International monetary system

There is little exaggeration in saying that international monetary developments affect all individuals as workers, consumers, travelers, businessmen producing goods for domestic or foreign markets, and investors at home or abroad. The channels which transmit the impact of monetary events to people in their various roles in society are numerous.

Business activity is heavily influenced by international monetary conditions affecting prices, exchange rates, interest rates, imposition of controls on exports or imports or on capital movements.

The international monetary system is a set of arrangements, rules, practices, and institutions under which payments are made and received for transactions carried out across national boundaries. The international system is concerned not only with the supply of international money but with the relationships among the hundred or so currencies of individual countries and with the pattern of balance-of-payments relationships and the manner in which they are adjusted and settled.

International monetary relations are governed by rules of the Articles of Agreement of the International Monetary Fund¹ and also by agreements and consultations among nations through other international institutions.

The international monetary system is afflicted with problems. The main reason is that the nations that participate in it are politically independent but economically and financially interdependent.This discrepancy determines the functions of the international monetary system; at its best, the system acts to reconcile the conflicting economic policies of its politically independent members.

In broad terms, the international monetary system involves the management, in one way or another, of three processes:

1. the adjustment of balance-of-payments positions, including the establishments and alteration of exchange rates.

2. the financing of payments imbalances among countries by the use of credit or reserves;

3. the provision of international money.

Taxation in ukraine

Under Ukrainian law, all Ukrainian legal entities, whether they have foreign investment or not, are subject to the profit tax law. Foreign entities that have a taxable permanent establishment in Ukraine are also taxed under this law.

Ukrainian taxes provide revenue for two tiers of the budget: national and local. The major taxes paid to the budget are: tax on income, tax on wages, profit tax, excise duty, state duty, value added tax (VAT) and others.

In Ukrainian government tries to create the climate in which business can thrive, to keep the tax burden as low as possible. It also attempts to eliminate tax allowances, which deprive the budget of tax revenues, and to improve tax collection.

Tax returns in Ukrainian legal entities are audited by the tax authorities at the time they are submitted.

If the company or a person assessed believes the assessment is incorrect in any way, an appeal may be lodged against it. The appropriate financial organ is required by law to reply to such an appeal within five days.

When a company resident in one country receives income or gains from source in another, or when shareholders and company are domiciled in different countries it is possible that incomes arising will be taxable in each country, i.e. taxed twice.

A number of countries have problems because of significant taxpayer non-compliance.

Along with cases of illegal evasion of tax obligations there are entirely legal ways of avoidance by which a person may so arrange his affairs as to minimize, or even eliminate, tax liability on his property and income.