Client Alert

The Cabinet of Ministers of Ukraine Introduces Restriction for Utilizing the Tax Losses Reported for 2008 During 2009

Client Alert

May 13, 2009

On April 22, 2009, the Cabinet of Ministers of Ukraine issued Resolution No 427 that prohibits utilizing the tax losses reported for 2008 during 2009. This provision contradicts Article 6 of the Corporate Profits Tax Law that allows the tax deduction of the tax losses reported for the previous year.

Under Article 16 of the Corporate Profits Tax Law, the procedure for the calculation of taxable profits may be established and changed solely by amending this law. Accordingly, the legal basis of this Resolution is questionable.

The Resolution has not come into force yet and will become effective on the date of its official publication.

Because of the above, the taxpayers, which have already filed the corporate profits tax returns for the 1-st quarter 2009 and deducted tax losses for 2008 in them, or which consider filing such returns, have to closely monitor any further development of this issue. We will notify you on any related news.