BRDO lawyers have prepared a list of frequently asked questions and answers that we are often asked by our Facebook readers.
- What businesses can operate during quarantine and which ones will be not allowed?
- How to apply for a tax break and do tax agencies know how to do this?
- What should employees do if their employer does not pay wages for actually completed work during the quarantine period?
- What should employees do if their employer forces (forced) them to accept leave without pay for the duration of the quarantine?
- Who will be responsible for occupational safety during the remote work period? What regulatory documents regulate it?
- Who is entitled to get partial unemployment benefits for the duration of measures aimed at preventing the outbreak and spread of coronavirus disease (COVID-19) provided for by the quarantine established by the Cabinet of Ministers of Ukraine?
- Who has the right to inspect the business for compliance with “providing its staff with personal protective equipment, as well as meeting appropriate sanitary and anti-epidemic requirements” and on the basis of which?
1. What businesses can operate during quarantine and which ones will be not allowed?
On March 25, the Resolution of the Cabinet of Ministers of Ukraine of March 25, 2020 No.239 allowed the Government to amend the Resolution of the Cabinet of Ministers of Ukraine of March 11, 2020 No.211 “On prevention of the spread of COVID-19 in Ukraine” and expand the list of activities and trade types that eligible to operate during the quarantine, which was introduced until April 24 to prevent the spread of the new COVID-19 coronavirus.
The following activities are forbidden until April 24, 2020:
- Activities of economic entities related to the reception of visitors, in particular catering facilities (restaurants, cafes, etc.), shopping malls, other entertainment establishments, fitness centers, cultural establishments and services and leisure facilities, except:
trade in food, fuel, hygiene products, medicines and medical products, veterinary preparations, feeds, pesticides and agrochemicals, seeds and planting materials and communication equipment, provided that the relevant employees are equipped with personal protective equipment and appropriate sanitary and anti-epidemic requirements are met;
carrying out banking and insurance activities, as well as medical practice, veterinary practice, operation of gas station facilities, activities on maintenance and repair of vehicles, maintenance of payment transaction recorders, activities on repair of computers, household goods and personal items and postal establishments, provided that the relevant employees are equipped with personal protective equipment and appropriate sanitary and anti-epidemic requirements are met;
trade and catering activities with targeted order deliveries, provided that the relevant employees are equipped with personal protective equipment and appropriate sanitary and anti-epidemic requirements are met;
- Scheduled and unscheduled carriage of passengers by road on suburban, interurban, intraregional and interregional routes, except for carriage by:
– cars
– service and/or rented motor vehicles of enterprises, facilities and establishments, provided that drivers and passengers are provided with personal protective equipment within the seating capacity of vehicles during such transportation and solely on routes agreed with the National Police as well as provided the compliance with appropriate sanitary and anti-epidemic requirements;
– the number of passengers, which does not exceed half of the number of seats, provided for by transportation facility specifications and specified in registration documents, in one urban electric (tram, trolleybus) and motor vehicle, which carries out regular passenger transportation on urban routes, provided that people are carried with personal protection equipment and appropriate sanitary and anti-epidemic requirements are met, except carriage by road provided for by the fourth paragraph of this sub-clause;
– the number of passengers, which does not exceed half of the number of seats, provided for by transportation facility specifications and specified in registration documents, in one vehicle and buses, which carries out regular passenger transportation on urban bus routes as fixed-run taxi, provided that people are carried with personal protection equipment and appropriate sanitary and anti-epidemic requirements are met;
– arrival of buses which carries out passenger transportation on suburban, interurban, intraregional and interregional routes, to bus stations and the sale of tickets to road carriers engaged in such transportation by owners of bus stations;
2. How to apply for a tax break and does the tax service know how to do this?
The State Tax Service of Ukraine knows how to apply for a tax break due to the quarantine, as it provides clarification in this regard in its informational letters published on the official portal of the State Tax Service of Ukraine.
