Changes to the Regulations on Conducting Tax Checks Have Been Introduced

Since December 8, 2023, changes established by Law No. 3453-IX “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine Regarding the Cancellation of the Moratorium on Tax Checks” have entered into force.

Safe Access to Territories, Premises and Property

According to subpar. 69.2(2), clause 69, subsec. 10, Chapter XX “Transitional Provisions” of the TC, documentary and factual checks during martial law shall be carried out in the presence of safe conditions for their conduct:

– access, admission to territories, premises and other property used for conducting economic activities, and/or are objects of taxation used to receive income (profit), or related to other objects of taxation of such taxpayers;

– access, admission to documents, certificates on financial and economic activity, received income, expenses of taxpayers and other information related to the calculation and payment of taxes, fees, payments, on compliance with the requirements of the law, the implementation of control of which is entrusted to the controlling bodies, as well as to financial and statistical reporting in the order and on the grounds determined by law;

– carrying out an inventory of fixed assets, tangible assets, funds, withdrawal of residual assets, cash.

Effect of the Moratorium on Documentary Checks

According to subpar. 69.35(1), clause 69, subsec. 10, Chapter XX “Transitional Provisions”, temporarily, from December 1, 2023, a moratorium is in effect:

1) to conduct documentary checks of taxpayers of the first and second groups of single taxes (except for checks related to the termination of business activities of an individual entrepreneur and/or those conducted at the taxpayer’s request) – until December 1, 2024;

2) to conduct documentary checks of taxpayers whose tax address, as of the date of the beginning of the temporary occupation, are the territories of Ukraine temporarily occupied by the Russian Federation – until the last day of the month in which the temporary occupation of the relevant territories was completed, and in the case of a change of location by the taxpayer to another territory of Ukraine, – until the date of state registration of the change of location, except for unscheduled documentary checks:

3) to conduct documentary checks of taxpayers whose tax address, as of the date of the beginning of hostilities, is the territory where active hostilities are taking place, until the last day of the month in which the hostilities in the relevant territory ended, and in the event of a change by the taxpayer location to another territory of Ukraine, – before the date of state registration of the change of location;

4) to conduct documentary checks of taxpayers whose tax address, as of the date of the beginning of possible hostilities, is the territory of possible hostilities – until the last day of the month in which the possibility of hostilities in the relevant territory was terminated, and in the event that the taxpayer changes its location to another territory of Ukraine, – until the date of state registration of the change of location;

5) to conduct factual checks at the location of taxation objects or objects related to taxation, which as of the date of the beginning of the temporary occupation were located in the temporarily occupied Russian territories of Ukraine – until the date of completion of the temporary occupation of the respective territories;

6) to conduct factual checks at the location of taxation objects or objects related to taxation, which as of the date of the start of active hostilities were located in the territories where active hostilities are being conducted – until the date of the end of hostilities on relevant territories;

7) to conduct factual checks at the location of objects of taxation or objects related to taxation, which as of the date of the beginning of possible hostilities, were located in the territories of possible hostilities (except for inspections of taxpayers who carry out activities in the field of production and/or sale of excise goods, organization and conduct of gambling (gambling business) in Ukraine, purchase/sale of foreign currency, entities that conduct economic activity without state registration as a business entity) – until the date of possible termination of hostilities on respective territories.

The list of territories on which hostilities are (were) conducted or temporarily occupied by the Russian Federation is determined in accordance with the procedure established by the Cabinet of Ministers of Ukraine.

Drawing Up a Plan-Schedule of Documentary Checks

According to subpar. 69.35(2), clause 69, subsec. 10, Chapter XX “Transitional Provisions”, from December 1, 2023 to December 31, 2024, only the following can be included in the plan-schedule of conducting scheduled documentary checks for 2023 and 2024, inclusive:

1) taxpayers who carry out/have carried out activities in the field of production and/or sale of excise goods;

2) taxpayers who carry out/have carried out activities in the field of organization and conduct of gambling (gambling business) in Ukraine;

3) taxpayers who provide/have provided financial and payment services;

4) non-residents who carry out/have carried out activities in Ukraine through separate divisions, including permanent representative offices, and/or separate divisions that meet at least one of the following criteria:

– the level of income tax growth is 50 percent or lower than the growth level of the taxpayer’s income;

– declaration of accrued salary in the absence of declaration of the object of income tax or declaration of income exempted from taxation in accordance with the international treaty of Ukraine;

5) other taxpayers who, on the basis of the indicators formed based on the results of the 2021 calendar year, meet at least one of the following criteria:

– the level of income tax payment is 50 percent or lower than the level of tax payment in the relevant industry. This criterion does not apply to single tax payers;

– the level of VAT payment is 50 percent or lower than the level of tax payment in the relevant industry. This criterion does not apply to taxpayers whose operations on the export of goods outside the customs territory of Ukraine constitute 25 percent or more of the total volume of supply, and at the same time the income tax payment level is at least 50 percent of the income tax payment level in the relevant industry;

– receivables exceed payables by more than two times;

– the total amount of expenses reflected in the tax declaration on property status and income is 75 percent or more of the amount of the total annual income declared in such a declaration, provided that the amount of the total annual income received from the conduct of business activities is UAH 10 million or more;

– accrual and/or payment by a tax agent – a legal entity of income in the form of a salary amounts to or is of less than the average salary in the relevant industry in the relevant region (based on the main place of accounting in the territorial body of the central executive body which implements the state tax policy).

Law No. 3453-IX