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The Business Ombudsman Council provides recommendations to state bodies on the basis of individual cases and in accordance with published systemic reports. Here we have collected information on the implementation status of systemic recommendations only.

Report name
Issued recommendations
Execution status

Systemic report "Challenges for government and business in dealing with local government"

To finish drafting regulations governing the decentralization of government powers in all branches and spheres providing administrative and social services, and clearly identify the functions of local executive bodies and LGAs at all levels in terms of providing such services.

Ministry of Regional Development, Construction and Residential Services

In process
— comments: A number of laws have been adopted , the provisions of which regulates the issue of delegating powers from executive to local authorities, in particular, powers in the field of architectural and construction supervision (control) and improvement of urban planning legislation; provision of an administrative service for issuance of permits and provision of administrative services through the ASCs (Administrative Services Centers).

To establish a constitutional basis for regulating the devolution of power and simultaneously instituting state oversight of LGA decisions while continuing to work on amending the Constitution as necessary, via Draft Law No.2217а dated 1 July 2015 "On amendments to the Constitution of Ukraine (regarding decentralization of power)".

Ministry of Regional Development, Construction and Residential Services
Verkhovna Rada of Ukraine

In process
— comments: Status as of 10 December 2015 Committee's submission for review was presented. Pending review.

To adopt the Draft Law No.2489 "On serving in local government agencies" dated March 30, 2015, which defines the principles, legal and organizational basis for serving in local government agencies, regulates the status of LGA employees, and ensures comprehensive reforms of serving in LGAs, keeping in mind the staffing needs for decentralization.

Verkhovna Rada of Ukraine

In process

To institute drafting transparent competitive procedures for selecting personnel to staff LGAs and the executive bodies of local governments, and formulating the necessary qualification requirements.

Ministry of Regional Development, Construction and Residential Services

In process
— comments: As of today, the outdated procedure for conducting a competition for filling vacancies of civil servants listed in the CMU Resolution No.169 dated 15 February 2002, is being followed.

To join forces with all-Ukrainian associations of LGAs to draft a law establishing the procedure for the further functioning or elimination of county councils in counties whose boundaries coincide completely with those of territorial communities.

Ministry of Regional Development, Construction and Residential Services
Regional State Administrations
All-Ukrainian associations of LGAs

In process

To support the Bill "On prefects," which give prefects the power to rescind any acts by local government agencies that violate the Constitution or Laws of Ukraine and simultaneously appeal to a court.

Ministry of Regional Development, Construction and Residential Services
Verkhovna Rada of Ukraine

In process

To provide a mechanism for taking individuals working at local government agencies to court, for instance, by amending the Criminal Code and the Code on Administrative Violations to increase the liability of government personnel at the local level.

Ministry of Regional Development, Construction and Residential Services

In process

To draft amendments to the Law of Ukraine "On protecting the atmosphere" to ensure that a list and document requirements for commercial entities seeking a stationary plant emissions permit are established in a special law.

Ministry of Justice
Ministry of Environment and Natural Resources
State Regulatory Service

In process
— comments: The Ministry of Ecology and Natural Resources informed that the recommendation was taken into account by the MEDT. The Draft Law is aimed at improving procedures for issuing permits and establishing basic requirements in respective laws regulating issuance of permits, determined by the Laws of Ukraine "On Administrative Services" and "On Permit System in the Sphere of Economic Activities".

To draft amendments to Arts. 53-5 of the Code of Administrative Violations to increase the liability of government officials in proportion to the severity of their breaches, such as ignoring deadlines, both for approving land development documentation and for reviewing applications for permits to draw up land development plans.

Ministry of Justice
Ministry of Agricultural Policy and Food
State Regulatory Service

In process

To ensure the adoption of changes to CMU Resolution No.284 dated 19 April 1993, to establish: a clear and thorough list of circumstances for compensating damages to land owners and users; a regulated procedure for reviewing requests to establish the extent of damages; timeframes for reviewing requests to establish damages and making the necessary decision.

Ministry of Justice
Ministry of Environment and Natural Resources
Ministry of Agricultural Policy and Food
State Regulatory Service

In process

Systemic report "Challenges and problems in the sphere of competition protection and oversight"

To adopt legislative amendments aimed at unleashing the AMCU's existing institutional capacity.

Antimonopoly Committee of Ukraine

In process
— comments: The relevant Draft Law No.6724 dated 14 July 2017 "On amending certain laws on protection of economic competition" has been adopted in the 1-st hearing on 9 November 2017.
The AMCU's advocacy activities has to be broadened by (i) strengthening cooperation with other government bodies; and (ii) improving existing practice of issuing practical recommendations based on the prior market studies performed by the AMCU.

Antimonopoly Committee of Ukraine

In process
— comments: The AMCU continues work aimed at improving cooperation with the state authorities, in particular by signing memorandums and holding public events (conferences).
To develop a roadmap aimed at implementing the NCDP Concept for 2014-2024 by the ministries and other state bodies.

Antimonopoly Committee of Ukraine

In process
— comments: Currently the AMCU is elaborating an Action plan focused on implementation of the National Concept on Competition Development in Ukraine for 2014-2024. The relevant draft shall be prepared and submitted to the CMU until the end of 2018.
To accelerate working relations between the AMCU and the state authorities (with the focus on sectoral regulators) by expanding the practice of entering into respective cooperation agreements/memorandums on competition-related issues.

