Changes to legislation, court practice news and much more
On 16 October 2023, the Draft Law «On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Lifting the Moratorium on Tax Audits» was adopted
The draft law provides that from 1 November 2023 to 31 December 2024 inclusive, only the following may be included in the schedule of scheduled documentary audits:
1) taxpayers that produce and/or sell, or have produced and/or sold, excisable goods;
2) taxpayers that organise and conduct, or have organised and conducted, gambling in Ukraine (the gambling business);
3) taxpayers that provide or have provided financial or payment services;
4) non-residents that operate or have operated in Ukraine through separate divisions, including permanent establishments, and/or separate divisions, including permanent establishments of a non-resident, with a high degree of risk;
5) other taxpayers that, based on their 2021 calendar year figures, meet at least one of the following criteria:
- their corporate income tax payments are 50% or more below the level of tax payments in the relevant industry;
- their VAT payments are 50% or more below the level of tax payments in the relevant industry. This criterion does not apply to taxpayers whose exports of goods outside the customs territory of Ukraine account for 25% or more of their total supplies and whose corporate income tax payments are at least 50% of the level in the relevant industry;
- their receivables exceed their payables more than twofold;
- the total expenses shown in the tax return on property status and income amount to 75% or more of the total annual income declared in it, provided that the total annual income from business activities is UAH 10 million or more;
- the tax agent (a legal entity) accrues and/or pays salaries below the average salary at companies in the relevant industry in the relevant region.
It is also proposed to supplement Section VIII «Final and Transitional Provisions» of the Law of Ukraine «On the Collection and Accounting of the Single Contribution for Mandatory State Social Insurance» with a new item 9-25, establishing that from 1 November 2023 until the termination or lifting of martial law in Ukraine, documentary audits of the correct accrual, calculation and payment of the single contribution are carried out taking into account the specifics set out in item 69 of subsection 10 of Section XX «Transitional Provisions» of the Tax Code of Ukraine».
On 17 October 2023, the Draft Law «On Amendments to Certain Legislative Acts of Ukraine (on the Specifics of Involving Convicts in Work and Conducting Business in the Penitentiary System)» was adopted
The draft law aims to change the approach to involving convicts in useful employment as a means of re-socialisation and to reduce the financial burden of the single social contribution and the payroll of penal institutions and enterprises of the State Criminal Enforcement Service of Ukraine.
The draft law proposes amending a number of provisions of the Criminal Enforcement Code of Ukraine, namely:
- to allow persons sentenced to restriction of liberty to work under civil law contracts, which will attract potential employers who prefer civil law contracts in their business, and to ensure that convicts working under civil law contracts participate in mandatory state social insurance;
- to systematise the possibilities of involving persons sentenced to restriction or deprivation of liberty in work during martial law and for two years after its termination or lifting;
- to regulate the conditions for crediting funds to persons sentenced to restriction or deprivation of liberty;
- to establish that, when accruing wages (remuneration) to a convict, the individual entrepreneur or legal entity for which persons sentenced to deprivation of liberty perform work or provide services (except for work or services under civil law contracts with non-profit organisations) pays the penal colony 25% of the wages (remuneration) actually accrued to the convict;
- to increase the number of hours per day that persons sentenced to restriction or deprivation of liberty who are not in paid work may be involved in improving the colonies’ grounds and the convicts’ living conditions.
To create additional incentives for convicts to work, the draft law also proposes that convicts held in the re-socialisation unit of a penal colony who have no outstanding disciplinary penalties and have served at least half of their sentence may be rewarded for working with a long visit with close relatives outside the colony of up to two days within the town where the colony is located.
The Cabinet of Ministers amended the «Regulation on the Ministry of Internal Affairs of Ukraine»
The decision was adopted at the Government meeting on 13 October.
