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Translated by Ollie Richardson

EA Daily


Since the beginning of Kiev’s military operation against the inhabitants of Donbass in April 2014, about 5,700 legal entities and 5,000 natural person-entrepreneurs have changed their tax address and registered on the territory controlled by Kiev. This was reported by Ukrainian website “Apostrophe” with reference to the State Fiscal Service of Ukraine (SFS).

However, the production capacity of these enterprises remained in the territory of the proclaimed republics of Donbass – moving them is either too expensive or physically impossible. The newspaper also reported that in the period from 2014 to May 2016, companies registered on the territory of the DPR and LPR paid taxes and fees totaling 36.8 billion hryvnia ($ 1.4 billion).

Nearly half of this amount – 16.2 billion hryvnia (about $ 652 million) – entered the budget of Ukraine, even 13.7 billion hryvnia (about $ 552 million) was withheld in the form of a single social contribution, which is one of the main sources for the budget of the Pension Fund. It was noted that every year the income from the territory of Donbass reduced.

As was reported by EADaily, despite the fact that the taxes on the territory of the DPR and LPR in the Ukrainian Treasury were properly transferred and are included in the payment of pensions, Kiev still pays pensions to residents of the unrecognized republics. In this case, the constitutional court of Ukraine refused to consider the legality of the abolition of social benefits to residents of Donbass. In May 2016, Kiev said that the total amount of arrears of pensions to residents of Donbass, which are beyond the control of Kiev territories, amounted to more than 10 billion hryvnia (about $ 393 million).

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