Information on registration of tax breaks is contained in the informational letter #7, which explains the amendments to the tax legislation in accordance with the Law of Ukraine of March 17, 2020 No.533-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine to Support Taxpayers for the Period of Measures to Prevent Outbreak and Spread of Coronavirus Disease (COVID-19)” https://www.tax.gov.ua/media-tsentr/novini/412720.html.
The information in the table has been supplemented in relation with the adoption of the Law On Amendments to Certain Legislative Acts to Provide Additional Social and Economic Guarantees in Relation to the Coronavirus Disease (COVID-2019) Spread of 30/03/2020.
| Tax break | Application |
| The period of filing declarations on property status and income is extended until July 1, 2020 (it was May 1 in the year following the reporting year). | No special application is required |
| The term of paying a tax liability amount specified in the declaration on property status and income (tax return) for 2019 is postponed in 2020 until October 1, 2020 (it was August 1 in the year following the reporting year) for individual tax payers. | No special application is required |
| The following categories are exempt from charging, calculating and paying the unified social tax (UST) in March-April (from March 1 to April 30 2020):
– individual entrepreneurs, including those who choose the simplified system of taxation; – persons engaged in independent professional activities, namely scientific, literary, artistic, educational or teaching activities, as well as medical and legal practice, including advocacy and notarial activities, or persons engaged in religious (missionary) activities or other similar activities while earning revenues from such activities; – farm users, if they are not among the persons who are subject to insurance on other grounds. Also, if these categories of citizens did not receive income (profit) in March-April 2020, they are exempted from the obligation to pay the minimum UST amount during that period. But such social tax payers whether to take advantage of this tax exemption at their own discretion. That is, the UST may be paid for these periods voluntarily. In this case, the information on the amounts paid shall be submitted in UST assessment reports for the reporting period specified for such categories by the Law. |
No special application is required to be exempted from the UST
At the same time, there is no need to include information about the UST charge in reports for these periods from March 1 to March 31 and April 1 to April 30. Whereas the autonomy of unified tax payers (from the specified categories of payers) in determining the base for the unified tax assessment for reporting periods from March 1 to March 31 and from April 1 to April 30, 2020 in the “Report on Amounts of Accrued Income of Insured Persons and Amounts of Accrued UST” (hereinafter – the Report) will indicate that such a payer took a decision to charge, calculate and pay the unified tax for the specified periods in the amounts and according to the procedure established by the Law on UST If the payer has already paid the tax for March and April 2020 before the Law No.533 entered into force, tax agencies (without any applications filed by unified tax payers) will convert such amounts into future payments (provided that such payer has no arrears, fines and/or penalties for this tax), in accordance with the Law on UST, except in cases when tax payers independently determine the base for the unified tax assessment for the reporting period in the Report.
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| Land fees for land plots used by natural and legal persons in their economic activity (land tax or rent for lands in state or municipal ownership) are not charged and paid by economic entities in the period from March 1 to April 30, 2020. | According to the requirements of the Tax Code, land taxpayers (other than individuals) independently calculate the amount of tax annually as of January 1, submit a tax return for the current year to the relevant regulatory authority at the location of the land plot no later than February 20 of the current year. Land tax returns for 2020 have already been submitted by taxpayers. However, as amended by Law No.533, it is provided that taxpayers are entitled to submit a qualifying tax return containing changes in the tax liability to pay land fees for the relevant months to reduce land tax liabilities for the period from March 1 to March 31, 2020. In such a way, land tax liabilities for legal entities for March 2020 will be reduced solely by submitting qualifying tax returns by taxpayers. |
| Taxation of real property, other than land plots, does not apply to non-residential real estate owned by natural or legal persons in the period from March 1 to April 30, 2020. | Regarding taxpayers who are legal entities
