LETTER OF STATE TAX ADMINISTRATION OF UKRAINE

of September 17, 1996 No. 22-412/11-5891

About privileges for joint business

The main state tax authorities of Ukraine considered question on preserving privilege on the income tax for joint business in connection with change of the name and change of the foreign investor and report.

According to part one of article 6 of the Law of Ukraine "About entrepreneurship" the company is considered created and acquires the rights of the legal personality from day of its state registration.

Article 8 of the Law of Ukraine "About entrepreneurship" provides cases of re-registration of subjects of business activity in case of change of pattern of ownership, organizational form or the name of the subject of entrepreneurship.

Change of the name of the foreign investor in connection with transition of the property right of foreign founders to foreign investment of one foreign investor to another during the grace period shall be confirmed by documents with due legal registration.

Example. The company increases the size of authorized fund by introduction by the foreign investor in 1996 of additional contribution in authorized capital of property by one thousand 50,0 amount dale. The USA with further property exchange, imported in 1993 as fee of qualification foreign investment into authorized capital. Replacement of foreign investment does not belong to alienation of foreign investment therefore if the foreign investment meets the requirements of qualification investment according to the Art. of Art. 1 and 4a the Decree of the Cabinet of Ministers of Ukraine of 20.05.95 N 55-93 "About the mode of foreign investment", then the company will have privileges from tax payment for profit within five years from the moment of the actual introduction of qualification investment.

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