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Update on the ESG reporting obligations in Bulgaria, Croatia, the Czech Republic, Hungary, Romania and Slovakia
The Corporate Sustainability Reporting Directive (EU) 2022/2464 (the “CSRD”) required EU member states to complete its transposition by 6 July 2024. However, uneven implementation led the EU Commission to initiate infringement proceedings against 17 member states, including the Czech Republic and Romania, on 26 September 2024, citing their failure to fully communicate the necessary transposition measures. These states now face a two-month deadline to finalise the process and respond to the formal notice. While the CSRD’s transposition is nearing completion, attention is turning to the Corporate Sustainability Due Diligence Directive (EU) 2024/1760 (the “CSDDD”), an equally significant piece of legislation.
New tax amnesty adopted by the Romanian government
On 6 September 2024, the Romanian government adopted Emergency Ordinance no. 107/2024 (“the GEO”) regulating a nationwide tax amnesty generally aimed at cancelling late payment interest and penalties related to certain outstanding tax liabilities, as summarised below.1. Waiver of interest, penalties and other additional charges for outstanding debts as of 31 August 2024 for all taxpayers. The outstanding debts as of 31 August 2024 include: budgetary liabilities for which the due date or payment term has been met on or before 31 August 2024; supplementary budgetary liabilities established by tax assessment decisions communicated up to and including 31 August 2024, as well supplementary liabilities
Individuals are advised to check their personal online tax accounts for real property tax liability
In Ukraine, individuals are obliged to pay the respective real estate tax upon receiving a notification-decision from the tax authorities, which should arrive by July 1. Even if such a decision is not received by this date, the tax authorities still have a three-year period within which valid payment notifications can be sent. The tax authority regularly updates its tax database, so the safest way to check one’s tax liability is to use a personal online tax account on the official website of the tax authority. The attached alert outlines the key points regarding the payment of real estate tax for individuals, namely who must pay the tax, in what amount, within what time frame, etc. Please read below our overview in English
Ukraine increases transparency in the international arena and implements CRS
The exchange of information upon request between tax authorities is an important means of promoting transparency and allows tax authorities to obtain information necessary to ensure compliance with tax laws. Ukraine is a party to various international legal instruments under which information may be provided by one country to another. In this regard, Ukraine has recently become a party to the exchange of financial information under the Common Reporting Standard. Click on one of the images below or click on the following links to read the overview in English or in Ukrainian. Download in English: Download in Ukrainian:
Ukraine introduces e-residency and 5% single tax for non-resident individuals
On October 6, 2022, the Law of Ukraine No. 2654-IX "On Amendments to the Tax Code of Ukraine and some other laws of Ukraine regarding the taxation peculiarities of electronic residents’ business activities" was adopted. It will enter into force on April 1, 2023. The Law introduces a special status for foreign individuals who are not Ukrainian tax residents allowing them to carry on business activities without the need to be present in Ukraine. For these purposes the e-resident will be able to open a bank account, obtain an electronic digital signature and register as a private entrepreneur remotely. Download in English: Download in Ukrainian:
183 days of war in Ukraine: Tax considerations for refugees and their employers
The war in Ukraine has now passed the 183-day mark. This unfortunate milestone is a reminder to employers with a dispersed workforce of Ukrainian refugees to take a look at the status of these employees. Under many tax treaties mirrored after the OECD Model Treaty, the 183-day period implicates a significant threshold: individuals temporarily present in the treaty-party country (the Host Country) may be taxed by that country on income for personal services performed there if the individual resides in the Host Country for over 183 days in a given tax year. This is called the 183-Day Rule. Few European countries have issued guidance on how they intend to apply the 183-Day Rule to Ukrainian refugees. Although one
Questions and answers about the special single tax system during the martial law on the territory of Ukraine
Special single tax system rules have been introduced by Law of Ukraine No. 2120-IX as of 15 March 2022 (effective starting 17 March 2022) and by Law of Ukraine No. 2142-IX as of 24 March 2022 (effective starting 5 April 2022). We have prepared a brief overview of some key questions and answers to address the following: Commencement date and period Changes introduced for single tax payers in groups I and II Changes introduced for group III of single tax payers VAT issues for group III single tax payers Registration and exit issues Restrictions Download in English: Download in Ukrainian:
Ukraine: Temporary lifting of requirements for Diia City residents
At the beginning of 2022, a special legal and tax regime for Ukraine-registered tech companies called Diia City became fully operational [for more details please see our overview of the Diia City regime]. Ukrainian tech companies are required to comply with a number of requirements to become Diia City residents and maintain their residency. Due to the introduction of martial law in Ukraine on 24 February 2022, the Cabinet of Ministers of Ukraine has temporarily lifted a number of requirements. Download in English: Download in Ukrainian: For more information, please contact: Illya
Kinstellar announces new promotions to Partner and Counsel
Kinstellar is delighted to announce the promotions to Partner of Nina Tsifudina (Sofia) and to Counsel of Atanas Mihaylov (Sofia). PARTNER Nina Tsifudina, Sofia Nina has over 14 years of experience advising on large international transactions. She is counsel to local and multinational companies on a wide range of commercial matters and cross-border deals, reorganisations and market-entry strategies, with a focus on the TMT, pharma and financial services sectors. She also represents private equity and venture capital firms on acquisitions, disposals and restructurings, as well as portfolio companies on all corporate matters. Nina is highly experienced in all employment aspects of multi-jurisdictional
Special single tax system during the martial law on the territory of Ukraine
Special single tax system rules have been introduced by Law of Ukraine No. 2120-IX as of 15 March 2022 (effective starting 17 March 2022). We have prepared a brief overview of some key questions and answers to address the following: Commencement date and period Changes introduced for single tax payers in groups I and II Changes introduced for group III of single tax payers VAT issues for group III single tax payers Registration and exit issues Restrictions Download in English: Download in Ukrainian:
Taxation of e-services provided by non-Ukrainian residents
Ukraine has introduced special VAT taxation rules for electronic services. Starting from 1 January 2022, non-Ukrainian residents providing e-services to individuals in Ukraine will have to register as VAT payers in Ukraine and charge 20% VAT on their local supplies of e-services. Please refer to the infographics below with the legislative novelties based on the provisions of the new law and new rules to come in place. Download infographics in English: Download infographics in Ukrainian: For more information, please contact: Illya Sverdlov, Partner and Head of Tax
Ukraine: Tax law required for Diia City regime to go live has been adopted
Ukraine is strengthening its position as an IT hub of choice by adopting new legislation aimed at creating favourable tax and legal conditions for tech companies operating in the country and fostering further investment in the sector. On 14 December 2021, the Ukrainian parliament adopted draft law No. 5376 “On amendments to the Tax Code of Ukraine regarding the Stimulation of the Development of the Digital Economy in Ukraine”, which sets out the tax treatment under the Diia City regime. Together with the previously adopted draft law No. 4303 “On the Stimulation of the Development of the Digital Economy in Ukraine”, this marks the launch in Ukraine of the special legal regime called “Diia City”.