The rules introduced by the Law No.533 provide that real estate taxpayers (other than individuals) with property other than land plots who, in accordance with the Code, have submitted tax returns on real property, other than land plots, are entitled to file a qualifying tax return containing changes in the tax liability for the relevant months. In such a way, tax liabilities on real property, other than land plots, (except for individuals) for March 2020 will be reduced solely by submitting qualifying tax returns in addition to tax returns for 2020 by taxpayers. Taxpayers are entitled to reduce their tax liabilities for the first quarter of 2020 (March 2020 is the third month of the first quarter) by an amount proportional to one month of the quarter in their qualifying tax returns. For example, if the amount of tax liabilities is UAH 720 thousand (accordingly, UAH 180 thousand for each quarter) in the tax return for 2020, a taxpayer wishing to reduce tax liabilities for March 2020 is entitled to submit a qualifying tax return on real property, other than land plots, for 2020, in which the accrued tax liability is reduced by UAH 60 thousand for the first quarter of 2020. Regarding individual taxpayers In 2020, regulatory authorities assess taxes on real property, other than land plots, for individual taxpayers the same as for 2019 tax (reporting) year. Therefore, requests for tax exemptions provided for by the Law No.533 will be taken into account when assessing the non-residential real estate tax for individual taxpayers in 2021 for the2020 tax (reporting) year by regulatory authorities. |
3. What should employees do if their employer does not pay wages for actually completed work during the quarantine period?
If employees are working and performing their duties (as stipulated by the employment contract) during the quarantine, the employer is obliged to pay wages.
The remuneration is regulated by the Code of Labor Laws, Articles 97 and 98 of which provide that an employer is not entitled to unilaterally make decisions on remuneration that worsen working conditions established by law, contacts and collective labor agreements. Employees are paid as a matter of priority, while all other payments are made by the employer after wage payment obligations have been fulfilled. Remuneration of employees working in budget-funded establishments and organizations shall be paid within budget allocations and extra-budgetary revenues.
In addition, Article 103 of the Labor Code states that the employer should notify employees of new or worsened working conditions no later than two months before their introduction or change.
If the employer violates the terms to pay wages or other payments stipulated by the labor law to the employees for more than one month or does not pay full wages, he is liable to a fine of up to 3 times the minimum wage established by law at the time of identifying violations (Art.265 of the Labor Code).
So, if the employer refuses to pay wages on time, the employee may choose to:
- file a complaint to the State Labor Service;
- file a claim in court.
Pay attention!
Pursuant to the Law 533, it is prohibited to take scheduled state supervision (control) measures in the field of economic activity by state supervision (control) authorities for the period up to May 31, 2020.
At the same time, this prohibition does not apply to unscheduled state supervision (control) measures, in particular on the basis of employee complaints.
4. What should employees do if their employer forces (forced) them to accept leave without pay for the duration of the quarantine?
Unpaid leave shall be granted only at the employee’s request and not at the employer’s sole decision.
If the employer put employees on the unpaid leave on his own initiative and without their consent, employees may choose to:
- file a complaint to the State Labor Service;
- file a claim in court.
Pay attention!
- Pursuant to the Law 533, it is prohibited to take scheduled state supervision (control) measures in the field of economic activity by state supervision (control) authorities for the period up to May 31, 2020.
At the same time, this prohibition does not apply to unscheduled state supervision (control) measures, in particular on the basis of employee complaints.
- Pursuant to Article 26 of the Law of Ukraine “On Leaves”, as amended by the Law 530, an employee may be granted the unpaid leave in the following cases: a) for family reasons and for other reasons, for a period stipulated by the agreement between the employee and the employer or his authorized body, but not more than 15 calendar days per year; b) unpaid leave, which term is not included to the total leave for family reasons, for the duration of the quarantine (ie, except for 15 calendar days per year, the employee is entitled to have additional days of unpaid leave for a period that may coincide with quarantine period).
5. Who will be responsible for occupational safety during the remote work period? What regulatory documents regulate it?
The Law of Ukraine “On Occupational Safety” stipulates that the employer is obliged to create proper working conditions in the workplace in each structural subdivision.
