The tax reform stipulates the implementation of the income tax for the ferrous and non-ferrous metal scrap.
In particular, the draft law says the income received by the taxpayer for the sold ferrous and/or non-ferrous scrap, becomes the taxable basis.
UAVtormet Association and Metallurgprom have addressed the Prime-Minister of Ukraine Arseny Yatsenyuk to settle this matter.
The experts believe this taxation would lead to the decrease of scrap procurement in Ukraine and would drive this sector into even deeper shadow. It should be noted, that, according to the Ministry of finances, in the first quarter of 2011 this tax brought only 20 thousand UAH, with 22 thousand in Q1 2010.
Moreover, the new draft of the tax reform doesn’t take into consideration the UAVtormet and Metallurgprom suggestions as to VAT charge for the scrap operations on constant basis. Such operations are VAT-free, but this needs to be prolonged every time. In particular, this form of the statute was prolonged in December 2014, but due to the fault of the Ministry for economic development, the list of scrap wastes was approved only in February 2015, which has led to some ambiguity as to the law terms on behalf of certain companies and tax services.
Metal manufacturers and scrap procurers believe this periodical prolongation makes things complex and sometimes even leads to decrease of the economical conditions of work, as was seen in the beginning of the year. (Ukrainian metal)
