With the beginning of the full-scale invasion of the Russian Federation on the territory of Ukraine and, accordingly, the introduction of the legal regime of martial law on the basis of the Decree of the President of Ukraine dated 24.02.2022 No. 64/2022, the relevant specialized committees of the Verkhovna Rada of Ukraine and the deputy corps as subjects of the legislative initiative faced a number of tasks regarding settlement of social relations that exist and will arise in the relationship between taxpayers and bodies of the State Tax Service of Ukraine, its territorial divisions.
Everyone understood that the war in the country is a difficult test for everyone, regardless of whether the subject of tax relations has the status of a tax payer or the status of a controlling body. No one canceled the purpose and task of the latter, and the filling of the budget of the country in which the war is ongoing depends exclusively on the Ministry of Finance of Ukraine and the state bodies that it currently manages. One of such bodies is the State Tax Service of Ukraine.
In almost eight months of war, the Verkhovna Rada of Ukraine adopted more than twenty-two legislative acts amending the Tax Code of Ukraine (Tax Code of Ukraine). Let's consider the key changes to the PC of Ukraine that taxpayers should take into account.
Subsection 10 of Chapter XX "Transitional Provisions" of the PC of Ukraine has undergone significant changes, so we recommend that taxpayers familiarize themselves with them in more detail. We believe that each of the readers will definitely find answers to those questions that will not be revealed in this article.
Regarding the right of tax officials to conduct tax audits
With the adoption of the Law of Ukraine "On Amendments to the Tax Code of Ukraine and other legislative acts of Ukraine regarding the validity of norms during the period of martial law" dated 15.03.2022 No. 2120-IX, the effect of clause 522 of subsection 10 of chapter XX "Transitional provisions" of the PC of Ukraine is suspended for the period martial law, state of emergency. What does it mean?
Since martial law was imposed, the state decided that it was time to forget about quarantine. Currently, this is irrelevant and the right to conduct unscheduled documentary checks of taxpayers has been granted. Taxpayers are well aware of how tax officials conduct inspections and how it ends.
Perhaps someone will have a logical question: what about the responsibility of taxpayers and the guarantees of non-application of fines for the covid and wartime period? It's simple, the responsibility will come in the amount and according to the prescriptions of the PC of Ukraine.
The prescriptions of paragraph 16 of sub-clause 69.2 of clause 69 of subsection 10 of chapter XX "Transitional provisions" of the PC of Ukraine expressly provide that in case of detection of violations of the legislation as a result of inspections, taxpayers are subject to liability in accordance with this Code and laws, the control of the implementation of which is entrusted to supervisory bodies , taking into account the circumstances stipulated by subparagraph 112.8.9 of clause 112.8 of article 112 of this Code, which exempt from financial responsibility. At the same time, the requirements of the legislation regarding the moratorium on the use of fines do not apply.
An exception to the application of liability is provided only for those taxpayers who committed actions (actions or inaction) as a result of circumstances of force majeure (force majeure), which is explicitly stated in subsection 112.8.9 of clause 112.8 of article 112 of the Code of Ukraine.
Next, we will consider which terms have not been stopped.
According to sub-clause 69.9 of clause 69 of sub-section 10 of chapter XX "Transitional provisions" of the PC of Ukraine, the running of the terms was stopped. It should be noted that in accordance with this clause there are exceptions that apply to both taxpayers and regulatory authorities. The legislator maintains the priority of compliance with tax discipline by taxpayers and prevention of abuse of the discretionary powers of the supervisory body, therefore the deadlines were not suspended regarding:
– compliance with the terms of registration of tax invoices, calculations of adjustments to them in the Unified register of tax invoices, submission of reports, including the reporting provided for in Clause 46.2 of Article 46 of this Code, payment of taxes and fees by taxpayers;
– the terms of conducting chamber audits, drawing up acts, submitting and considering objections, determining monetary obligations, accepting, sending and appealing a tax notice-decision based on the results of chamber audits, charging penalties;
– deadlines for conducting actual and documentary unscheduled inspections, drawing up acts, submitting and considering objections, additional documents and explanations, determining monetary obligations, accepting, sending and appealing a tax notice-decision, administrative seizure of property based on the results of actual inspections.
If you have become the object of a tax audit and as a result received a relevant act, and subsequently a tax notification-decision, do not forget to file objections and/or appeal to the court in a timely manner in order to challenge the decisions of the controlling authorities. It should be reminded that in the case of filing a lawsuit, the subject of which is an appeal against the decision of the supervisory body, which added tax liability to you, such a decision is automatically suspended, and the amount of the tax liability remains undetermined until the court decides the case.
What about taxpayers who, due to the armed aggression of the Russian Federation, lost their primary accounting documents and who are on the list of enterprises for inspection?
In this case, it is necessary to act in advance and use those legal mechanisms that were introduced by the legislator. The given recommendation may be useful to those taxpayers who have not yet received the documents provided by the PC of Ukraine, which are the basis for an audit, in the electronic cabinet.