At present, neither the Labor Code of Ukraine nor the Law of Ukraine “On Occupational Safety” regulates the remote work.
The only valid legal act covering the remote work at least to some extent is the obsolete 40-year-old resolution of the State Committee of the USSR for Labor and Social Issues and the Secretariat of the All-Union Central Council of Trade Unions (VTsSPS) of 29/09/1981 No.275/17-99. However, the provisions of this resolution cannot be applied to current technological developments or to the situation related to the imposition of quarantine.
Therefore, virtually the only document that can regulate the remote work is an employment contract between an employee and an employer.
At the same time, the procedure for training officials and other employees and testing their knowledge on occupational health and safety in the course of employment, as well as schoolers, cadets, trainees and students in educational institutions during the labor and professional training, is regulated by the Model Regulation on the Procedure for Training and Testing Knowledge on Occupational Health and Safety, approved by the order of the State Committee of Ukraine for Labor Protection Supervision of January 26, 2005 No.15.
The specified Model Regulation provides information on the types, procedures and organization of occupational safety training. In particular, clause 3.1 states that employees shall be instructed, trained and examined regarding occupational health and safety, providing emergency medical assistance to accident victims and rules of conduct for accidents when entering employment and in the course of employment at the employer’s expenses.
Personnel departments or other specialists, who are entrusted with the relevant duties by the employer, are responsible for organization of training employees and testing their knowledge on occupational health and safety, including in the course of occupational training, additional training and qualification upgrade within the company (clause 3.3).
That is, in our opinion, an employee who has been instructed to provide occupational safety training by his manager should continue to perform his or her duties during the quarantine. Such an instructed employee may use the provisions of clause 6.6 of the above Model Regulation, which provides that unscheduled training sessions may be organized individually with a particular employee or with a group of employees engaged in the same occupation. The scope and content of unscheduled training are determined on a case-by-case basis, depending on the reasons and circumstances for such training (however, there are no clear rules on where and how to organize such training, and this allows to do it remotely).
6. Who is entitled to get partial unemployment benefits for the duration of measures aimed at preventing the outbreak and spread of coronavirus disease (COVID-19) provided for by the quarantine established by the Cabinet of Ministers of Ukraine?
The insured persons with official employment relations are eligible for such assistance in the event of loss of part of their wages as a result the forced reduction of working hours stipulated by the legislation in connection with the production suspension (cut-back) due to measures aimed at preventing the outbreak and spread of coronavirus disease (COVID-19) provided for by the quarantine established by the Cabinet of Ministers of Ukraine.
Such assistance is granted only if the employer files an application on providing such assistance to employees to the regional office of the central executive body responsible for state policy in employment and labor migration (State Labor Service).
The employer may apply for obtaining funds to pay partial unemployment benefits within 30 calendar days of production suspension (cutback).
The amount of partial unemployment benefits is provided to employers running small and medium-sized enterprises for the duration of the quarantine.
Who is not eligible for partial unemployment benefits?
Employees are not eligible to receive such assistance if their employer has wage and unified social tax arrears that has arisen in the five years preceding the year of production suspension. Also, such assistance is not granted to working pensioners.
Who decided on eligibility for partial unemployment benefits?
The decision on eligibility for partial unemployment benefits during the quarantine period is made by the regional office of the central executive body responsible for state policy in employment and labor migration (State Labor Service) within three working days from the date of submission of necessary documents by the employer.
Partial unemployment benefits are provided for each hour, by which the employee’s working time was reduced, and calculated as two-thirds of the wage rate established for the employee of the relevant category. The amount of benefits is determined based on the financial capacity of the State Social Security Fund in case of Unemployment and cannot exceed the minimum wage established by law.
How can an enterprise receive such partial unemployment benefits for employees?
