Ukraine passes support package to employees and businesses ahead of new lockdown

The Cabinet of Ministers of Ukraine announced introduction of a strict lockdown from 8 to 24 January 2021. In order to help employees and business overcome this hardship, on 4 December 2020 the Ukrainian parliament adopted key legislation necessary for the support of businesses and individuals affected by the lockdown. The legislation includes:

• Law of Ukraine On social support of insured persons and businesses for the period of restrictive anti-epidemic measures aimed at prevention of the spread of the acute respiratory disease COVID-19, caused by SARS-Co V-2 coronavirus ("Support Package Law"); and
• Law of Ukraine On introducing amendments to the Tax Code of Ukraine and other laws with respect to social support of insured persons and businesses for the period of restrictive anti-epidemic measures aimed at prevention of the spread of the acute respiratory disease COVID-19, caused by SARS-Co V-2 coronavirus ("Tax Relief Law")”.

Both laws went into effect on 10 December 2020 after their official publication.

The Support Package Law envisages one-time aid payments to employees and businesses, as well as compensatory payments to eligible businesses. In order to be eligible to receive aid, employees and businesses should be engaged in certain activities affected by the lockdown, which are listed in the regulation of the Cabinet of Ministers of Ukraine adopted on 9 December 2020 for specification of the provisions of the Support Package Law and include retail businesses, hospitality establishments, fitness and entertainment venues, and household-service providers. Aid will be granted to eligible employees and businesses after consideration of their respective electronically filed applications.

Employees of businesses, which will be temporarily suspended due to the lockdown, are entitled to a one-time payment of UAH 8,000 (EUR 230), provided that:

• their employer paid the unified social contribution for the third quarter of 2020 in full; and
• the average monthly salary of the employee does not exceed UAH 30,000 (EUR 870).

Individual entrepreneurs, whose operations are restricted due to COVID-19, are entitled to a one-time payment amounting to UAH 8,000 (EUR 230) under the following conditions:

• they had been registered three months before the effective date of the Support Package Law;
• they had paid the unified social contribution for at least three months of the year 2020; and
• they are not employed elsewhere.

Businesses will be able to obtain one-time payments (maximum UAH 8,000 (EUR 230) for each employee) to reimburse salary losses caused by cut of working hours to their employees. Eligible companies, whose main activities are included under the list of restricted activities during the lockdown, are also entitled to 10% reimbursement of the unified social contributions paid for their employees for ten months prior to the effective date of the Support Package Law.

The Tax Relief Law also provides that businesses and employees will be exempt from paying income taxes on the aid and compensatory payments received through the Support Package Law. The Tax Relief Law also provides for cancellation of minor tax debt and additional tax exemptions for small businesses and individuals.

For more information on measures in Ukraine to support businesses affected by the COVID-19 pandemic, contact your CMS partner or our local experts Anna Pogrebna, Sergiy Datsiv, Viktoriia Stavchuk.

Source: The Law "On social support of insured persons and businesses for the period of restrictive anti-epidemic measures aiming at prevention of the spread of the acute respiratory disease COVID-19, caused by SARS-Co V-2 coronavirus" - here (in Ukrainian).

The Regulation of the Cabinet of Ministers of Ukraine “On imposing of the quarantine and introduction of restrictive measures aiming at prevention of the spread of the acute respiratory disease COVID-19, caused by SARS-Co V-2 coronavirus” - here (in Ukrainian).