It provides that the Ministry of Internal Affairs, in line with its tasks:
- provides organisational and regulatory support for the Unified Register of Persons Missing under Special Circumstances, a functional subsystem of the unified information system of the Ministry of Internal Affairs, and monitors compliance with the rules on maintaining it;
- keeps records of servicemen of the National Guard and the State Border Guard Service, rank-and-file and commanding staff of the civil protection service of the State Emergency Service, and police officers who have been killed (died), gone missing, been taken prisoner, released from captivity or wounded as a result of the armed aggression of the Russian Federation against Ukraine, and of their family members, in order to ensure the legal and social protection of such persons, and exchanges information on this with state authorities;
- exchanges information with the National Guard and the central executive authorities whose activities are directed and coordinated by the Minister to keep records of decisions granting (refusing) combatant status and war participant status.
Draft Law No. 10140 on improving judicial career procedures, which amends the procedures for selecting judges and qualification assessment, was registered in the Verkhovna Rada
Its key proposals include:
- the procedure for selecting local court judges is streamlined;
- the rules of the qualification exam change;
- to pass the qualification exam, a candidate must score at least 70% of the maximum score for each test and practical task;
- candidates will remain in the reserve for 2 years;
- judges and candidates will take part in a single competition for local courts;
- where candidates are otherwise equal, preference may be given to the person with longer experience as a judge’s assistant;
- during the competition, the High Qualification Commission of Judges will be able to refuse a recommendation if there is reasonable doubt about the candidate’s integrity;
- a person who has successfully passed the qualification assessment in a competition for an appellate court but has not won may, if they wish, use the results of their qualification exam in the next similar competition announced within 2 years, or take a new exam, etc.
On 18 October 2023, the Amendments to the Regulation on the Functioning of Certain Subsystems (Modules) of the Unified Judicial Information and Telecommunication System, adopted by decision of the High Council of Justice No. 977/0/15-23 of 12 October 2023, entered into force
The Regulation has been brought in line with the Law that makes registration of an Electronic Account mandatory for:
- attorneys;
- notaries;
- state and private enforcement officers;
- insolvency officers;
- forensic experts;
- state authorities and other state bodies;
- local self-government bodies;
- legal entities (for private legal entities in civil proceedings, the law takes effect on 20.02.2024).
The Law provides that documents are exchanged with these persons only through the Electronic Court system.
If such persons have not registered an Electronic Account, there will be negative procedural consequences: statements of claim will be left without progress, statements of defence will be disregarded, etc.
The Electronic Account is accessed with a valid digital signature, a qualified electronic signature of an individual or legal entity, or through the Diia app.
The amendments ensure the right of the parties to review the case file electronically through the Electronic Court system.
The amendments provide that if the case file is not available electronically in the Electronic Account, the court must, at a party’s request, scan the case file and upload it to the Electronic Court system, after which the party will be able to review it.
Whereas case files used to be compiled and kept only on paper, courts can now keep cases in paper, electronic or mixed form.
In other words, the court may print electronic documents only when necessary or keep the case entirely in electronic form.
Draft Law «On Amendments to the Law of Ukraine «On the Judiciary and the Status of Judges» and Certain Legislative Acts of Ukraine on Improving Judicial Career Procedures»
The draft law proposes a set of significant amendments to the Law of Ukraine «On the Judiciary and the Status of Judges»:
- It is proposed to add to Article 56 that, until dismissal or termination of office, a judge may not receive state awards or any other awards, distinctions or certificates of honour related to the professional administration of justice.
- It is proposed to substantially revise the structure of Section IV «Procedure for Taking the Office of Judge» and restate it, dividing it into separate chapters: Chapter 1 «Candidate for the Office of Judge»; Chapter 2 «Selection for the Office of Local Court Judge»; Chapter 3 «Competition and Appointment to the Office of Judge»; Chapter 4 «Transfer of a Judge to Another Court».
In Chapter 1 «Candidate for the Office of Judge», it is proposed to restate the current Article 69 and add a new Article 69-1.