To receive such assistance, an employer should apply to the State Labor Service’s regional office at the place of registration as a unified social taxpayer and submit the following documents:
1) an application of optional form;
2) a copy of the order indicating the date of production suspension (cutback) and a list of measures aimed at preventing the outbreak and spread of coronavirus disease (COVID-19) provided for by the quarantine established by the Cabinet of Ministers of Ukraine;
3) information about employees (full name, taxpayer identification number or passport serial number (for individuals who refuse to have a taxpayer identification number and have informed the relevant public authority of this fact and have a passport record on religious grounds) who are eligible to receive partial unemployment benefits under this article;
4) a certificate of no wage and unified social tax arrears that has arisen in the five years preceding the year of production suspension (cutback).
The employer shall pay partial unemployment benefits to employees from the first day of reducing their working hours at the expense of the State Social Security Fund in case of Unemployment within the period of production suspension (cutback), but no more than the period of taking measures aimed at preventing the outbreak and spread of coronavirus disease (COVID-19) provided for by the quarantine established by the Cabinet of Ministers of Ukraine.
7. Who has the right to inspect the business for compliance with “providing its staff with personal protective equipment, as well as meeting appropriate sanitary and anti-epidemic requirements” and on the basis of which?
- In accordance with the Law of Ukraine “On Protection of the Population Against Infectious Diseases” (Article 29), arrangement and control over observance of the legal regime established by the Cabinet of Ministers of Ukraine on the territory of quarantine, timely and total implementation of prophylactic and anti-epidemic measures shall be responsibility of local executive authorities and local self-government bodies. These authorities control the observance of sanitary-hygienic, sanitary-anti-epidemic and veterinary rules and regulations, standards of trade and consumer services, as well as carry out complex measures aimed at eliminating epidemics, outbreaks of infectious diseases and their consequences.
- The Law of Ukraine “On Occupational Safety” (Article 13) stipulates that the employer should ensure, among other things, compliance with the legal requirements regarding the rights of employees in the field of occupational safety. That is, since the employer is responsible for creating appropriate working conditions for employees, he or she should take care of providing them with personal protection equipment.
The Law also stipulates that the employer provides functioning of the occupational health and safety system at the enterprise, namely creating a relevant department or appointing a responsible employee/s, who deal with particular occupational safety issues. The employer also approves instructions for their duties, rights and responsibilities for the performance of functions assigned and controls their observance. In addition, the employer controls the use of collective and personal protection equipment by employees.
Also, Article 153 of the Labor Code of Ukraine provides that safe and non-hazardous working conditions shall be created at all enterprises, establishments and organizations. Providing safe and non-hazardous working conditions is the responsibility of the owner (employer) or his designated agent. The workplace environment, safety of technological processes, machines, mechanisms, equipment and other production facilities, the state of collective and individual protection equipment used by employees as well as sanitary conditions should meet the requirements of regulations on occupational health and safety.
So, it is primarily the obligation of the employer to provide the employees with personal protection equipment and control how the instructed employees responsible for occupational safety provided the staff with personal protection equipment within the company.
If there is a trade union organization within the company, it exercises public control over the observance of the labor protection legislation, creation of safe and non-hazardous working conditions, the proper work and sanitary environment, provision of employees with special clothing, safety shoes and other personal and collective protection equipment (Art.41 of the Law “On Occupational Safety”). In case of threat to the life or health of employees, trade unions have the right to require the employer to immediately stop work at workplaces, production areas, workshops and other structural units, or at enterprises or production sites of individuals who, in accordance with the law, use wage workers, as a whole for the period necessary to eliminate the threat to the life or health of employees.
With regard to external business inspections, it should be noted that Article 38 of the Law “On Occupational Safety” provides that state supervision over the observance of laws and other legal acts on occupational health and safety is carried out, in particular, by the State Labor Service and the State Service for Food Safety and Consumer Protection, and in accordance with Art. 34 of this Law, local state administrations shall control the observance of legal acts on occupational health and safety by business entities.
- With regard to inspections of the compliance of enterprises with sanitary and anti-epidemic rules, several bodies are in place to ensure the supervision of medical or epidemiological well-being of the population: the State Service for Food Safety and Consumer Protection and the Center for Public Health of the Ministry of Health.
