On May 24, the UNIC Business Integrity Month event was held
On May 24, the UNIC Business Integrity Month event "Tax Efficiency during Wartime: Risks Analysis and Opportunities for Business and the State" was held in partnership with Sokolovskyi and Partners Law Firm and Arzinger Law Firm.
During the panel discussion, the speakers discussed how businesses should prepare for tax audits starting on July 1 and what taxpayers should pay attention to avoid court cases.
Tetyana Lysovets, Head of Litigation, Senior Partner, Attorney at Sokolovskyi and Partners Law Firm, and UNIC Tax Expert Group member, emphasized the following points:
- The draft law No. 8401, "On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Peculiarities of Taxation during the Martial Law Period," is steadily bringing business closer to the point when martial law tax exemptions will cease to be effective. If the draft law is adopted, most martial law provisions will cease to exist on July 1, even if the armed aggression continues.
- The document provides for the abolition of the simplified taxation system for the martial law period with the payment of 2% of the single social contribution, exemption from paying the single social contribution for individual entrepreneurs of the 1st and 2nd single tax groups, lifting the moratorium on the fines and penalties for violation of the amounts and terms of taxes, fees, and single social contribution’s payment, the procedure for using cash registers and lifting the moratorium on control and verification measures.
- The draft law also provides for the payment of tax liabilities on transactions involving the services supply by a non-resident in the customs territory of Ukraine by deferring the right to a tax credit for such transactions to the next reporting period. Effectively interest-free borrowing from business
- Regardless of whether the draft law will be adopted or not, businesses need to pull up all the tails in case of a return to the old system of taxation and inspections.
Kateryna Gupalo, Partner, Attorney at Arzinger Law Firm, also spoke about tax audits and how to prepare for them:
- Draft Law No. 8401 provides for the resumption of inspections, and all inspection restrictions will be lifted.
- Scheduled inspections are necessarily provided for in the schedule, published by December 25 of the year preceding the inspection year. Therefore, it’s worth checking whether your business is on such a list.
- If you see yourself on the inspection schedule, you can send a request to find out what criteria were used to classify you as a risky business. This way, you can assess the situation and make adjustments if necessary. If you believe that you have been included in the schedule unreasonably, then you should consider not being allowed to participate in the inspection.
- Unscheduled inspections occur without notice and may be conducted at any frequency if there are grounds for doing so. Such grounds may include: obtaining tax information, detecting inaccurate data, and claiming a budgetary refund.
- The so-called audit period covers 1095 days. However, it is necessary to start counting from the beginning of the quarantine on March 18, 2020, and the introduction of martial law, when the limitation period was suspended. Therefore, it is necessary to keep documents from March 18 and for +1095 days from the beginning of the quarantine in case of tax audits.
- Risks due to non-admission to the audit: the arrest of property and funds in the account. However, it is worth remembering that property that cannot be levied on is not subject to attack. A court must confirm the supervisory authority’s decision to arrest within 96 hours. In addition, the fund’s appropriation in a bank account requires the existence of tax debt and insufficiency of other property.
For reference: On May 29, the Verkhovna Rada approved as a basis the draft law No. 8401, "On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Peculiarities of Taxation during the Martial Law Period».The law is expected to enter into force on July 1, 2023, as stipulated by the agreements with the IMF.
To view the event, please follow the link: https://bit.ly/42d6SwY
The next UNIC Business Integrity Month event is an open dialog, "From Lugano to London: A vision of the business integrity in the reconstruction of Ukraine.»
To register for the event and ask questions to the speakers, please follow the link: https://forms.gle/rdjwjMEjgnJAL9oAA
