Simplifying of contracting procedures for services exporters
From January 2017 the procedure of agreement conclusion will be simplified for services exporters.
January 3, 2017 the Law of Ukraine «On Amendments to Legislative Acts of Ukraine on elimination of administrative barriers to the service export» will come into force. This law provides amendments to the Law of Ukraine «On Foreign Economic Activity», Law of Ukraine «On the order of payment in foreign currency», the Law of Ukraine «On Accounting and Financial Reporting in Ukraine» and the Law of Ukraine «On International Private Law».
The adoption of the Law serves a double purpose:
- Bureaucracy reduction during foreign trade agreements (contracts) conclusion, to simplify the procedures of foreign exchange proceeds enrollment, accounting and financial reporting;
- To make services exports legal and increase foreign exchange proceeds.
Key changes to services exporters
From 3 January 2017 the exporters should consider the following changes.
Foreign trade agreements conclusion will be possible not only in writing but also in electronic form, as well as through the public offer, e-mail communication or by invoice (also in electronic form) for works performed, services rendered.
Banks will not be allowed to request translation of the documents into Ukrainian, if they are made in English. This should intensify the agreements conclusion by residents, because commercial banks have more sources to provide documents translation than small and medium businesses do.
Invoice will be recognized as the primary document
Another important change is that the invoice will be recognized as the primary document. This should simplify the procedures of accounting and financial reporting.
The amendments to Article 1 of the Law of Ukraine «On Accounting and Financial Reporting in Ukraine» will clarify the concept of «primary document», provided that invoice authorizes the implementation of business transaction or confirms its implementation.
Under the changes the invoice can be signed by means of a personal signature, electronic signature or electronic digital signature in accordance with the Law of Ukraine «On electronic digital signature», a disposable electronic signature symbol. In this case, only the signature of the exporter is required.
The invoice will contain all necessary requisites. The payment of invoice by a non-resident will indicate acceptance of the works performed and will replace the signature and seal. The advantages of invoice introduction for services (works) exports are that it will confirm consent of a non-resident counterparty with a price and other terms of a contract.
Bank requirements
Under the current law, in order to remove the export transaction (services export) on exchange control the bank has to require a services exporter to represent a foreign trade agreement, work acceptance certificate, documents translation into Ukrainian, all signed and sealed.
At the same time, foreign trade agreement will verify contractual relations between resident and non-resident to bank, however, foreign trade agreements often do not exist as such (exchange of e-mails, etc.). An acceptance certificate confirms legality of the currency, allows to control return of foreign exchange and to identify the payment. At the same time, as a rule, there is no seal and original documents of counterparty non-resident, as the parties exchange documents in electronic form.
Amendments to Article 9 of the Law of Ukraine «On Accounting and Financial Reporting in Ukraine» provide that the primary and summary records can be made in writing or in electronic form.
To sum up, the changes in the legislation are fairly progressive and promote the development of foreign trade relations, because businesses can become more dynamic, getting rid of bureaucratic burdens and banks will be able to carry out identification of foreign currency earnings derived from services exports.
