On April 28, 2023, a new law came into effect, altering the duration for which taxpayers are required to retain various documents and information. The recent amendments, outlined in the Law of Ukraine on Amendments to the Tax Code and Other Legislative Acts, introduce the following key changes:
Tax Control Documents
- Transfer Pricing and Controlled Foreign Companies: Documents and information essential for tax control, as per Articles 39 and 39-2 of the Tax Code, should be retained for 2,555 days (seven years).
- Primary Documents and Financial Statements: Legal entities engaged in economic activities within and outside Ukraine, as well as non-resident taxpayers, must keep primary documents, accounting registers, and financial statements for 1,825 days (five years).
- Nonprofit Entities for Taxation Purposes: For nonprofit entities, institutions, and organizations subject to profit tax, the retention period for other relevant documents not covered in the categories above is 1,095 days (three years).
- Compliance Documents: Documents related to compliance with other laws, under the jurisdiction of controlling bodies, including authorization documents, should also be retained for 1,095 days (three years).
Corporate Entity Document Retention
In accordance with Article 43 of the Law of Ukraine on Limited and Additional Liability Companies, corporate entities must maintain various documents, such as minutes of founders’ meetings, articles of association, and auditor reports throughout their entire period of activity.
Public Procurement Documentation
Public procurement documentation, as per Article 12 of the Law on Public Procurement, must be retained for a minimum of 10 years.
Document Retention Periods
Order No. 578/5 of the Ministry of Justice of Ukraine prescribes retention periods for standard documents created during the activities of state bodies and local self-government bodies, institutions, enterprises, and organizations.
- Most Documents: Retained for three to five years.
- Prolonged Retention: Certain documents, including those stipulated in Order No. 578/5 as “Until the liquidation of the entity,” HR documents, and specific labor protection documents, must be kept for more than 10 years, with HR and labor protection documents requiring retention for 75 years.
During liquidation, documents subject to prolonged retention must be transferred to an archive authority in the entity’s location. Compliance with legislation, including the Law of Ukraine on the National Archival Fund and Archival Institutions, is crucial for successful liquidation.
For a smooth liquidation process, the transfer of original or duly certified copies of essential documents, such as constituent documents, securities records (for joint stock companies), and HR-related documents, is mandatory. The archive authority’s confirmation is necessary for the state registrar to approve the entity’s liquidation.
In summary, these recent legal amendments redefine document retention periods, emphasizing the importance of compliance during both active operation and eventual liquidation of entities.