Odesa Finance and Taxes

14/ 09/ 2021

The draft law №5600 on ensuring the balance of budget revenues caused a great resonance in society. Thus, representatives of the European Business Association and other business communities have repeatedly addressed numerous letters and statements to MPs and public authorities with a request not to support the Law Project №5600 and to hold thorough discussions with business. After all, according to business, the measures proposed by the Government during the economic crisis can only deepen the crisis in Ukraines economy, increase fiscal pressure on honest business and create a basis for tax arbitrariness. On September 14, 2021, during a meeting of the Financial and EBA Odesa Tax Committee in order to prepare our companies, we talked about the main innovations of the Law project №5600. Thus, we invited specialists in tax legislation AC Crowe Ukraine as speakers and experts. In particular, Leonid Karpov, Partner of AC Crowe Ukraine, Taxes and Tetyana Potopalska, Associate Partner of AC Crowe Ukraine, Expert Analyst on Taxation spoke about the radical changes in tax administration, tax debt and its consequences, powers of regulators, fines and other important nuances concerning income tax, value added tax and excise tax. They also paid special attention to changes in licensing in accordance with Law № 481, learned about the expansion of grounds for revocation of licenses, personal income tax, discussed tax changes in the field of ecology. The №5600 project is fraught with expanding the powers and rights of regulatory authorities and increasing fines for businesses, including: supervisory authorities are entitled to a written request for information not provided that the facts that indicate a violation of taxpayer tax, currency legislation (applicable law), but only in the presence of facts that may indicate such violations. Taxpayers will have to respond in writing to any suspicions of taxpayers and bear the administrative burden; procedures for the establishment of local taxes and fees by village, settlement, city councils and councils of united territorial communities are excluded from the scope of the basic law 1160 on regulatory policy and regulatory activities; hidden increase of fines for violation of deadlines for registration of tax invoices (tax invoices/adjustment calculation) in the Unified Register of Tax Invoices by squeezing the terms for which the largest amounts of fines are provided (40% and 50% of the VAT amount specified in such tax invoices/adjustment calculation): in the first case the terms are changed in the range from 61 to 180 calendar days (current norm - up to 365 days), in the second - in case of violation for more than 180 days (current norm - for 366 and more calendar days); the taxpayers complaint regarding the recognition of illegal and / or cancellation of the tax notice-decision on the addition of taxes and fines becomes the basis for the tax lien. That is, although tax liabilities are inconsistent and the taxpayer considers his rights violated and protected, the tax authorities are given the right to block his assets. Thank you to the speakers for meaningful speeches that will help companies better understand the novelties of tax law and prepare for these changes!

On September 14, 2021, during a meeting of the Financial and EBA Odesa Tax Committee in order to prepare our companies, we talked about the main innovations of the Law project №5600. Thus, we invited specialists in tax legislation AC Crowe Ukraine as speakers and experts.

In particular, Leonid Karpov, Partner of AC Crowe Ukraine, Taxes and Tetyana Potopalska, Associate Partner of AC Crowe Ukraine, Expert Analyst on Taxation spoke about the radical changes in tax administration, tax debt and its consequences, powers of regulators, fines and other important nuances concerning income tax, value added tax and excise tax. They also paid special attention to changes in licensing in accordance with Law № 481, learned about the expansion of grounds for revocation of licenses, personal income tax, discussed tax changes in the field of ecology.

The №5600 project is fraught with expanding the powers and rights of regulatory authorities and increasing fines for businesses, including:

supervisory authorities are entitled to a written request for information not provided that the facts that indicate a violation of taxpayer tax, currency legislation (applicable law), but only in the presence of facts that may indicate such violations. Taxpayers will have to respond in writing to any suspicions of taxpayers and bear the administrative burden;
procedures for the establishment of local taxes and fees by village, settlement, city councils and councils of united territorial communities are excluded from the scope of the basic law 1160 on regulatory policy and regulatory activities;
hidden increase of fines for violation of deadlines for registration of tax invoices (tax invoices/adjustment calculation) in the Unified Register of Tax Invoices by squeezing the terms for which the largest amounts of fines are provided (40% and 50% of the VAT amount specified in such tax invoices/adjustment calculation): in the first case the terms are changed in the range from 61 to 180 calendar days (current norm – up to 365 days), in the second – in case of violation for more than 180 days (current norm – for 366 and more calendar days);
the taxpayer’s complaint regarding the recognition of illegal and / or cancellation of the tax notice-decision on the addition of taxes and fines becomes the basis for the tax lien. That is, although tax liabilities are inconsistent and the taxpayer considers his rights violated and protected, the tax authorities are given the right to block his assets.

Thank you to the speakers for meaningful speeches that will help companies better understand the novelties of tax law and prepare for these changes!