What kind of financial statements should a business keep under martial law?

Since the start of the full-scale war, several relaxations have been introduced in the sphere of taxation and financial reporting to support businesses. These measures enabled many enterprises to continue functioning under extremely challenging wartime conditions. However, currently, these relaxations are being gradually reduced, bringing businesses closer to pre-war regulations. This implies that businesses need to closely monitor all changes to avoid missing crucial updates and facing sanctions.

Financial Reporting

By Resolution No. 574 dated June 2, 2023, the Cabinet of Ministers of Ukraine introduced amendments to Resolution No. 1165 dated December 11, 2019, 'On Approval of Procedures for Suspending the Registration of Tax Invoices/Adjustment Calculations in the Unified Register of Tax Invoices.' These changes aim to simplify the conditions for registering these documents and enhance the automatic verification of their compliance with risk assessment criteria in the Unified Register.

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Currency Changes

Starting from June 16, 2023, the National Bank of Ukraine (NBU) is reducing currency restrictions, allowing resident borrowers to transfer funds abroad to fulfill external obligations.

Taxes

From August 2023, all taxpayers must settle their tax obligations according to the taxation system that was in place before February 24, 2022. This means that all individuals are required to pay personal income tax and social security contributions, reinstating reporting requirements.

Audits

Scheduled and documentary audits are also returning to specific sectors of economic activity.

Legislative Changes

The Verkhovna Rada of Ukraine has adopted a draft law in the first reading that aims to simplify business operations during a state of war. This includes a declarative approach for all types of economic activities (except critical sectors) that normally require permits during peacetime. The list of critical sectors will be determined by the Cabinet of Ministers, and previously issued time-limited licenses will be automatically extended. The deadlines for submitting reports will be extended. However, it's important to note that this is a draft law, and its final adoption date is uncertain.

It's worth considering that legislation undergoes frequent changes, often requiring businesses to adjust their reporting methods or face penalties.

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Recommendations For stable and effective business operations, reliable accounting support is essential. This should not just be a regular accountant, but a professional who has a solid understanding of legal norms and can promptly track changes. The accuracy and completeness of reporting depend on this expertise. Accounting support is key to maintaining stability and efficiency in business operations.