Tax Index with the support of the InMind research company EBA Tax INDEX 2 nd wave, results of the 2-3 quarter 2012 Conducted by the EBA with the support of InMind research company November 2012

Tax Index with the support of the InMind research company 2 Project Methodology The presented results of EBA Tax Index are based on the results of the 2 nd wave of the expert survey, conducted among EBA members. Methodology: EBA Tax Index means the evaluation of 4 factors of tax conditions for doing business: Evaluation of quality of the tax legislation Evaluation of complication/ease of the tax administration Evaluation of the fiscal pressure level Evaluation of quality of the tax service To define the level of each of the 4 factors a 5-point scale was used, where 1 and 5 are the extreme opposite evaluations of the factor. When calculating the integral tax index, means of each factor and its weight were used. Factors’ weights are defined by expert evaluations of EBA Tax Committee members: tax legislation– 15%; tax administration – 40%; fiscal pressure – 30%; quality of tax service – 15%.

Tax Index with the support of the InMind research company 3 Report notice The results are presented by each of 4 factors, in particular: Mean of each factor Numeric value, which divides the upper half of the sample from the lower part (median) The results are also segmented by company size in accordance to Commercial Code of Ukraine: –Small enterprises: 50 or less employees, gross income – less than UAH 70 million during the financial year 2011 –Medium enterprises: 50 to 250 employees, gross income – UAH 70 to 100 million during the financial year 2011 –Large enterprises: more than 250 employees, gross income – більше UAH 100 million during the financial year 2011 Participants: 59 representatives of EBA member companies Timeframes: the data is collected in October-November 2012 and reflects the situation in 2-3 quarter 2012 Research Conduction: The research is conducted by the EBA, analytic support provided by InMind research company

Tax Index with the support of the InMind research company 4 Overall results 1 wave, wave, ІІ-ІІІ quarter 2012 TAX INDEX (integral rate) 1,902,42 Tax legislation1,762,32 Easiness of tax administration1,622,32 Fiscal pressure2,112,56 Quality of tax service 2,362,53 Minimum Index value – 1, maximum – 5.

Tax Index with the support of the InMind research company Overall results - chart

Tax Index with the support of the InMind research company 6 EBA Tax INDEX: Components

Tax Index with the support of the InMind research company 7 Tax Legislation Mean 2,32 Median 2,00 Evaluations by 5-point scale with extreme values: 1 – tax regime was profoundly preventing your company’s progress: 5 – tax regime was definitely promoting your company’s business progress Question: To what extent tax regime was facilitating investments and your company’s activity in 2-3 quarter 2012? Means of evaluation of tax legislation depending on the enterprise size Negative values Neutral value Positive values

Tax Index with the support of the InMind research company 8 Ease of Tax Administration Mean 2,32 Median 2,00 Evaluations by 5-point scale with extreme values: 1 – very complicated 5 – very easy Question: Could you, please evaluate the complication/easiness of tax accounting and tax administration in 2-3 quarter 2012? Means of evaluation of ease of tax administration depending on the enterprise size Negative values Neutral value Positive values

Tax Index with the support of the InMind research company 9 Fiscal Pressure Mean 2,56 Median 3,00 Evaluations by 5-point scale with extreme values: 1 – fiscal pressure caused significant difficulties in company’s activity 5 – there were no signs of fiscal pressure at all in the activity of the company Question: Could you, please evaluate fiscal pressure on your company in 2-3 quarter 2012? Means of evaluation of the fiscal pressure level depending on the enterprise size Negative values Neutral value Positive values

Tax Index with the support of the InMind research company 10 Tax Service Mean 2,53 Median 3,00 Evaluations by 5-point scale with extreme values: 1 – complete dissatisfaction by the quality of the received service 5 – complete satisfaction by the received service Question: Could you please estimate the quality of the service your company received from tax bodies in 2-3 quarter 2012 ( by the quality of the service you should understand the stuffs’ affability and competence, the transparency of the received answers, the operational efficiency and convenience of the declaration submitting process etc.)? Means of evaluation of the tax service depending on the enterprise size Negative values Neutral value Positive values

Tax Index with the support of the InMind research company 11 EBA Tax INDEX: Auxiliary Indicators

Tax Index with the support of the InMind research company 12 Effective Tax Rate: Tax Reform Impact Change of the effective tax rate in 2-3 quarter 2012 Definition: Effective tax rate – ratio of the income as to the financial accounting and the income as to the tax report Increased Reduced

Tax Index with the support of the InMind research company 13 Fiscal Pressure Manifestation Which evidence of the fiscal pressure have you experienced in 2-3 quarter 2012? No inspections 7 and more inspections Number of tax inspections in your company in 2-3 quarter 2012

Tax Index with the support of the InMind research company