Electronic money expands in Ukraine

As Russia’s unprovoked war in Ukraine continues, Ukraine is not only effectively defending itself with the support of its allies, but it is also actively developing local legislation with the aim of aligning it with EU standards. Following the entry into force of the Law of Ukraine “On Payment Services” in 2022, which sets out the concept and general procedure for payment transactions, the Ukrainian Parliament has now streamlined the rules for its application in various sectors of payment services.

On 12 January 2023, the Parliament of Ukraine adopted the Law “On Amendments to the Tax Code of Ukraine (regarding payment services)” No. 4366 (the “Law”) to widen and enhance the regulation of electronic money in Ukraine and bring the Tax Code provisions into line with the Law “On Payment Services”.

In particular, this new Law envisions the following:?

• it provides for the possibility to pay taxes, fees, and for shipped goods and provided services (this last option is only available to single tax payers in the first, second and third groups) with electronic money;
• equates e-wallet accounts to bank accounts; and
• extends responsibility for breaching the term and procedure for submitting information on opening or closing accounts to non-bank payment service providers.

At the same time, it is important to note that although the Law has just been signed by the President and should become effective shortly, its provisions relating to electronic money are temporary limited because of the restrictions imposed by the National Bank of Ukraine under martial law in Ukraine. Once martial law is lifted, these provisions will take effect.

For more information on the Law and how it can affect your business, please contact your CMS experts: Ihor Olekhov , . .