Doing business in quarantine
As already known, Decree of the Cabinet of Ministers of Ukraine of March 11, 2020, introduced quarantine in Ukraine for the period from March 12 to April 3, 2020. Moreover, on March 17, 2020, the Parliament of Ukraine adopted a number of laws related to Coronavirus prevention (COVID-19). These laws have already come to effect.
The laws introduce many changes in different areas of the activities of private entrepreneurs and businesses having a direct impact on business activities in quarantine conditions, and requiring rapid and proper adjustments.
One of the pressing questions is what duties are imposed on legal entities in case, if their employee is diagnosed with the disease. Among other aspects, the changes are related to this issue, namely:
- Remote work or leave. During quarantine employers have the right to instruct their employees to work from home or take leave days subject to employees` consent. The number of days of leave without pay taken due to quarantine should not be counted against the total number of such days allowed (15 calendar days annually).
- Sick leave payments shall be provided to insured people for the period of their stay in healthcare facilities or self-isolation under medical supervision due to the interventions to prevent COVID-19 spread, as well as to localize and liquidate its outbreaks and epidemics (in the amount of 50 percent of average salary (income) regardless of qualifying insurance period).
In other words, if an employee is diagnosed with the disease, first of all, he/she shall be isolated to avoid infecting other employees. In case of COVID-19 diagnosis in employee or people he/she had contact with, and if he/she receives treatment or is self-isolated under medical supervision, such employee shall receive sick leave payments on the conditions stipulated in the Law of Ukraine “On Compulsory State Social Insurance”.
It should be mentioned that despite drastic measures and situation with COVID-19, in accordance with current legislation employer shall not bind its employees to provide information about their diagnosis, and moreover about diagnosis of other people. In other words, employers cannot bind its employees to provide information about him/her having COVID-19. Employees are required to inform employers about sick leave according to general procedure only.
Changes in the area of taxation and customs clearance
- VAT exemption. Temporarily, VAT is lifted for importing to Ukraine medicines, medical devices and/or medical equipment that are required for interventions to prevent listed by the Cabinet of Ministers of Ukraine COVID-19 outbreaks, epidemics and pandemics, and ensure their localization and liquidation.
- Lifting some taxes and fees:
- For the period from March 1, 2020, to April 30, 2020, fees for land property that is owned or used, including under lease agreements, and used for business activities by private or legal entities shall not be applied.
- For the period from March 1, 2020, to April 30, 2020, non-residential properties owned by private or legal entities shall not be subject to taxation of real estate that is different from land property.
- Changes in Single Social Security Tax:
- Exemption of private entrepreneurs that conduct independent professional activities from Single Social Security Tax for the period from March 1, 2020, to April 30, 2020 (this period shall be counted toward qualifying insurance period).
- Exemption from fines and penalties for the period from March 1, 2020, to April 30, 2020.
- Single Social Security Tax audit moratorium for the period from March 18, 2020, to May 18, 2020.
- Customs clearance. Temporarily, customs fee is lifted for medicines, medical devices and/or medical equipment that are required to fight against COVID-19. Such goods shall be made the priority for customs clearance. Entry summary or temporary customs declarations shall be allowed for such products.
Changes with regard to other aspects of business
- Work mode changes. During the quarantine it is allowed to change work mode including with regard to reception and providing services to private and legal entities. Information on such changes shall be provided through web pages and other means of remote communication.
- Postponing deadlines for administrative and other services. From the day when quarantine is announced the deadlines for submitting requests to receive administrative and other services and terms for provision of such services established by the law shall be postponed. From the day when the quarantine is lifted such deadlines shall be restored taking into account the time for which they were suspended.
- Ban on business audits. Routine state inspections (audits) of business activities by state inspections (audits) shall be prohibited until May 31, 2020, save of high risk business entities, entities in the area of meeting state price regulation requirements and in the area of health and epidemiologic well-being of the population.
- Force Majeure circumstances. Quarantine established by the Cabinet of Ministers of Ukraine shall be added to the List of Force Majeure circumstances that are listed in Part 2, Article 14-1 of the Law of Ukraine “On Chambers of Commerce in Ukraine”. However, this shall not mean automatic exemption from any duties.
- Changes in the procedure for procurement of goods and services. The Law of Ukraine “On Public Procurement” shall not be applied in case of procurement of goods, works or services that are required for interventions to prevent coronavirus (COVID-19) outbreaks, epidemics and pandemics, and to ensure its localization and elimination.
It should be stated that new regulations do not restrict importation and exportation of goods, or their transportation within the country. The only exception constitutes the specified disease control goods (for instance, medical face masks, medical glows, etc.), exportation of which is prohibited until June 1, 2020.
- Administrative liability:
- 17000-34000 UAH fine for citizens and 34000-170000 UAH fine for officials that fail to adhere to the quarantine rules established for people, public health, and sanitary and disease control rules and regulations.
- Criminal liability:
- 17000-51000 UAH fine, or putting under up to 6-month arrest, or up to 3-year imprisonment for failure to adhere to rules and regulations that are established to prevent epidemics and other communicable diseases, as well as large-scale non-communicable diseases (poisoning), and fight against them, if such actions brought about or deliberately may have brought about spread of such diseases.
- 5 to 8-year imprisonment in case the above mentioned actions led to death of people and other severe implications.
For instance, Decree of the Cabinet of Ministers of Ukraine that established quarantine in Ukraine prohibits all large-scale events with the participation of over 200 people. According to the minutes of Permanent Committee on Technogenic and Environmental Security meeting “On Additional Measures to Prevent New Coronavirus Infection (COVID 19)” the city of Kyiv also introduced additional restrictions, including restrictions for large-scale events in Kyiv (over 60 people), with participation subject to thermometry; non-admission of employees Kyiv entities and agencies with the signs of infectious disease to work.
Therefore, in case of any events, including medical or internal conventions/conferences for company staff, their number in Kyiv shall not exceed 60 people, and thermometry shall be ensured. Otherwise, violation of the mentioned requirements will provide grounds to bring officials to administrative responsibility, and in case if such violation causes spread of the disease to criminal responsibility. Same applies to admission to work of employees with typical signs of the disease, as for example, cough and fever.
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