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Business met with the Head of the State Tax Service of Ukraine

23/ 12/ 2020
  Yesterday, the European Business Association met with Oleksiy Lyubchenko, Head of the State Tax Service of Ukraine, and his expert team. Since our last meeting, the companies have accumulated a lot of unresolved issues due to frequent changes in tax law. Therefore, together with the Tax Service representatives, we discussed the latest alterations, as well as summed up the work of the State Tax Service for the year. This week the Association presented the results of the EBA Tax Index , which amounted to 2.90 points out of 5 possible (2.95 in the previous period). This indicator confirmed the negative assessment of the current state of taxation for businesses in Ukraine. The survey also found some improvement in the context of fiscal pressure; however, the quality of tax legislation leaves much to be desired. Thus, Mr. Lyubchenko thanked the Association for the research and declared that the bilateral communication between business and government will help solve identified systemic problems. During the meeting, it was also reported that in 2020, the State Tax Service managed to achieve a 42% increase in value-added tax revenues to the budget compared to last year. This result was made possible by the growing share of the legal economy. Besides, the State Tax Service has strengthened the analytical component of its activities, in particular, created a department of tax investigations, which will deal with international taxation issues. As of the end of the year, the State Tax Service ranks second among the state bodies of Ukraine in the number of provided digital services. During the year, more than 20 new services were added to the electronic office of the taxpayer, which relate to VAT administration, tax declaration, obtaining certificates, etc. The Tax Service has also launched chatbots in Telegram and Viber, where it is possible to get information about the status of budget payments, registration, and credentials, etc. The State Tax Service noted that members of the European Business Association are actively working with electronic tax services. Thus, EBA member companies are among the five most active users of software cash registers, according to the data provided by the Service. During this year, taxpayers appealed against 205 thousand blocked VAT invoices, of which the Tax Service, as noted, satisfied 196 thousand, namely 95% of complaints. The Tax Service experts stated that they are ready to promptly consider the company’s complaints regarding VAT invoices if there are reasonable clarifications of the problem. Business representatives were also asked to report to the Tax Service about inadequate behavior of its workers, particularly, if displays of corruption are related. We also discussed the issue of refunding overpaid taxes. Thus, it is necessary to submit an application to get a refund. If the overpayment needs to be first confirmed, the company can file an application for a respective inspection by tax officials. If your company is denied such an inspection, we suggest that you contact the European Business Association for support. Besides, it was announced that on January 1 next year, the activities of the Office of Large Taxpayers of the State Tax Service will be carried out under the new procedure without territorial affiliation of companies. Thus, each regional office will be responsible for certain sectors of the economy (Kyiv - finance, fuel, and energy sector; Dnipro - metallurgy; Kharkiv - mechanical engineering; Odesa - agriculture, Lviv – importers and companies with foreign financing). In 2021, the Office will serve only 1,476 companies that meet the requirements for inclusion in the register. Regarding the return of new excise stamps to companies, this issue is currently being discussed by the management of the State Tax Service of Ukraine with the State Enterprise” Polygraph Combine “Ukraina”. The State Tax Service promises to find the solution to the problem next year. Other issues were also mentioned in the discussion, namely, the settlement of inaccuracies in the databases of the State Tax Service and the State Customs Service, the application of the business purpose test to tax periods that ended before the entry into force of the Law of Ukraine №466, as well as clarification on declaration and calculation of income tax for foreign permanent establishments for 2020. The European Business Association thanks the representatives of the State Tax Service for this constructive dialogue. We hope to continue our effective cooperation the next year!

Yesterday, the European Business Association met with Oleksiy Lyubchenko, Head of the State Tax Service of Ukraine, and his expert team. Since our last meeting, the companies have accumulated a lot of unresolved issues due to frequent changes in tax law. Therefore, together with the Tax Service representatives, we discussed the latest alterations, as well as summed up the work of the State Tax Service for the year.

This week the Association presented the results of the EBA Tax Index , which amounted to 2.90 points out of 5 possible (2.95 in the previous period). This indicator confirmed the negative assessment of the current state of taxation for businesses in Ukraine. The survey also found some improvement in the context of fiscal pressure; however, the quality of tax legislation leaves much to be desired. Thus, Mr. Lyubchenko thanked the Association for the research and declared that the bilateral communication between business and government will help solve identified systemic problems.

During the meeting, it was also reported that in 2020, the State Tax Service managed to achieve a 42% increase in value-added tax revenues to the budget compared to last year. This result was made possible by the growing share of the legal economy. Besides, the State Tax Service has strengthened the analytical component of its activities, in particular, created a department of tax investigations, which will deal with international taxation issues.

As of the end of the year, the State Tax Service ranks second among the state bodies of Ukraine in the number of provided digital services. During the year, more than 20 new services were added to the electronic office of the taxpayer, which relate to VAT administration, tax declaration, obtaining certificates, etc. The Tax Service has also launched chatbots in Telegram and Viber, where it is possible to get information about the status of budget payments, registration, and credentials, etc. The State Tax Service noted that members of the European Business Association are actively working with electronic tax services. Thus, EBA member companies are among the five most active users of software cash registers, according to the data provided by the Service.

During this year, taxpayers appealed against 205 thousand blocked VAT invoices, of which the Tax Service, as noted, satisfied 196 thousand, namely 95% of complaints. The Tax Service experts stated that they are ready to promptly consider the company’s complaints regarding VAT invoices if there are reasonable clarifications of the problem. Business representatives were also asked to report to the Tax Service about inadequate behavior of its workers, particularly, if displays of corruption are related.

We also discussed the issue of refunding overpaid taxes. Thus, it is necessary to submit an application to get a refund. If the overpayment needs to be first confirmed, the company can file an application for a respective inspection by tax officials. If your company is denied such an inspection, we suggest that you contact the European Business Association for support.

Besides, it was announced that on January 1 next year, the activities of the Office of Large Taxpayers of the State Tax Service will be carried out under the new procedure without territorial affiliation of companies. Thus, each regional office will be responsible for certain sectors of the economy (Kyiv – finance, fuel, and energy sector; Dnipro – metallurgy; Kharkiv – mechanical engineering; Odesa – agriculture, Lviv – importers and companies with foreign financing). In 2021, the Office will serve only 1,476 companies that meet the requirements for inclusion in the register.

Regarding the return of new excise stamps to companies, this issue is currently being discussed by the management of the State Tax Service of Ukraine with the State Enterprise” Polygraph Combine “Ukraina”. The State Tax Service promises to find the solution to the problem next year.

Other issues were also mentioned in the discussion, namely, the settlement of inaccuracies in the databases of the State Tax Service and the State Customs Service, the application of the business purpose test to tax periods that ended before the entry into force of the Law of Ukraine №466, as well as clarification on declaration and calculation of income tax for foreign permanent establishments for 2020.

The European Business Association thanks the representatives of the State Tax Service for this constructive dialogue. We hope to continue our effective cooperation the next year!

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