues

  • If a tenant cannot use the leased property during the quarantine, the tenant may be exempt from rent payments.
  • The Law prohibits increasing interest rates on loans (including floating interest rates).

Tax and customs issues

  • Legal entities providing charitable support to fight COVID-19 (types of such a support are defined by the Law) may fully deduct the amount of such support (the respective adjustment is not applied).
  • Individuals who donated funds, medicines, and medical products during the quarantine may include the full amounts of such expenses to the tax relief for 2020.
  • During the quarantine, medicines and medical products purchased to fight COVID-19 (as per the list defined by the Cabinet of Ministers of Ukraine) are exempt from VAT.
  • During the quarantine, tax authorities may conduct factual tax audits and impose fines for excise tax violations .
  • The land tax is not paid from 1 March to 31 March 2020 for the land plots used in the commercial activity (the previous term was set up to 30 April 2020).
  • Non-residential property is not subject to the real estate tax from 1 March to 31 March 2020 (the previous term was set up to 30 April 2020).
  • Local government authorities are allowed to reduce the unified tax rates for 2020.
  • Income thresholds for business entities set to apply a simplified system of taxation of I-III groups have been increased.

Procedural issues

  • Within commercial, administrative, and civil procedures, the deadlines for all submissions and appeals are extended for the term of the quarantine.
  • The statute of limitations for claims is suspended for the term of the quarantine.

We will be happy to assist you to manage all quarantine-related issues properly and mitigate potential risks.

Additional notes

This LEGAL ALERT is issued to inform AVELLUM clients and other interested parties of legal developments that may affect or otherwise be of interest to them. The information above does not constitute legal or other advice and should not be regarded as a substitute for specific advice in individual cases. For further information on the topic please contact Mykola Stetsenko, Co-Managing Partner, Vadim Medvedev, Partner, or by telephone +380 44 591-3355 or via e-mail.

Posted on April 2, 2020

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