In connection with adoption of Resolution of the Cabinet of Ministers of Ukraine No. 358 as of 18.04.2023 "On approval of the basic standard for deducting share of profit directed to the payment of dividends based on results of financial and economic activity in 2022 of business associations whose authorized capital includes corporate rights of the state" (hereinafter - Resolution No. 358) and legislative requirements for payment of dividends on the state share based on results of operations in 2022, which are paid in 2023, the State Tax Service informs.
Resolution No. 358 approved basic standard for deducting dividends on the state share based on results of financial and economic activity in 2022, which will be paid in 2023 for business associations whose authorized capital includes the state corporate rights.
Paragraph 1 of Resolution No. 358 stipulates that for business associations, authorized capital of which includes corporate rights of the state, as well as business associations, 50 percent or more of the shares (parts) of which belong to business associations, in which the state's share is 100 percent, including subsidiaries, the basic standard for deducting share of profit, which is directed to payment of dividends, is 50 percent (provided that 30 percent of the net profit is directed to the restoration of damaged property and countering armed aggression of the russian federation).
In case of non-fulfillment of the specified conditions (in particular, due to the lack of property of the business association damaged as a result of the armed aggression of the russian federation), such business association based on results of its financial and business activities, in 2022 must allocate 80 percent of its net profit to the state budget for payment of dividends.
In addition, it should be noted that, taking into account provisions of Paragraph 2 of Resolution No. 358, business associations may decide to deduct a bigger portion of profit intended for payment of dividends based on results of their financial and economic activities in 2022.
We note that according to Articles 75 and 89 of the Economic Code of Ukraine, the main planning document of business entity of the state sector of economy is a financial plan, according to which it receives income and makes expenditures, determines volume and direction of funds for performance of its functions during the year according to the constituent documents.
Taking into account above specified, we note that in case that the business association decides to allocate 30 percent of the net profit from results of financial and economic activity in 2022 to the restoration of damaged property and countering the armed aggression of the russian federation, this must necessarily be reflected in the financial plan of such business association for 2023 (in the "Distribution of net profit" section of table II and other sections depending on the economic nature of expected costs).
Please also note that Paragraph 1 of Resolution No. 358 establishes a separate basic standard for deducting share of profit directed to payment of dividends based on results of financial and economic activity in 2022 for the:
joint-stock company "State Savings Bank of Ukraine" in the amount of 30 percent;
joint-stock company "National joint-stock company "Naftogaz of Ukraine" in the amount of 30 percent, the rest of funds from the net profit should be directed to the purchase of natural gas produced on the territory of Ukraine;
private joint-stock company "Ukrhydroenergo" in the amount of 30 percent (on the condition that 50 percent of the net profit is directed to restoration of destroyed and damaged property as a result of missile strikes of the russian federation);
private joint-stock company "Ukrainian Financial Housing Company" in the amount of 30 percent (provided that 50 percent of the net profit is used to finance affordable mortgage lending);
private joint-stock company "Ukrainian Danube Shipping" in the amount of 30 percent (provided that 50 percent of the net profit is directed to renewing the fleet);
joint-stock company commercial bank "PrivatBank" and state public joint-stock company "National joint-stock company "Ukragroleasing" in the amount of 80 percent;
state public joint-stock company "Construction Company "Ukrbud" in the amount of 95 percent.
Take into account the fact that Clauses 1 and 2 of Article 20 of the Law of Ukraine No. 2710-IX as of 03.11.2022 "On the State budget of Ukraine for 2023" establish that business associations, in the authorized capital of which 100 percent of shares (parts) belong to the state and business associations, 100 percent of the shares (parts) of which belong to business associations, in which the state's share is 100 percent, business associations, in the authorized capital of which there are corporate rights of the state and business associations, 50 percent or more of shares (parts) of which belong to business associations, in which the state's share is 100 percent, which have not made a decision on the calculation of dividends by May 1 of year following the reporting period, pay to the state budget part of the net profit for the state share in the amount determined according to the basic standards for deducting share of profit, which is directed to payment of dividends established for relevant year, but not less than 90 percent by July 1 of year following the reporting period.
In addition, it should be noted that according to Paragraph 3 of Resolution No. 358, the Ministry of Economy of Ukraine is obliged to provide basic standard for deducting share of profit, which is directed to payment of dividends based on results of financial and economic activity in 2022, to the subjects of corporate rights management that belong to the state in the authorized capital of business associations.