On 7 December 2017, the Ukrainian Parliament passed the Law of Ukraine “On Amendments to the Tax Code of Ukraine and Certain Laws of Ukraine on Securing Balance of Budget Revenues in 2018” No. 2245-VIII (“Law”). The law came into force on 1 January 2018.

The most important changes in the area of corporate income tax are the following:

In 2018, the corporation tax rate will remain unchanged at 18%. The definition of related parties has been extended to include two new criteria for legal persons. The legal entities are considered to be related if the ultimate beneficial owner of such companies is the same person or if the powers of the sole executive body of such legal persons are exercised by the same person.

The list of payments for software products that are not considered as royalties for tax purposes has been extended to include payment for the distribution of copies of software products, without the right to reproduce them, or if their reproduction is restricted by the end-user use.

The definition of a “syndicated financial loan” has been introduced. A ‘syndicated loan’ means the funds made available to it by a number of resident and / or non-resident banks or other creditors, including sovereigns and international financial organizations, under a single credit agreement in defined units of legal persons for a specified period defined purpose and with interest. The payment of income to the consortium of lenders may be made by a representative, a nominal holder (nominal owner) or an intermediary in relation to that income. The interest or other income payable under such loan shall be taxed at the rate provided for in the respective international treaty of Ukraine, taking into account the tax domicile of the participants in the syndicated loan and whether or not the interest payment is made by one Agents are done or directly.

A new provision has been added requiring annual corporate income tax returns to be filed within 60 calendar days of the last day of the year under review.