By the Law of Ukraine dated 01.04.2022 No. 2173 "On Amendments to the PC of Ukraine and other legislative acts of Ukraine regarding the administration of certain taxes during the period of martial law, state of emergency", clause 69 of subsection 10 of Chapter XX " Transitional Provisions" of the PC of Ukraine was supplemented by subsection 69.28. This clause establishes the rules for confirmation by the taxpayer of the data specified in the tax return, in case of loss of primary documents due to hostilities and occupation.
In case of loss and/or impossibility of export of primary documents, the taxpayer/tax agent submits a notification to the supervisory authority about the impossibility of export of primary documents. Such notification is submitted in an arbitrary form. It specifies the circumstances that led to the loss and/or impossibility of export of primary documents, tax (reporting) periods and a general list of lost documents (details, if possible). The notice is signed by the head of the enterprise and the chief accountant. After submitting such a notice, a moratorium is introduced on the conduct of documentary checks for the tax (reporting) periods specified in it.
If, after submitting a notification about the impossibility of exporting primary documents, the taxpayer / tax agent becomes aware of the loss of such documents, this taxpayer is obliged to submit a notification of the loss of primary documents to the supervisory body, indicating the circumstances of their loss.
Taxpayers / tax agents who submitted a notification about the loss of primary documents are not subject to verification by the controlling body for the tax (reporting) periods specified in the notification, including after the end of martial law.
We draw the attention of the readers: the loss of documents, which is not related to the stay in the territories on which hostilities are being conducted / were conducted, and in the temporarily occupied territories, does not entitle the taxpayer / tax agent to apply the provisions of this subsection. Therefore, we do not recommend abusing your rights in such a case.
The legislator assigns the duty of proving the absence of grounds for the taxpayer/tax agent to apply special rules for confirming the data specified in the taxpayer's tax return, provided for in subsection 69.28 of clause 69 of subsection 10 of chapter XX "Transitional provisions" of the Code of Ukraine, to the tax authority.
In case of refusal to apply the provisions of sub-clause 69.28 of clause 69 of sub-section 10 of chapter XX "Transitional provisions" of the PC of Ukraine, the tax authority shall issue a reasoned decision not later than one month from the date of receipt of the relevant notification from the taxpayer, indicating the grounds and evidence of such refusal.
The decision of the controlling body can be appealed in an administrative or judicial manner. Until the final decision is made in the case, the supervisory body cannot call into question the indicators of the tax reporting, as well as initiate any audit of the taxpayer / tax agent regarding the tax (reporting) periods specified in the relevant notification.
In the tax (reporting) periods specified in the relevant notice, the amount of tax liabilities from taxes and fees declared in tax returns for the specified tax (reporting) periods may not be revised in the direction of increasing the amount of the negative value of of the object of income tax taxation, declared in tax returns/calculations for the specified tax (reporting) periods, in the direction of increasing the amount of the budget value added tax refund, declared in the tax returns for the specified reporting periods.
Thus, using the specified legal mechanism, the taxpayer / tax agent will receive, even after the end or termination of martial law, a guarantee that the control authorities will not come to him with an inspection, and, in turn, will be released from responsibility for the lack of primary accounting documents , which are defined by the Law of Ukraine "On Accounting and Financial Reporting in Ukraine" dated July 16, 1999 No. 996-XIV.
Regarding the practical aspect of applying the changes made to the Tax Code of Ukraine during the period of martial law
The above-mentioned changes to the PC of Ukraine were introduced in the current year 2022 and are due to the introduction of martial law in the country, and therefore, will become practical only in the fall – during inspections of business entities.
Business entities that will be the object of a tax audit need to take into account the relevant changes now. Soon there will be an urgent need to find answers to the question: how should we act taking into account the specified changes?
Given the realities of today, it is worth paying special attention to the constant changes made by the legislator to the PC of Ukraine and other secondary legal acts that are part of the tax legislation of Ukraine and regulate the relevant group of tax relations. Tax legal relations can be conventionally divided into groups depending on the type of taxation and the tax paid by a person. And most of them have undergone changes.
First of all, it is necessary to pay attention to value added tax payers, excise tax payers, rent payers, environmental and land tax payers, tax on property other than land, and especially those payers who carried out or continue to carry out their activities in temporarily occupied territories, have separate units , property or property rights in the respective territories.
It should be noted that there is currently no practice of the Supreme Court on the practical application of the amendments made to the Criminal Code of Ukraine during the period of martial law. These issues are likely to be raised in future disputes between taxpayers and regulatory authorities.
If there is a need to protect rights, you can use the previous conclusions of the Cassation Administrative Court as part of the Supreme Court, issued earlier. However, one should change the approach and realize that legal norms are constantly undergoing transformation, and therefore the conclusions of the courts will have similar consequences.