Ukraine

Business

Journal

18:57 PM Sunday, July 22, 2018
UBJ.am
UBJ.am Friday, July 6
Corporate Profit tax to be replaced; CEE comparative investment study launched; Ukrtelecom verdicts overturned; Trilateral talks on gas transit confirmed; Rye exports soar; Kharkiv airport breaks record.
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

President submits bill on replacing corporate profit tax. President Petro Poroshenko is asking the parliament to replace the corporate profit tax with an exit capital tax. The bill aims to only target the part of profit withdrawn from businesses and proposes a zero tax rate on the part reinvested. If adopted, the law will enter into force only after determining the compensators of losses to the state budget, the president’s site announced. Thus, “the draft law does not create contradictions with our international partners," the president said at a meeting with business representatives in Kyiv.

CMS launch comparative investment study of CEE region. Law firm Cameron McKenna have issued what is one of the most comprehensive studies of the comparative investment attractiveness of the countries of Central and Eastern Europe. Whilst Ukraine fairs well in terms of labour costs, it does poorly in terms of corruption and investment support. Whilst the monthly gross average wage in Czechia is €1,244, in Ukraine it is only 22.3% of this at €278. In terms of corruption Poland ranks 31st, Turkey ranks 81st whilst Ukraine sadly languishes at 130th out of 180 countries. Hungary has the easiest tax system whilst in Ukraine it is one of the more complex. In terms of support for investors Ukraine is not even listed whilst in most of the EU countries regional support can be up to 25% depending on the region. On the plus side Ukraine has a less developed but larger infrastructure than most others even without EU support or the recently announced development programmes and labour rates are one of the most competitive. The report does not address intellectual capital.

P&O Maritime arrives in Chornomorsk port. P&O Maritime Ukraine, a subsidiary of the global operator of port services P&O Maritime, has begun operations in Chornomorsk, one of the country’s largest seaports of Ukraine –. The company has been providing tugboat services at the Yuzhny port, and has now started operating in the Chornomorsk seaport. It has sent three tugboats to the Chornomorsk, and drawn crews from the local fleet. In 2018, P&O Maritime, a fully owned subsidiary of DP World Group, took control over LB Shipping company and started providing tugboat services at the Yuzhny port. Interfax Ukraine reports.

Novinsky’s Black Sea shipbuilding plant declared bankrupt. The decision was adopted by the Nikolaev Economic court. The plant was part of the shipbuilding holding of the Smart Maritime Group (SMG), Ukraine, founded in 2009 to manage the marine assets of Smart holding owned by businessman and politician Vadim Novinsky. It had been in financial difficulties for some time, Reporter.net Telegram reports.

Supreme Court upholds annulment in Ukrtelecom re-privatization lawsuit. The Supreme Court has upheld the annulment of the rulings of Kyiv's business court of October 2017 and Kyiv's business court of appeals of December 2017 terminating the privatization agreement on the sale and purchase of a 92.791% stake in Ukrtelecom by ESU LLC, a subsidiary of SCM. In May 2017, the State Property Fund filed a claim seeking to terminate the agreement with ESU and to collect an USD 81.9 million fine. In October 2017, the business court of Kyiv terminated the sale and purchase agreement of shares in Ukrtelecom. ESU filed a counterclaim, while the business court of appeals in Kyiv left the ruling of the court of lower instance unchanged, Interfax-Ukraine reports.

GIZ launches new project to support Energy Efficiency Fund. The German federal company Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH has launched a new project to provide advanced training for energy auditors. Vice Prime Minister Hennadiy Zubko announced that the project will provide training support for subsidy reform and a public communication campaign for co-owners of multi-apartment houses, Ukrinform reports.

Ukraine’s rye exports in 2017/2018 soar. 38.5 thousand tonnes of rye were exported in the 2017/18 marketing year, which is the highest figure for the last four seasons, APK-inform announced. In the 2017/18 marketing season, Ukraine supplied 38.5 thousand tonnes of rye to foreign markets, which is 3.3 times higher than in the last marketing year and is the highest for the last four seasons, Ukrinform reports. The largest volume was exported to Poland - 19.4 thousand tonnes, followed by Tunisia (6.1 thousand tonnes), Israel (4.6 thousand tonnes) and Spain (4.6 thousand tonnes).

Government to strengthen legal protection for Ukrainian tourists. Following recent problems with charter flight companies that have left hundreds of Ukrainian makers stranded abroad, First Vice Prime Minister Stepan Kubiv has created a working group to address these issues. It will develop proposals for amendments to the current legislation in the following areas: strengthening of licensing requirements for tour operator activities; creation of an effective mechanism for the implementation of legal liability of tour operators to tourists; increase in the size of financial support of tour operators and establish administrative responsibility of tourism entities for violation of legislation in the field of tourism and others, Ukrinform reports.

Ukraine-Russia-EU gas transit talks confirmed. Trilateral talks between Ukraine, Russia and the European Union on long-term gas transit via Ukraine to the EU will commence on 17 July, Vice-President of the EU Commission in charge of Energy Union Maroš Šefčovič has confirmed. Both, representatives of the respective governments and commercial entities will be involved. "Our aim is to agree on our long-term agenda as well as our working method," he said. "The negotiations that lie ahead of us are complex and difficult and therefore, require full attention and constructive engagement,” UNIAN reports.

U.S. extends Interpipe agreement on suspending antidumping duty. The U.S. Department of Commerce has extended for another year the Agreement Suspending the Antidumping Duty Investigation on Certain Oil Country Tubular Goods from Ukraine with Interpipe Group. The Agreement was signed in July 2014 after the results of an antidumping investigation and initially the Agreement was due to expire on July 10, 2017, Interfax-Ukraine reports.

Kharkiv airport breaks passenger record. Passenger flow volumes at Kharkiv airport exceeded 100,000 for the first time in June. The flow totaled 114,600 people, which is 38% up y-o-y. The most popular destinations were Istanbul (Pegasus, Turkish Airlines), Kyiv (UIA), Warsaw (LOT), Tel Aviv (UIA), Dortmund (WizzAir), Minsk (Belavia), Milan (UIA), Batumi (Myway Airlines, Yanair), Katowice (WizzAir), Tbilisi (Myway Airlines) and Lublin (Bravo Airways). The total passenger flow of the airport in January-June 2018 totaled 440,200 people, which is up 21% y-o-y, the airport reported on its website.

Lviv region predicts 20% increase in tourism. “Lviv region is expecting over 3 million tourists this year. Over 70% will be Ukrainians whilst the remainder will comprise: Poles, Germans, French, Belarusians, Chinese, Turks and Spaniards,” Interfax-Ukraine reports. The increase in tourist flow in summer is linked to the festivals that the city hosts, Interfax-Ukraine reports.

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