The future of economic booking in Ukraine: What does draft law No. 11331 provide for?
The future of economic booking in Ukraine: What does draft law No. 11331 provide for?
On June 11, the Verkhovna Rada of Ukraine registered Draft Law No. 11331, which contains a provision on economic booking. This draft law is aimed at creating conditions that will allow businesses to plan their resources more efficiently and ensure the stability of their economic activities.
On June 17, alternative draft laws were introduced that also contain provisions on economic booking. This activity of legislators demonstrates the considerable attention to the issue and the importance of its resolution at the legislative level.
Economic booking is an important tool for ensuring the smooth operation of entities, especially in times of crisis or unpredictable economic changes. It allows businesses to reserve the necessary resources in advance to avoid shortages and disruptions in production or service delivery.
The registration and consideration of several draft laws on this topic give reason to believe that economic booking will be implemented in Ukraine. This opens new prospects for businesses in various industries, allowing them to manage their resources more efficiently and increase their competitiveness.
The Cabinet of Ministers shall determine the specifics of the reservation by the relevant Procedure.
The amount of the monthly fee for a booked employee
The amount of the fee is prescribed in the draft law No. 11332: it is equal to one thousand 200 tax-free minimum incomes (UAH 20,400) for booking entities. By the way, there is an alternative draft law, No. 11332-1, which also sets the fee at one thousand 200 tax-free minimum incomes, but for individual entrepreneurs who make reservations.
Economic reservation is likely to be introduced sooner or later. The drafts, under certain conditions, give sole proprietors hope to be booked and to book their employees.
Further developments will show which draft law will be adopted, but we can already say that economic booking will become an important tool for stabilizing and developing Ukrainian business in the face of constant changes in the market.
For more information and professional assistance, please contact BDO in Ukraine.
Economic booking is an important tool for ensuring the smooth operation of entities, especially in times of crisis or unpredictable economic changes. It allows businesses to reserve the necessary resources in advance to avoid shortages and disruptions in production or service delivery.
The registration and consideration of several draft laws on this topic give reason to believe that economic booking will be implemented in Ukraine. This opens new prospects for businesses in various industries, allowing them to manage their resources more efficiently and increase their competitiveness.
Terms of economic booking under the draft law No.11331
Residents liable for military service are subject to booking with business entities if they:
- Pay a monthly fee to the state budget for the reservation of persons liable for military service established by the Tax Code of Ukraine for each booked employee,
- Do not have any salary arrears and do not pay taxes, fees and levies.
An individual entrepreneur and/or his/her employees are entitled to a reservation, provided that:
- The amount of income of the sole proprietor during a calendar month is not less than three times the amount of the fee for reserving persons liable for military service established by the Tax Code of Ukraine,
- The sole proprietor conducted business activities during the previous annual reporting period.
The Cabinet of Ministers shall determine the specifics of the reservation by the relevant Procedure.
The amount of the monthly fee for a booked employee
The amount of the fee is prescribed in the draft law No. 11332: it is equal to one thousand 200 tax-free minimum incomes (UAH 20,400) for booking entities. By the way, there is an alternative draft law, No. 11332-1, which also sets the fee at one thousand 200 tax-free minimum incomes, but for individual entrepreneurs who make reservations.
Alternative bills, new booking criteria
According to No. 11331-1, reservations are required for persons liable for military service who work or serve:
- At entities, institutions, and organizations where the average monthly salary of a person liable for military service is at least 12 subsistence minimums for able-bodied persons as of January 1 of the calendar year (UAH 36,336), and there are no wage or tax arrears.
The draft law No. 11331-2, in addition to the average monthly salary requirement for legal entities, sets an additional condition for sole proprietors:
- They must be registered as an entrepreneur no later than six calendar months before the entry into force of the Law of Ukraine “On the Principles of State Industrial Policy”"
- The amount of income during the last monthly tax (reporting) period is not less than three times the amount of the reservation fee.
Conclusions
Economic reservation is likely to be introduced sooner or later. The drafts, under certain conditions, give sole proprietors hope to be booked and to book their employees.
From the proposed options, we envisage that:
- A legal entity must pay a fee of UAH 20,400 for each person booked; there must be no salary and tax arrears; and as an additional condition, the average monthly salary must be UAH 36,336.
- The sole proprietor must have a monthly income of UAH 61,200 and must have conducted business activities during the previous year. Additional condition — he/she must be registered as an entrepreneur no later than six calendar months before the entry into force of this Law.
Further developments will show which draft law will be adopted, but we can already say that economic booking will become an important tool for stabilizing and developing Ukrainian business in the face of constant changes in the market.
For more information and professional assistance, please contact BDO in Ukraine.
