Ukrainian Officials See the New Tax Code as a Huge Step Forward

KIEV, Ukraine, December 10, 2010 - Ukraine's Prime Minister Mykola Azarov and Vice Prime Minister
of Social Policy Serhiy Tyhypko believe that the recently adopted Tax Code
will raise the country's profile among international investors. Though the
code was adopted amidst a vibrant public debate and still needs some
adjustments, the authors of the document are confident that both national and
international investors should immediately feel the positive impact on their
businesses.

The Vice Prime Minister of Social Policy of Ukraine Serhiy
Tyhypko stated that "by adopting the Tax Code we have made a step forward as
a country". Tyhypko mentioned that the government would launch special online
training programs for businesses on the new Tax Code's implications.

According to the Prime Minister of Ukraine Mykola Azarov, next
year will be the transition period from the old tax system to the new one, so
neither fines nor penalties will be applied to the companies.

Among the key achievements of the new bill is the reduction of
the number of national taxes from 29 to 17. The code foresees a gradual
reduction of the corporate income tax from existing 25% to 16%: by 2011 - it
will be reduced to 23%, 2012 - to 21%, 2013 - to 19%, and starting from 2014
- down to 16%. The new bill takes the tax burden off light industry,
shipbuilding, aircraft building, and hotel businesses for the next ten years
to come. The Value Added Tax rate will be lowered too - from 20% to 17%.

The Tax Code introduces an automatic VAT refund. It foresees a
23-day term for the state to refund VAT to a company upon receipt of the
latter's claim. In case of a delay the liable state agencies will be charged
with a fine of 120% of National Bank of Ukraine refinancing rate. As of
today, the state's unpaid debt for VAT refund equals 9,5 billion Ukrainian
hryvnias (1,19 billion US dollars), including 2,4 billion of the overdue
debt. Automatic VAT refund is among International Monetary Fund's conditions
for Ukraine.

Construction works of affordable housing and housing built on
public funds was exempted from VAT. This measure promises to significantly
lower the real estate prices and to encourage further investments into the
sector.

For more information, please contact Maryna Khorunzha +380509151565 news at wnu-ukraine.com, Project Manager at Worldwide News Ukraine