We have proved to the war that we know how to fight victoriously. It is equally important to prove to her that we can and do no worse than working against all the obstacles she has created for Ukrainian business. Even with such disappointing statistics: according to a study by Advanter Group (March 11-13, 2022), 54% of enterprises in Ukraine completely ceased operations, 25% almost ceased their activities, 21% of enterprises relocated (2% – completely, 12% – partially, 7% – in the process), 31% of enterprises did not have time to hold it.

Front rear – help. Businesses must become a partner of the state on the road to victory. To help the wounded Ukrainian economy – both where it is incapable of occupation and where it came under fire – the state has made a number of supporting decisions. The Ministry of Finance collected information about them on the “Action.Business” portal.

Tax reform for the period of martial law

The main factor of state assistance is the reduction of the tax burden.

On March 15, 2022, the Verkhovna Rada of Ukraine approved Bill 13 7137-d, which provides for radical tax reform for the period of martial law, which provides in particular that:

• from April 1 until the abolition of martial law private entrepreneurs and legal entities with a turnover of up to 10 billion UAH. will be entitled to use the simplified taxation system with a single tax rate of two percent of turnover without VAT. It is not required to submit VAT reports on transactions of supply of goods, works and services, the place of supply of which is located in the customs territory of Ukraine. Reports should be submitted quarterly, but with an indication of monthly income. The single tax must be accrued and paid by the 15th day following the reporting month;
• from March 1 until the abolition of martial law, as well as for 12 months thereafter, self-employed persons and persons engaged in an independent professional activity are exempt from paying SRS for themselves – regardless of whether they receive income or not. Also, single taxpayers (including legal entities) have the right not to pay a single contribution for employees called up for military service;
• from April 1 until the abolition of martial law, taxpayers of groups 1 and 2 are exempt from paying the single tax. The declaration for the period of non-payment of tax will not need to be filled out.

Credit benefits

The government provides an opportunity to obtain a loan of up to UAH 60 million. to any Ukrainian enterprise at 0% during martial law under the well-known program “5-7-9%”. The loan for the implementation of the investment project and for the refinancing of the debt is provided for a maximum of five years. To finance working capital – for three years. The loan can be obtained by any Ukrainian company, where the final beneficiaries with a share of more than 50% are Ukrainians. The Export Credit Agency will be able to ensure the loans of exporting entrepreneurs, which simplifies access to cheap financing.

Programs for temporary relocation of enterprises

She testifies that the state does not leave alone with the war disaster and the business that was in the country, which suffered significant damage, which is incompatible with the possibility of continuing production.

The team of the Office for Entrepreneurship and Export Development and the national project “Diia. Business” also gathered initiatives that will help Ukrainian businesses to evacuate from the affected regions. Ukrainian companies that are in the zone of active hostilities can receive assistance in moving their facilities to the western regions of Ukraine. State and regional support programs have been created for this purpose.

Conditions will be created for all enterprises that will apply for free relocation to the place of a temporary relocation, as well as for the selection of appropriate areas for production; relocation and resettlement of staff; selection of employees in the place of deployment after moving. To apply for participation in the program you need to fill out a simple form, which you will find in the application “Action. Business”.

You can also use the offer of Ukrzaliznytsia, which offers its production facilities in central and western Ukraine to relocate production from the east of the country. Let us know what you need to resume production, and Ukrzaliznytsia will select a production site for you based on its capacity. Phone 050 452 22, Eugene Sergeevich.

The Office for Entrepreneurship and Export Development provides a list of contacts and communication channels of local governments that are ready to accept the production capacity of enterprises from the affected regions of Ukraine, as well as links to private initiatives in this regard.

Employment of internally displaced persons

This program provides compensation to employers for the salary costs of employed internally displaced persons in the amount of 6.5 thousand UAH. for each such employee for two months.

The company needs to enter into an employment contract with a citizen who is an internally displaced person, and register data on the employed person through the portal “Action” or submit an application to the State Employment Service.

