Import of services are subject to currency supervision in the same way as product import.
For purposes of currency legislation, such services are equated with products. Law of Ukraine “On currency and currency transactions” provides that the term “product” is used in the meaning defined by the Law of Ukraine “On foreign economic activity”. This Law refers to products not only goods, but also works, services, intellectual property rights and other non-property rights.
That is why Ukrainian enterprises that actively use services of non-residents, such as consulting, marketing, transport, IT services, advertising, engineering and others – should take into account that such operations are also subject to currency supervision.
What to remember
If resident has made advance payment to non-resident for services – settlement deadline begins on the day of such payment. Currently, during the martial law, this period is 180 calendar days.
This means that during this period services must be actually provided and resident must have documents confirming their receipt.
If services are not actually received within the established period, resident may be held liable under Article 13 of the Law of Ukraine “On currency and currency transactions”.
During the documentary audit, terms of the foreign economic contract and documents confirming actual receipt of services are assessed: acts, invoices, payment documents, accounting registers and other primary documents.
How to minimize risks
Before making advance payment, it is recommended to:
determine realistic terms for the contract;
check non-resident's bank requisites, especially if there is received notification of their change;
timely issue documents confirming receipt of services;
control compliance with payment deadlines.
If it becomes obvious that non-resident will not be able to fulfill the contract within the established period, it is not worth waiting for its expiration. Legislation provides for mechanisms that, under certain conditions, allow avoiding charging of penalties, in particular:
obtaining a conclusion from the Ministry of Economy of Ukraine on the extension of payment deadlines;
documentary confirmation of the force majeure circumstances;
filing a claim against non-resident with a court or international commercial arbitration.
At the same time, each of the above specified grounds is applied exclusively in cases and in manner specified in Article 13 of the Law of Ukraine “On currency and currency transactions”. Documentary confirmation of thee force majeure circumstances is assessed taking into account causal relationship between such circumstances and impossibility of timely fulfillment of obligations.
Following these recommendations will help avoid violations of currency legislation and financial liability.