Tailored to specifically service foreigners, the new foreign tax service center only adds more troubles of its own.
Foreigners trying to pay their taxes in Kyiv now have a shiny new service center, located in the building of the Kyiv City Tax Administration, at their disposal.
So far, however, it appears to be nothing but a makeover for the same old bureaucratic jungle and hardly makes life any easier for expatriates.
Not all foreigners in Ukraine know it, but local legislation requires them to pay income tax of 15-17 percent not only on what they earn in-country, but also on foreign-earned income should they reside in the nation more than 183 days out of a year. Foreigners who have complied with these rules have found out the hard way that paying taxes in Ukraine can be difficult.
Ranked 181st out of 183 countries by the World Bank’s 2011 of ease of paying taxes survey, the country is a bureaucratic quagmire, particularly for foreigners who lack the language skills and logical flexibility to cut through the red tape.
Changes to legislation and procedures made the 2010 and 2011 tax seasons especially difficult.
“It was a very hectic time for individuals and companies such as ours,” said Victoria Chornovol, partner at Big Four auditor Deloitte.
Indeed, the previous filing season, which came to an end on April 30, saw local tax offices confused about how foreigners’ declarations should actually be filed, as well as such matters as where to register them and how much in taxes is to be paid. As a result, the expert said, the whole process took much longer than previously.
“It’s nonsense to spend three hours in a tax office to file one declaration,” Chornovol recalled.
The opening of a new tax service, which is specifically tailored to foreigners and offer consultation in foreign languages, has been widely publicized by Ukraine’s State Tax Service through media channels in recent weeks. They say it will be one important step towards helping foreigners pay taxes in Ukraine in a comfortable way.
So far, however, it seems to be adding troubles of its own.
Located near metro station Lukiyanivka on Sholudenko street 33/19, the site is easy to find physically – just take the side entrance next to the main office of the Kyiv City Tax Administration. But it is nonexistent online.
When called up by the Kyiv Post, the Kyiv office of the state tax administration gave step-by-step instructions on how to find information about the new center, starting from the latter’s homepage.
Naturally, no information was available in English, or even Russian. The spokesperson could not say when the translations would be provided.
Even more worrying was the fact that the information was about a different tax office, in another part of the city, which did not deal with foreigners. As it turns out, the page with advice for expats has not yet been created.
Trying to get information by phone led to an even more Kafkaesque experience. After calling the press service of the state tax administration, a Kyiv Post reporter was told to call the service directly, as they would be able to best respond to any questions. There, the tax official said: “We won’t give you any answers.”
Begrudgingly, and after much convincing, the center’s address was revealed.
The center itself was surprisingly clean and modern, with comfortable couches and wireless internet. The office is open from 9am to 8pm on weekdays, and 9am to 4pm on Saturdays. But while TV reports showed English-speaking staff, none could be found during a Kyiv Post visit.
“We don’t have the translators yet. We just opened,” a spokesperson explained.
On a positive note, however, there is a medical unit within the tax center – for those who might succumb to the heat and stifling bureaucracy – as well as a hairdresser.
You might not pay the right taxes, but at least you’ll look good.
Kyiv Post staff writer Jakub Parusinski can be reached at [email protected].