This procedure will apply during martial law and for another 30 days after its end.

In general, the program is implemented by the government in three areas: money, work, housing. The state will pay each migrant in Ukraine a minimum monthly allowance of two thousand hryvnias. Payments will be made through “Action”, to the card in the bank. Also, three thousand hryvnias will be paid for each child who moved to safer regions due to the war. The government has also decided on a mechanism to reimburse utility costs to communities that provide free shelter to IDPs in schools, kindergartens, community centres and utilities.

Organization of labour relations in martial law

It is carried out in accordance with the law of the same name, which determines the employment of employees of all enterprises, institutions, organizations in Ukraine, regardless of ownership, type of activity and industry, as well as persons working under employment contracts with individuals during the military state, introduced in accordance with the Law of Ukraine “On the legal regime of martial law”.

Some provisions of this law:

• restrictions on the constitutional rights and freedoms of man and citizen shall be introduced for the period of martial law in accordance with Articles 43 and 44 of the Constitution of Ukraine ”;
• the parties are allowed to independently determine the form of the employment contract for the period of martial law;
• during martial law, the need to notify the employee of a change in significant working conditions is not applied;
• in connection with the conduct of hostilities in areas where the enterprise, institution, organization, and the threat to life and health of the employee, he may terminate the employment contract on it’s own initiative within the period specified in his application (except in cases of forced involvement to socially useful works in martial law, involvement in the performance of work on critical infrastructure);
• the normal working hours of employees during martial law may not exceed 60 hours per week. For employees who are required by law to have reduced working hours, the working hours may not exceed 50 hours per week. A five-day or six-day working week is established by the employer at the decision of the military command together with the military administrations (if any). The duration of weekly uninterrupted rest can be reduced to 24 hours;
• the employer is released from liability for breach of the obligation to pay wages if he proves that this violation occurred as a result of hostilities or other force majeure circumstances;
• during martial law, the employer may refuse to grant the employee any type of leave (except maternity leave and leave to care for a child under the age of three), if such an employee is involved in work on the premises critical infrastructure.

        

Advisory assistance

The State Labor Service of Ukraine and its territorial bodies continue to exercise their powers to provide advice and counsel to employees and employers to ensure compliance with the law. Answers to the most pressing questions can be found on the website of the State Labor Office in the section “Questions / Answers” (Recommendations for employers and employees during martial law).

It is also possible to use the service “Interactive Inspector”, links to which are posted on the websites of territorial bodies of the State Labor Service.

Export-import aspects

Special attention should be paid by the state to export-oriented businesses, including furniture – their task should be to increase exports in order to increase foreign exchange earnings in Ukraine. And this is what seems most important here.

It is necessary not only to preserve but also to expand the geography of exports, simplification of export-import procedures should be one of the priorities, as the result of such assistance will be the accumulation of foreign exchange resources for the state now and in the future. Among the events:

• priority demining, restoration and construction of transport and logistics infrastructure (roads, warehouses, checkpoints);
• creation of additional (reserve) routes, in particular with the reorientation of a part of freight flows from the sea on land;
• strengthening bilateral tracks of cooperation with European neighbours, in particular in terms of temporary simplification of customs and clearance procedures.

Currently, the key is to expand the capacity of rail freight transport to Europe, providing additional capacity to move cars from 1570 mm to 1435 mm.

The second main logistics tool is trucking. Two issues need to be addressed here: reducing the time spent checking at numerous checkpoints and reviewing the ban on men under the age of 60 travellings abroad. The use of ports on the Danube should be considered in view of the high probability of military action in this direction.

At the same time, there is a need to reduce barriers to imports, which is an effective way to quickly overcome the shortage of key goods. However, the experience of Syria and Bosnia and Herzegovina shows that imports must be carefully controlled so as not to harm the domestic producer. First of all, we need to focus on the import of technology and equipment, which will improve existing products. By the way, the government’s resolution on a simplified procedure for customs clearance of goods during martial law has already been approved.