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EBA Expert Talks on Tax changes

01/ 07/ 2020

The EBA WUO Tax Committee has started the series of meetings about the Law of Ukraine “On Amendments to the Tax Code of Ukraine to improve tax administration, eliminate technical and logical inconsistencies in tax legislation” №466-IX (hereinafter the “Law”) which came into force on May 23, 2020.

On July 1, 2020, within the online expert discussion, the invited experts Maksym Voytsekhovskyy and Ivan Durkach shared their understanding of novation in the field of income tax and on the process of inspections under the new law.

Maksym Voytsekhovskyy, Head of KPMG Lviv office noted that the Law is called to implement the number of principles of the International Plan to combat Base Erosion and Profit Shifting (BEPS) so its emergence goes in line with global initiatives to achieve transparency in taxation.

Ivan Durkach, the Senior lawyer of Advice Group, noted that the Law also contains the number of changes in the relationships between the taxpayer and supervisory authority during inspections and the procedure of appealing the results of inspections. The Law details the tax authorities’ powers, which is a positive aspect during inspections as it reduces the possibility of abuse of their procedural rights.

According to the experts, the innovation is the introduction of the institution “fault of the taxpayer” and the list of circumstances under which the taxpayer is released from liability, or such liability can be mitigated. Thus, the legislator introduces the so-called “adversarial principle” in tax relations. One of the elements of the offense will be the establishment of guilt as part of it.

The participants agreed that the Law has the right to become innovative if some of its principles are finalized to preserve the balance and comply with the tax legislation principles pledged in the Tax Code of Ukraine. We will evaluate its effectiveness later, namely during its application and formation of practice, including judicial.

On behalf of the meeting participants, we express our gratitude to Igor Pikhurko, Head of the Tax Committee of the EBA Western Ukrainian office, for professional moderation of the meeting, and to Maksym Voytsekhovskyy and Ivan Durkach for provided qualified information on changes in current tax legislation.

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