Publication date: 09.07.2024
Legal regulation of credit unions in Ukraine
Introduction
Credit unions are an important component of Ukraine's financial system, providing access to credit resources and financial services for citizens. They play a significant role in supporting small and medium-sized businesses and contribute to improving the financial literacy of the population. The legal regulation of credit unions is aimed at ensuring their stable and transparent operations, protecting the rights of depositors and members, and enforcing financial discipline. In this article, we will consider the main principles, regulations and authorities that regulate credit unions in Ukraine.
Basic principles of legal regulation of credit unions
The legal regulation of credit unions in Ukraine is based on several basic principles that ensure the efficiency and stability of their activities:
Theprinciple of voluntary and open membership. Credit unions are established on a voluntary basis, and any individual may become a member subject to compliance with the statutory requirements.
Theprinciple of self-governance and independence. Credit unions are self-governing organizations that operate independently of government agencies and other external influences, carrying out their activities in accordance with internal rules and procedures.
Theprinciple of mutual assistance and solidarity. The activities of credit unions are based on mutual assistance and solidarity of their members, which contributes to strengthening the financial stability and reliability of unions.
Principle of financial sustainability and transparency. Credit unions are obliged to ensure the financial sustainability of their activities, adhere to the principles of transparency and openness in financial matters, and provide members and regulatory authorities with reliable information about their financial condition.
Key regulations
The legal regulation of credit unions in Ukraine is based on a number of regulations, among which the key ones are:
TheLaw of Ukraine "On Credit Unions". This law defines the legal and organizational basis for the establishment, operation and liquidation of credit unions, establishes the rights and obligations of their members, as well as the procedure for controlling the activities of unions.
TheLaw of Ukraine "On Financial Services and State Regulation of Financial Services Markets". The Law regulates the activities of financial institutions, including credit unions, and defines the powers of state regulatory and supervisory authorities over financial services markets.
TheCivil Code of Ukraine. The Civil Code contains general provisions on contractual relations, in particular, loan agreements, financial services agreements and other aspects of credit unions' activities.
Tax Code of Ukraine. The Tax Code defines the peculiarities of taxation of credit unions, including the procedure for calculating and paying taxes, tax benefits and exemptions.
State regulatory authorities
The main state authorities that regulate and supervise the activities of credit unions in Ukraine are:
TheNational Commission for the State Regulation of Financial Services Markets (the "National Financial ServicesCommission"). The National Financial Services Commission licenses credit unions, monitors their compliance with legal requirements, conducts inspections and imposes sanctions in case of violations.
National Bank of Ukraine (NBU). The NBU is responsible for the macroeconomic regulation of the financial system of Ukraine, including control over the stability of credit markets, monetary policy and financial stability.
State Tax Service of Ukraine (STS). The STS monitors compliance with tax laws by credit unions, conducts tax audits and assesses tax liabilities.
Rights and obligations of credit union members
The legal regulation of credit unions defines the rights and obligations of their members, which are aimed at ensuring the effective functioning of credit unions and protecting the interests of their members.
Rights of credit union members
Theright to participate in the management of the union. Members of credit unions have the right to participate in the general meeting of the union, to elect and be elected to the governing bodies, and to influence decision-making.
Theright to receive financial services. Members of credit unions have the right to receive financial services, including loans, deposits, consultations and other services provided by the union.
Theright to receive information. Members of credit unions have the right to receive complete and accurate information about the activities of the union, its financial condition, audit results and other important issues.
Theright to profit distribution. Members of credit unions have the right to distribute the union's profits in the form of dividends or other payments, in accordance with the union's charter and decisions of the general meeting.
Responsibilities of credit union members
Duty to comply with thecharter. Members of credit unions are obliged to comply with the charter of the union, implement decisions of the governing bodies and other internal documents of the union.
The obligation topay contributions on time. Members of credit unions are obliged to pay membership fees and other payments stipulated by the charter and decisions of the general meeting in a timely manner.
