In Ukraine, even ac­coun­tants have to be news junkies

Kyiv Post - - Business Focus - BY MATTHEW KUPFER KUPFER@KYIVPOST.COM

Yu­lia Zubova has a morn­ing rit­ual: she sits down at her work com­puter, logs onto sev­eral news sites and starts read­ing.

“Ev­ery day, I go on there for 20 min­utes in the morn­ing to see what’s hap­pen­ing,” she says.

But Zubova isn’t a jour­nal­ist, politi­cian, or a po­lit­i­cal risk con­sul­tant; she’s an ac­coun­tant in a soft­ware com­pany. And the news sites she’s read­ing aren’t about the lat­est po­lit­i­cal de­vel­op­ments; rather, they ex­plain changes in Ukrainian leg­is­la­tion and the tax code.

Zubova is not alone. Most Ukrainian ac­coun­tants reg­u­larly turn to th­ese sites to un­der­stand their coun­try’s ab­struse leg­is­la­tion, sev­eral ac­count­ing pro­fes­sion­als told the Kyiv Post. And ac­coun­tancy news and anal­y­sis sites rep­re­sent a small, if sur­pris­ingly im­por­tant seg­ment of the coun­try’s me­dia.

Some are free, while oth­ers are sub­scrip­tion-only. They have names like: De­bet-Kredit, Buh­gal­ter 911, Liga: Zakon, and iFak­tor. They boast ar­ti­cles re­port­ing on tax reg­u­la­tions, ex­pert opin­ions in­ter­pret­ing the laws, and dis­cus­sion fo­rums. Some have chat rooms where ac­coun­tants dis­cuss and trou­bleshoot their prob­lems in real time. Many even have paid hot­lines where work­ing ac­coun­tants can get ex­pert con­sul­ta­tions.

It’s a help­ful adap­ta­tion to a specif­i­cally Ukrainian con­di­tion: laws that are con­stantly in flux.

Le­gal limbo

“God is with us.” That’s one of the slo­gans on the cover of “Ev­ery­thing About Ac­count­ing,” a black-and­white mag­a­zine with a monthly print run of over 93,000.

If ac­coun­tants need God on their side, it might be be­cause no one else is — not the laws, not the State Fis­cal Ser­vice, and some­times not even their em­ploy­ers.

Many com­pa­nies econ­o­mize on ac­count­ing, sev­eral ac­coun­tants told the Kyiv Post. Ac­coun­tants even joke that they “are loss-mak­ing,” says Zubova, who has 20 years of ex­pe­ri­ence in a va­ri­ety of com­pa­nies. “The man­ager turns a profit through sales, the jan­i­tor picks up so ev­ery­thing is clean, but the ac­coun­tant con­stantly (is say­ing) ‘give me money, give me money’ and ‘you need to pay your taxes.’”

Ukrainian ac­coun­tants also face a heavy work­load and are re­spon­si­ble for doc­u­men­ta­tion that is crit­i­cally im­por­tant for a com­pany’s le­gal stand­ing. Yet many com­pa­nies do not pay the kind of salaries that would al­low ac­coun­tants to con­tinue rais­ing their qual­i­fi­ca­tions, says Va­leriy Li­manov, the founder of the Akhtung Zvit ac­count­ing firm.

Mean­while, ac­coun­tants face a chal­leng­ing task: keep­ing abreast of the lat­est tax leg­is­la­tion, which is con­stantly mor­ph­ing.

“Our home­land fre­quently changes the rules of the game. The par­lia­men­tar­i­ans try to make sure life isn’t bor­ing for us,” Li­manov jokes.

In this en­vi­ron­ment, ac­count­ing news­pa­pers and sites — es­pe­cially free ones — are not just use­ful. Of­ten, an ac­coun­tant’s job is barely doable with­out them.

Hos­tile taxes

That is no se­cret to Olha Sam­so­nenko. Af­ter spend­ing ten years as an ac­coun­tant, in 2008 she be­came the di­rec­tor of the site De­bet-Kredit. With around a mil­lion vis­i­tors a month, 60,000 read­ers a day, and 150 em­ploy­ees spread across Ukraine, it is the largest on­line ac­count­ing por­tal in Ukraine.

It of­fers both free and sub­scrip­tion-based publi­ca­tions and ser­vices, and its fo­rums, Face­book group, and ex­pert con­sul­ta­tions are a top source of so­lu­tions and ad­vice for Ukrainian ac­coun­tants.

This as­sis­tance not only helps ac­coun­tants do their jobs bet­ter; it is also an im­por­tant de­fense in a hos­tile tax en­vi­ron­ment.

