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TAXATION OF SEAFARERS’ INCOME IN UKRAINE

TAXATION OF SEAFARERS’ INCOME IN UKRAINE. INTERNATIONAL CREWING CONFERENCE. Speaker – Artyom Volkov Senior Lawyer, Attorney-at-law Head of Maritime Law Practice ANK Law Office. PAYERS OF INCOME TAX UNDER UA LAW.

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TAXATION OF SEAFARERS’ INCOME IN UKRAINE

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  1. TAXATION OF SEAFARERS’ INCOME IN UKRAINE INTERNATIONAL CREWING CONFERENCE Speaker – Artyom Volkov Senior Lawyer, Attorney-at-law Head of Maritime Law Practice ANK Law Office

  2. PAYERS OF INCOME TAX UNDER UA LAW • Individuals – residents, who urn income from Ukraine and foreign countries as sources of funds; • Individuals – non-residents, who urn income from Ukraine as source of funds; • Tax agents (e.g. employer).

  3. TAX RESIDENCE FOR INDIVIDUALS • Place of living in Ukraine OR • Permanent residence in Ukraine for 183 days OR • Citizenship of Ukraine

  4. INCOME TAX RATES GENERAL RATE – 15% up to USD 1 430 (as of 01.01.2013) income per month

  5. SPECIAL RATE – 17% if monthly income exceeds USD 1 430 (as of 01.01.2013) amount in excess shall be taxed under 17%

  6. INCOME DECLARATION Term of Declaration Filing – till May 1 Declaration can be filed earlier

  7. FOREIGN INCOME Foreign income shall be declared and taxed in Ukraine except foreign income that should not be taxed due to the provisions of Tax Code and Double Taxation Avoidance Agreements

  8. Double Taxation Avoidance Agreement

  9. UKRAINE CONCLUDED Double Taxation Avoidance Agreements with 49 countries among which are: • United Kingdom • Netherlands • Germany • Turkey • China • Belgium • USA • Italy • Portugal and others

  10. Paying of the Foreign Income Tax in other country should be proved by the relevant reference issued by Tax Authorities

  11. TAXATION OF OTHER PAYMENTS IN SEAFARERS FAVOR • Loss of Life Compensation • Disability Compensation • Sick Pay

  12. Control of Seafarers’ Tax Paying

  13. Crewing Agencies as Seafarers’ Tax Agents (?)

  14. Crewing Agencies cannot be a Tax Agent Because they are not Employers

  15. PENSIONS FOR SEAFARERS

  16. Many Employers (mostly from EU) pays seafarers’ fees to the social (pension) funds of country of incorporation

  17. International Agreements on Mutual Pension Provision Mostly concluded with former USSR countries (e.g. Russia, Belarus, Georgia, Moldova) and Eastern Europe countries (e.g. Latvia, Lithuania, Poland, Czech Republic, Slovakia)

  18. SOLUTION APPROACH

  19. Solidary System of Retirement Insurance MAIN STAGES: I – Application filing II – Concluding of Agreement III – Paying of Insurance Fees

  20. Funded System of Retirement Insurance May be realized by one of the following forms: 1. Individual Saving Fund in Pension Fund of Ukraine; 2. Individual Saving Fund in non-government pension fund; 3. Insurance Agreement of Life Pension; 4. Pension deposit in bank

  21. THANK YOU FOR YOUR ATTENTION

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