- Article 69 is to clarify that research experience includes service in academic and teaching positions at the National School of Judges of Ukraine and full-time postgraduate or doctoral studies of graduates of such programmes. This clarification is needed to align these provisions with Article 35 of the Law of Ukraine «On Scientific and Scientific-Technical Activity». It is also proposed to count as research experience service in court staff positions involving research and analytical work in the courts of Ukraine, provided the person holds an academic degree.
- It is also proposed to define the main criteria of integrity and competence of judges (candidates for the office of judge) and to provide that the High Council of Justice will approve Uniform Criteria for Assessing the Integrity and Professional Ethics of a Judge (Candidate) after consultations with the High Qualification Commission of Judges of Ukraine, the Council of Judges of Ukraine and the Public Integrity Council, in line with the measures implementing the State Anti-Corruption Programme for 2023-2025.
- Article 69-1 is to provide that a candidate for the office of judge may undergo a polygraph interview by decision of the High Council of Justice. The Law further provides (Article 79 of the Law of Ukraine «On the Judiciary and the Status of Judges») that such an interview will be ordered by the High Council of Justice if the candidate receives an opinion of the Public Integrity Council finding that they do not meet the criteria of integrity and professional ethics.
Chapter 2 «Selection for the Office of Local Court Judge» is to set out the procedure for selecting candidates for local courts, with the following stages:
- announcement of the selection of candidates for the office of local court judge (Article 71);
- submission of an application and documents for the selection by persons wishing to become judges (Article 72);
- admission to the selection (Article 73);
- the qualification exam (Article 74);
- a special check (Article 75);
- a check of the personal moral and psychological qualities of candidates for the office of local court judge (Article 76), if the High Qualification Commission of Judges considers it necessary;
- approval of the ranking of candidates (Article 77);
- enrolment in the reserve for filling vacant judicial posts (Article 78).
The current selection procedure has 15 stages, including the competition for the office of judge and the appointment procedure.
Among the key changes to the selection of local court judges, the draft law proposes abolishing the preliminary exam stage.
Holding two exams (the preliminary and the qualification exam) significantly delayed the selection procedure. Some of the matters tested by the preliminary exam are already checked in other procedures (for example, knowledge of Ukrainian: a certificate of proficiency in the state language is issued by the National Commission on State Language Standards).
- It is proposed to hold the special check after the qualification exam. This will save state resources, as the special check will cover a smaller group of persons who have already passed the qualification exam. The current procedure is the opposite: the special check comes first, and those who pass it then take the qualification exam.
- It is proposed to abolish the special training of candidates for the office of judge and replace it with initial training, which the person will undergo after being appointed a judge by Decree of the President of Ukraine.
- It is also proposed to unify the terminology for the qualification exam taken by candidates during selection and the exam taken by candidates and judges during qualification assessment.
On the appointment of local court judges and transfers between courts:
- It is proposed that the High Qualification Commission of Judges hold competitions for vacant local court judge posts based on the ranking of candidates and of judges in the reserve. This is intended to ensure a single competition procedure both for candidates and for judges wishing to transfer to another local court.
- It is proposed that where candidates with no judicial experience, or with equal judicial experience, have the same ranking, preference be given to the one with longer experience as a judge’s assistant. Experienced judges’ assistants have considerable court experience and may be considered the best prepared for this work, so it makes sense to single out experience in this position.
On appointments to appellate courts:
- It is proposed that a person who has successfully passed the qualification assessment and confirmed their ability to administer justice in the relevant appellate court, but has not won the competition, may use the results of the qualification exam taken during that assessment in the next competition for an appellate court of the same specialisation announced within two years of the exam, without retaking it.
- It is proposed to delete part four of Article 103, since having a head of the Inspectors Service of the High Qualification Commission of Judges of Ukraine contradicts the nature and purpose of a patronage service.
- It is proposed to limit the disciplinary sanction under item 4 of part one of Article 109 of the Law of Ukraine «On the Judiciary and the Status of Judges» to the misconduct specified in items 1, 2, 4 and 5 of part one of Article 106 of that Law.
- It is proposed to involve the Public Integrity Council in the competition for the office of local court judge.
