From now on, the parties to a contract may, by mutual agreement, choose not to use certificates of completion. Instead, the provision of services may be recorded by means of an invoice signed by the contractor, which is recognised as a primary document for accounting and tax purposes.
At the same time, the law does not abolish primary documents or remove oversight, but merely gives businesses the right to choose:
* certificates of completion become optional;
* the parties may continue to use certificates if they deem it appropriate;
* by agreement between the parties, an invoice signed by the contractor may be used in place of a certificate of completion.
This approach is in line with international practice. In most countries worldwide and within the EU, the basic document for confirming services rendered is an invoice, not a separate certificate of completion. This also aligns Ukrainian rules with EU practices and simplifies cooperation with foreign partners.
Why this is important for business
The practice of mandatory certificates of completion is a legacy of the post-Soviet document management model and creates a significant administrative burden on businesses. It is estimated that a company director spends up to 5% of their working time managing these certificates, and an accountant up to 13%. In large companies, up to 15 employees may be involved in this process.
Preparing and signing a single certificate costs an average of 200–300 UAH, whilst a business’s monthly expenditure on handling such documents amounts to around 4,000 UAH per company.
It is estimated that abolishing the mandatory requirement for certificates of work performed will enable Ukrainian businesses to save up to 20 billion UAH annually.
In addition to saving resources, the new rules:
* simplify document flow in domestic and foreign economic activities;
* reduce barriers to the export of services;
* create more flexible conditions for cooperation with international partners;
* enable faster decision-making, which is particularly important under martial law.
CASE Ukraine’s role in driving change
It is important to note the contribution of the expert community and think tanks in driving this reform. In particular, as early as 2022, the CASE Ukraine team identified the mandatory requirement for certificates of completion as one of the key barriers to business.
A study was then conducted, which revealed significant losses of time and money due to the circulation of these certificates, as well as the fact that this practice did not comply with international standards. The study noted that:
* certificates of completion were used to confirm the reality of expenses when calculating income tax;
* courts do not recognise certificates as sufficient proof of the full performance of obligations;
* in most countries around the world, a document such as a ‘certificate of completion’ does not exist at all;
* in international practice, the fact of expenses incurred is confirmed by a payment made in accordance with an invoice;
* producing a single set of certificates costs 200–300 UAH, and the total cost of preparing certificates can amount to 2,000–4,000 UAH per month per company;
* the total economic losses resulting from the circulation of certificates were estimated at tens of billions of hryvnias annually;
* Most companies and accountants believed that it would be easier for them to operate without mandatory certificates.
It was precisely these arguments that formed the basis for further discussion and the drafting of legislative amendments.
The adoption of Bill No. 14023 is another step towards deregulation, reducing bureaucracy and creating a modern business environment in Ukraine.
We would like to thank all business associations, think tanks, the Ministry of Economy, the Government and Members of Parliament for their joint work on this decision. Special thanks go to the expert community and the CASE Ukraine team, who consistently raised this issue and demonstrated the need for change based on analysis and facts.