Duty toinform the union. Members of credit unions are obliged to inform the union of changes in their personal data, financial condition, and other important circumstances that may affect their relationship with the union.
Financial activities of credit unions
The financial activities of credit unions include granting loans, accepting deposits, managing financial resources and other operations that contribute to the achievement of the statutory objectives of the unions. The main aspects of the financial activities of credit unions include:
Lending. Credit unions provide loans to their members for various purposes, including consumer loans, business development loans, real estate loans, etc. Lending terms are determined by the union's charter and internal rules.
Deposit operations. Credit unions accept deposits from their members for a fixed term or on demand. The terms of accepting deposits are determined by the union's charter and internal rules.
Investment activities. Credit unions may invest in financial instruments, real estate, and other assets to generate additional income. Investment activities are carried out in accordance with the union's charter and legal requirements.
Risk management. Credit unions are required to manage financial risks, including credit risk, market risk, operational risk, and others. For this purpose, internal procedures and control mechanisms provided for by law and internal documents of the union are used.
Tax aspects of credit unions' activities
Tax regulation of credit unions in Ukraine is carried out in accordance with the Tax Code of Ukraine. The main tax aspects of credit unions' activities include:
Corporate income tax. Credit unions are subject to corporate income tax at a general rate of 18%. Credit unions may take into account income from the provision of financial services and expenses related to their activities when determining the taxable object.
Value added tax (VAT). Financial services operations, including lending and deposit taking, are exempt from VAT in accordance with the Tax Code of Ukraine.
Single social contribution (SSC). Credit unions, as employers, are obliged to pay the unified social contribution for their employees in accordance with the established rates and procedure.
Personalincome tax (PIT). Payments to members of credit unions, including dividends, interest on deposits, and other income, are subject to personal income tax at a rate of 18%.
Advantages and challenges of credit unions
Credit unions have a number of advantages that make them attractive to individuals and small businesses:
Accessibility offinancial services. Credit unions provide financial services to their members on favorable terms, making them accessible to a wide range of citizens and entrepreneurs.
Flexibility of lending terms. Credit unions can offer flexible loan terms that take into account the individual needs and capabilities of borrowers.
Support for local communities. Credit unions often have a regional focus and actively support the development of local communities by providing financial assistance and investing in local projects.
However, credit unions also face certain challenges:
Regulatory requirements. Credit unions must comply with numerous regulatory requirements and standards, which can be a complex and costly process.
Risk management. Credit unions must effectively manage financial risks, which requires a high level of professional training and the implementation of modern management techniques.
Competition with banks. Credit unions compete with banks and other financial institutions for customers and resources, which requires them to improve the efficiency and quality of service delivery.
Conclusion.
The legal regulation of credit unions in Ukraine is an important tool for ensuring their stable and transparent operations, protecting the rights of depositors and members, and enforcing financial discipline. It includes the regulatory framework, the activities of state regulatory and supervisory authorities, the rights and obligations of credit union members, financial activities, and tax aspects. Effective legal regulation contributes to the development of credit unions, increasing the availability of financial services for the population and small businesses, and ensuring the stable economic development of Ukraine.
So, it doesn't matter whether you need a lawyer's advice or a lawyer's advice. Legal marketplace "CONSULTANT" will help to solve any problem! All the necessary services at any time: analysis of documents, legal analysis of the situation, legal analysis of the situation, written consultation, verification of documents by a lawyer, legal analysis of documents, legal opinion of a lawyer, legal opinion of a lawyer, legal analysis. Are you looking for an online lawyer or a lawyer online? Choose CONSULTANT - a lawyer is always at your side!
Our legal opinion and legal opinion of a lawyer, legal analysis with a lawyer online and legal advice will help you at any time! Order a document review by a lawyer and general legal analysis right now! And with the services of a lawyer's consultation and document analysis with a written consultation - you will get the whole range of necessary services!