In accordance with the Regulation on the State Service of Ukraine for Food Safety and Consumer Protection of September 2, 2015 No.667 approved by the Cabinet of Ministers of Ukraine, the functions of the State Service for Food Safety and Consumer Protection include, in particular, the state supervision (control) over compliance with the health and safety legislation, epidemiological well-being of the population (except for the functions related to the implementation of state policies in the field of epidemiological supervision (surveillance) and occupational health and safety).
In accordance with the Regulation on the State Labor Service of Ukraine of February 11, 2015 No.96 approved by the Cabinet of Ministers of Ukraine, the State Labor Service is responsible for state supervision (control) in the field of labor health, including supervision (control) of:
- compliance with the requirements of sanitary rules and regulations;
- timely implementation of preventive measures aimed at preventing harmful effects of working environment and business process factors and preserving the health of employees;
- observance of the occupational health and safety legislation in terms of safe work, labor health and industrial safety, including the provision of employees with special clothing, safety shoes and other personal and collective protection equipment.
The Center for Public Health is governed by the Ministry of Health. Pursuant to the Statute of the Center, approved by the order of the Ministry of Health of 20/03/2018 No.515, the Center’s functions include, in particular, issues related to ensuring epidemiological supervision (surveillance) of infectious diseases by carrying out epidemiological surveillance and monitoring of infectious diseases, development of measures to prevent them and forecasting the epidemic situation; implementation of measures (including restrictive ones) taken in infectious disease areas in accordance with the legislation of Ukraine; participation in epidemiological supervision (surveillance) and prevention of the international spread of diseases in accordance with International Health Regulations and with regard to this purpose, the formation, training and maintenance of relevant disaster-relief teams in a constant state of readiness in case of public health emergencies.
Thus, business inspections with regard to provision of employees with personal protection equipment, as well as compliance with the relevant sanitary and anti-epidemic measures in accordance with the Law of Ukraine “On Ensuring Medical or Epidemiological Well-being of the Population” shall be conducted by the State Labor Service of Ukraine (with regard to labor health), the State Service of Ukraine for Food Safety and Consumer Protection (with regard to compliance with the health legislation) as well as local self-government bodies within the powers established by law to control the compliance of heads and officials of enterprises, establishments and organizations of all forms of ownership with the health legislation.
- At the same time, since the laws of Ukraine No.530 and No.533 prohibit to conduct scheduled state supervision (control) activities in the field of economic activity, but except for state supervision (control), in particular, in the field of medical and epidemiological well-being of the population, for the duration of the quarantine until 31 May 2020, both scheduled and unscheduled business inspections may be conducted in the specified area.
- It should be noted that under the Law No.530, amendments to the Code of Administrative Offenses that established responsibility for violation of the quarantine rules have been introduced, namely:
violation of the quarantine rules, sanitary-hygienic and sanitary-anti-epidemic rules and regulations, stipulated by the Law of Ukraine “On Protection of the Population Against Infectious Diseases”, other legal acts as well as decisions of local self-government bodies responsible for infectious diseases, entails the imposition of a fine in the amount of one to two thousand non-taxable minimum incomes of citizens (UAH 17,000 – UAH 34,000) for citizens and a fine in the amount of two to ten thousand non-taxable minimum incomes of citizens (UAH 34,000 – UAH 170,000) for officials.
It is also determined that in cases of administrative offenses, the following officials are entitled to make reports on offences:
1) authorized officials of:
- law enforcement agencies (National Police);
- health administrations;
- bodies of the state sanitary and epidemiological service;
2) officials authorized by executive committees (or by executive authorities performing their powers in case when no executive committees have been established in the settlement) of village, settlement and city councils.
This material is prepare by the Better Regulation Delivery Office (BRDO), an independent expert and analytical center, funded by the European Union under the FORBIZ project and within the framework of EU4Business Initiative.