LETTER OF STATE TAX ADMINISTRATION OF UKRAINE

of December 19, 1996 No. 17-0211/10-1621

About the taxation the income tax of the income of the citizens paid by commercial banks for trust management of their means

The State Tax Administration of Ukraine and State Tax Administrations in the Autonomous Republic of Crimea, areas, Kiev and Sevastopol perform the Main office of Privatbank commercial bank (Dnipropetrovsk), branches and regional governments of this bank concerning correctness of charge, completeness and timeliness of budget contribution of the income tax from the income of citizens for trust management of their means, and reports the following.

The main office CB Privatbank (Dnipropetrovsk) according to the contracts orders for placement of their privatization papers signed with citizens annually charges and lists to the branches and regional government of means and sends data on income distribution of citizens principals. However income tax withholding and its budget contribution is performed by branches and regional governments only during the appeal of principals to branch (regional government) behind income acquisition and thus Articles 11, 12 Decrees of the Cabinet of Ministers of Ukraine of December 26, 1992 N 13-92 "About the income tax from citizens" according to which the profitable tax on noted income shall keep in sources of payment are violated and be transferred into the budget according to the procedure, stipulated in Clause the 10th this Decree with the further message to tax administrations in the place of residence of citizens of data on f.n 2 about paid amounts of the income and the amounts of the tax withheld from them.

Considering brought, the State Tax Administration of Ukraine reports that the income tax from noted income shall according to Articles 7, of 11, 12 Decrees of the Cabinet of Ministers of Ukraine "About the income tax from citizens" be accrued at the rate of 20 percent at the time of charge of the income by commercial banks that are authorized to dispose of confidential means of principals. The added income amounts and the income tax shall be transfered to account "Means of physical persons on trust transactions of bank" (N 710) of branches and regional governments of commercial banks which along with transfer of funds for noted account shall transfer the income tax into the budget, despite of time of the address of citizens on receipt of means. To principals the income amounts reduced by the size of the income tax transferred into the budget shall be paid.

As the account of "Means of physical persons on trust transactions of bank" (N 710) is not the current or deposit account, percent which are charged by branches for use of means of citizens which were not them received (withdrawn from the specified account) during the certain period also shall be taxed in branches, regional governments at the rate of 20 percent.

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