The procedure and the list of documents for taxation exempting during the war

11/ 08/ 2022

On August 11, 2022, during the online meeting of the EBA Odesa Finance and Tax Committee, we discussed all the consequences that the business will face in the event of the adoption of the draft Procedure for confirming the impossibility of fulfilling tax obligations and the list of documents exempting such impossibility. Thus, the document is very important for both businesses and individuals who are unable to submit tax returns and/or pay tax obligations, and/or deal with unregistered tax invoices. At the same time, the Procedure defines separate grounds for legal entities and individuals (7 criteria for legal entities and 11 criteria for individuals). In particular, Vitalii Smerdov, a partner in the tax practice of Crowe Mikhailenko, outlined that for legal entities this is the loss (destruction or deterioration) of primary documents, computer and other equipment as a result of hostilities, acts of terrorism, sabotage caused by the military aggression of the russian federation, the inability to use or to take away documents, computer and other equipment as a result of hostilities, terrorist acts, sabotage caused by the military aggression of the russian federation, etc. Exemption from tax obligations, subject to compliance with the specified criteria, is not automatic and requires taxpayers to take active actions - in particular, collecting documents and submitting an application. In addition, if the tax office does not agree with the exemption, the taxpayer has the opportunity to appeal this decision. Among others issues, it was stated that the Lists of documents are only recommended and are not exhaustive. In the presence of other documents and information confirming the impossibility of fulfilling their tax obligations in a timely manner, taxpayers - legal entities, including in relation to their branch, representative office, separate or other structural subdivision, provide such documents (copies of documents).

On August 11, 2022, during the online meeting of the EBA Odesa Finance and Tax Committee, we discussed all the consequences that the business will face in the event of the adoption of the draft Procedure for confirming the impossibility of fulfilling tax obligations and the list of documents exempting such impossibility.

Thus, the document is very important for both businesses and individuals who are unable to submit tax returns and/or pay tax obligations, and/or deal with unregistered tax invoices. At the same time, the Procedure defines separate grounds for legal entities and individuals (7 criteria for legal entities and 11 criteria for individuals).

In particular, Vitalii Smerdov, a partner in the tax practice of Crowe Mikhailenko, outlined that for legal entities this is the loss (destruction or deterioration) of primary documents, computer and other equipment as a result of hostilities, acts of terrorism, sabotage caused by the military aggression of the russian federation, the inability to use or to take away documents, computer and other equipment as a result of hostilities, terrorist acts, sabotage caused by the military aggression of the russian federation, etc. Exemption from tax obligations, subject to compliance with the specified criteria, is not automatic and requires taxpayers to take active actions – in particular, collecting documents and submitting an application. In addition, if the tax office does not agree with the exemption, the taxpayer has the opportunity to appeal this decision.

Among others issues, it was stated that the Lists of documents are only recommended and are not exhaustive. In the presence of other documents and information confirming the impossibility of fulfilling their tax obligations in a timely manner, taxpayers – legal entities, including in relation to their branch, representative office, separate or other structural subdivision, provide such documents (copies of documents).