In the wake of the rapidly spreading coronavirus disease (COVID-19), which has taken global dimensions and has been declared a pandemic, the vast majority of countries have resorted to severe restrictive measures and adopted legislation to provide an adequate response to the various problems that governments, businesses and ordinary people are currently facing. The Ukrainian government has quickly followed suit and enacted several important pieces of legislation in order to effectively address the developing crisis. Please find below a short overview of this legislation and restrictive/preventive measures taken.
1. General Quarantine Measures
The Cabinet of Ministers of Ukraine approved Resolution No. 211 dated March 11, 2020 “On the Prevention of the Spread of the Coronavirus Disease (COVID-19) on the Territory of Ukraine”, amended and restated by Resolution No. 215 dated March 16, 2020, by which a period of quarantine is declared on the whole territory of the country from March 12, 2020 until April 3, 2020 and the following measures are introduced:
1) The education process is suspended.
2) All mass events (cultural, entertainment, sports, social, religious, advertising and other), in which more than 10 persons participate, are prohibited. Exempted from this prohibition are events necessary to ensure the work of state and local authorities.
3) The work of public places accepting visitors (such as restaurants, cafes, shopping malls, entertainment centers and facilities, fitness centers, cultural institutions, stores, consumer trade and service centers) is suspended. Exempted from this general restriction are grocery and consumer goods stores, gas stations, pharmacies, banks, insurance companies and online deliveries of food and consumer goods.
4) Rail and bus transportation are suspended, except for local public transit, in which case the number of passengers is limited by 10 per vehicle.
5) Subway transportation in Kyiv, Kharkov and Dnipro is suspended.
6) The Ministry of Healthcare is instructed to suspend all admissions to hospital and surgeries that are not urgent.
7) State and local authorities, companies, institutions and organizations are advised to organize work in shifts and real-time distant work (home office) via the Internet.
2. Specific legislation to prevent and combat coronavirus (COVID-19) and provide relief to businesses
Ukrainian Parliament has adopted two specific pieces of legislation aimed at preventing and combating coronavirus as well as providing relief to businesses:
· Law of Ukraine “On Amending Certain Legislative Acts of Ukraine to Prevent the Occurrence and Spread of the Coronavirus Disease (COVID-19)” No. 530-IX dated March 17, 2020;
· Law of Ukraine “On Introducing Amendments to the Tax Code of Ukraine and other Laws of Ukraine Regarding the Support of Taxpayers During the Period of the Implementation of Measures Aimed at the Prevention of the Occurrence and Spread of the Coronavirus Disease (COVID-19)” No. 533-IX dated March 17, 2020.
The above laws envisage the following measures in each particular sphere:
1) Taxes and customs
(a) Import of medicines and medical devices/equipment intended for the prevention and combating of COVID-19 is temporarily exempted from import VAT and customs duties. Their customs clearance shall be given priority.
(b) From March 1, 2020 till May 31, 2020, all businesses are exempted from fines and penalties for tax violations. However, this exemption will not apply in certain instances, such as VAT, excise, and rent violations.
(c) Tax audits of businesses are not carried out in the period March 18, 2020 – May 31, 2020 (with respect to single social tax – till May 18, 2020), except for tax audits of claimed VAT refunds; ongoing tax audits shall be suspended during this period.
(d) Statutory limitation periods regarding liability for tax violations are suspended from March 18, 2020 till May 31, 2020.
(e) The deadline for the submission of the annual tax declaration for individuals with respect to the year 2019 is postponed to July 1, 2020. Taxes must be paid until October 1, 2020.
(f) Land tax, including rent payments for land plots of municipal and state property, as well as commercial real estate tax are not charged for the period March 1, 2020 – April 30, 2020.
(g) Individual private entrepreneurs and individuals providing independent professional services are exempted from payment of single social tax for the period March 1, 2020 – April 30, 2020. They shall retain their pension entitlement for this period.
(h) Sanctions for late or incomplete payment of single social tax and late submission of reporting on this tax shall not be charged for the period March 1, 2020 – April 30, 2020.
(i) The mandatory utilization of cash registers by individual private entrepreneurs who are payers of unified tax is postponed by 3 months (till January 1, 2021 and April 1, 2021).
2) Employment / labor relations
(a) The duration of an unpaid vacation granted for the period of quarantine shall not be limited by 15 days and is given for the whole quarantine period.
(b) An employer may instruct an employee to temporarily perform their work at home for a certain period or grant the employee a vacation with their consent.
(c) Social welfare (temporary disability) benefits will be provided for periods of both in-patient treatment in hospital as well as self-isolation under medical supervision due to the outbreak of COVID-19. However, the amount of benefit is limited to 50% of the average salary regardless of the accrual period (length of service).
3) Business regulation
(a) Declaration of quarantine by the Cabinet of Ministers of Ukraine has been expressly listed among events that are recognized as force majeure.
(b) Public procurement procedures do not apply to the procurement of goods and services needed for the prevention and combating of COVID-19. Such procurement agreements can provide for 100% prepayment.
(c) For the period of the COVID-19 quarantine, companies, institutions and organizations may alter their operating modes (office/working hours), in particular, regarding services provided to individuals and legal entities and are obliged to duly notify their customers on such adjustments.
(d) During the COVID-19 quarantine, statutory application deadlines for and terms (time limits) of providing administrative and other services shall be suspended. From the date when quarantine is terminated, the duration of these deadlines/terms shall be restored.
(e) Ordinary state supervision (control) measures (audits) of businesses are not conducted during the COVID-19 quarantine and until May 31, 2020, except for high-risk companies, regulated prices and sanitary-epidemiologic well-being of people.
4) Social relations
(a) Penalties for late payments of utility bills shall not be charged until July 1, 2020, utilities shall not be suspended, evictions for failure to pay utility bills are prohibited during the COVID-19 quarantine and 30 days thereafter.
(b) Foreign citizens shall not be subjected to administrative liability if they were unable to extend their duration of stay or residence permit due to the COVID-19 quarantine.
(c) Pay increments shall be provided to medical staff engaged in combating the outbreak of COVID-19 as well as workers engaged in providing vital social services.
(d) Consumers shall not be subjected to liability (including penalties for late payments) under consumer loan agreements for the period March 1, 2020 – April 30, 2020.
(a) Breaches of quarantine rules, sanitary regulations and norms, decisions of local authorities on combating infections diseases shall inflict administrative liability and be punished by administrative fines amounting to UAH 17,000-34,000 for individuals and UAH 34,000-170,000 for officials.
(b) Breaches of rules and regulations on preventing and combating epidemic, infectious and other mass diseases which resulted in or could knowingly have caused a spread of these diseases shall inflict criminal liability and be punished by a fine of UAH 17,000-51,000 or an arrest for up to 6 months, or a limitation of freedom of up to 3 years, or an imprisonment for the same term. In case of severe consequences, such as human fatalities, the punishment shall be an imprisonment of 5 to 8 years.
As noted above, the coronavirus situation is rapidly developing. Therefore, new measures can be taken and fresh legislation enacted at short notice. We are constantly monitoring the current development and will keep you posted about any significant changes.
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