Ukrainian tax leg­is­la­tion doesn’t just ex­ist so in­di­vid­u­als and firms pay their legally man­dated tax bur­den. In some cases, the laws ex­ist “so that the tax in­spec­tor comes to your com­pany and finds a rea­son to pun­ish you,” Sam­so­nenko says.

Li­manov agrees. There is “no pre­sump­tion of in­no­cence for the tax­payer,” and the tax of­fice uses all nu­ances of the law in its own in­ter­est, he says.

He of­fers a sim­ple ex­am­ple he re­cently en­coun­tered: an em­ployee of a com­pany pur­chased some of­fice sup­plies with his own money. He was then re­im­bursed by his em­ployer. But the tax of­fice de­cided that the money was in­come and wanted to tax it.

“This is the dumbest ex­am­ple, but there are much more se­ri­ous ones,” Li­manov says. And ac­coun­tants have to ad­dress prob­lems rang­ing from this to un­fair tax in­spec­tions and cor­po­rate raid­ing.

For this rea­son, when ac­coun­tants call De­bet-Kredit’s hot­line in tears, Sam­so­nenko un­der­stands that it’s of­ten a psy­cho­log­i­cal re­lease from the stresses of their job.

Best ac­coun­tants

Stay­ing abreast of le­gal changes is part of be­ing an ac­coun­tant in any coun­try. But few places’ ac­coun­tants must han­dle the con­stant flow of new leg­is­la­tion, new in­ter­pre­ta­tions of ex­ist­ing laws, and new pro­ce­dures that Ukraini­ans face.

Ukraine’s move to over­haul its ap­proach to cal­cu­lat­ing in­come tax in 2015 posed a par­tic­u­larly sig­nif­i­cant chal­lenge to the coun­try’s ac­coun­tants, ac­cord­ing to Ok­sana Kochmarska, di­rec­tor of tax and le­gal ser­vices at KPMG Ukraine. And be­tween 2015 and 2018, the coun­try has seen 45 edi­tions of the tax code and hun­dreds of other nor­ma­tive acts, she says.

But not a sin­gle ac­count­ing pro- fes­sional in­ter­viewed by the Kyiv Post could point out a spe­cific pe­riod when they felt the coun­try ex­pe­ri­enced a peak in changes to its tax leg­is­la­tion. All stressed that le­gal change is a con­stant in Ukraine.

As a re­sult, Ukrainian ac­count­ing is largely ori­ented on pay­ing a com­pany’s taxes and try­ing to min­i­mize the risk of fines.

“The sta­tis­tics speak for them­selves: an ac­coun­tant in Ukraine spends an av­er­age of 327.5 hours per year pre­par­ing tax re­port­ing, while an ac­coun­tant in Eu­rope spends 161 hours,” Kochmarska told the Kyiv Post in an email. “And the av­er­age ac­coun­tant in the world spends 240 hours a year.”

Many are un­happy with this sit­u­a­tion. Sam­so­nenko be­lieves ac­count­ing should be much broader than taxes and fo­cus on de­ter­min­ing the real re­sults of a com­pany’s work. This my­opic fo­cus on cal­cu­lat­ing tax is one of the field’s big­gest prob­lems, she says.

None­the­less, Sam­so­nenko is con­vinced that Ukrainian ac­coun­tants are “the most ad­vanced in the world.”

“I have trou­ble imag­in­ing a British or Amer­i­can ac­coun­tant who could… deal with so many changes in the laws,” she says.

Sam­so­nenko hopes that a time will come when Ukraine’s tax leg­is­la­tion will be more sta­ble and pre­dictable, even if that un­der­mines de­mand for De­bet-Kredit’s ser­vices. She be­lieves that as en­trepreneur­ship de­vel­ops in Ukraine, there will be a greater de­mand for more holis­tic ac­coun­tants — peo­ple who will help com­pa­nies man­age money flows and an­a­lyze a com­pany’s prof­itabil­ity, not just cal­cu­late taxes.

But un­til that day comes, ac­coun­tants like Yu­lia Zubova will keep read­ing De­bet-Kredit and other publi­ca­tions.

“I have rel­a­tives abroad in Is­rael, and they don’t have the crazy le­gal changes that we do,” Zubova says. “You have to sys­tem­at­i­cally sit (and read the news), be­cause some form or some­thing else is con­stantly chang­ing.”

Olha Sam­so­nenko, di­rec­tor of the De­bet-Kredit ac­count­ing news por­tal, speaks with the Kyiv Post in her of­fice on Oct. 3. She says Ukraine's ac­coun­tants are the world's "most ad­vanced" due to their ex­pe­ri­ence in han­dling tax leg­is­la­tion that is con­stantly in flux. (Volodymyr Petrov)

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