Antimonopoly Committee of Ukraine

In process
— comments: The AMCU has signed memoranda on cooperation with the National Commission, which carries out state regulation in the fields of energy and utilities, the Ministry of Agricultural Policy and Food as well as with the State Service of Ukraine for food safety and consumer protection.
In order to facilitate effective exercise of powers vested with the AMCU in connection with anti-trust clearance of privatization transactions, ensure that not only the AMCU itself but also other authorities should play active role in eliminating some of the existing impediments. Hence, the Council recommends as follows:a) To specify the exact scope of duties to be borne by each institution involved into privatisation process (for instance, the SPF, sectoral regulators, etc.).b) To introduce transparent procedure for the exchange of information between the AMCU and the relevant bodies (including the SPF, the regulators managing the state enterprise, bidders, etc.) for the purpose of the AMCU’s transaction clearance. If such an approach were to be employed (for instance, between the AMCU and the SPF), this would help addressing allegation of the business that the SPF might provide inaccurate or incomplete information about the potential target.

Antimonopoly Committee of Ukraine
Verkhovna Rada of Ukraine
State Property Fund of Ukraine

In process
— comments: On 18 January 2018 the VRU adopted the Law of Ukraine No.7066 "On privatization of state and municipal property (the Law No.7066"), which entered into force on 7 March 2018 and which, among other things, further specifies the powers of state authorities in the field of privatization.

To amend the Procedure of Notifying the AMCU for Prior Approval of Concentration of Undertakings to ensure that consideration of consent on concerted actions due to execution of non-competition agreement is conducted on the basis of simplified procedure, provided that receipt of concentration consent is already carried out on the basis of simplified procedure.

Antimonopoly Committee of Ukraine
Verkhovna Rada of Ukraine

In process
— comments: Currently, the AMCU is elaborating the draft law on amending the Law of Ukraine “On protection of economic competition” in respect of procedure for obtaining the prior approvals of concentrations.

To amend Article 52, para. 2, part 2 of the Competition Protection Law to ensure clear identification of parties liable for failure to notify about concentration.

Antimonopoly Committee of Ukraine
Verkhovna Rada of Ukraine

In process
— comments: Currently, the AMCU is elaborating the draft law on amending the Law of Ukraine “On protection of economic competition” in respect of procedure for obtaining the prior approvals of concentrations.
To set clear deadlines for consideration (investigation) of cases on abuse of monopolistic (dominant) market position by introducing respective amendments into Chapter VII of the Competition Protection Law and/or Chapter VII of the Rules of Consideration of Applications and Cases on Violation of Legislation on Economic Competition, approved by the Resolution of the AMCU No.5, dated 19 April 1994 (hereinafter - the "Rules of Consideration of Applications on Violation of Competition Legislation").

Verkhovna Rada of Ukraine

In process
— comments: The relevant Draft Law "On amending certain laws of Ukraine to ensure adherence with the principles of procedural justice and increasing the efficiency of proceedings in cases of violations of the legislation on the protection of economic competition" No.6746 dated 17 July 2017 has been adopted in the 1-st hearing on 9 November 2017.
To adjust the AMCU's internal decision making procedure to ensure that when rendering an initial decision on its' merits falls under the authority of the AMCU's Board of Commissioners, the adoption of such a decision shall require majority of the AMCU's composition established by law (i.e., 5 persons), save for the Commissioner who investigated the case. The latter, nonetheless, should remain to be involved into decision making process by being entitled to present results of investigation during the respective procedural hearing.

Antimonopoly Committee of Ukraine

In process
— comments: The recommendation is reflected in the Draft Law No.6746 (amendments to the Article 48 of the Law of Ukraine "On protection of economic competition").
The AMCU, prior to the adoption of the Methodology for calculating the amount of fines, to carry out monitoring of application of the existing Recommended Explanations and regularly (at least once per quarter) publicize information about its' practical application.

Antimonopoly Committee of Ukraine

In process
To adopt the Draft Law No.2431 in so far as it envisages existence of the Methodology for calculating amount of fines as binding legislative act.

Verkhovna Rada of Ukraine

In process
— comments: The Draft Law “On amending the laws on protection of economic competition regarding determination by the AMCU’s bodies of the amount of fines for violation the legislation on the protection of economic competition” No.2431 dated 19 March 2015 has been forwarded for the repeated second hearing.On 16 June 2016, the table with revisions has been prepared.
To amend the Competition Protection Law to enable judicial challenge of the amount of fine imposed by the AMCU body, subject to existence of the Methodology for calculating the amount of fine for breach of competition laws, adopted in the form of legislative act, whose application is mandatory for both the AMCU and the bodies of judicial power.

Verkhovna Rada of Ukraine

In process
— comments: The Draft Law “On amending the laws on protection of economic competition regarding determination by the AMCU’s bodies of the amount of fines for violation the legislation on the protection of economic competition” No.2431 dated 19 March 2015 has been forwarded for the repeated second hearing.On 16 June 2016, the table with revisions has been prepared.
To introduce electronic database that would enable applicants to retrieve general information about the current status of consideration of requests/applications lodged with the AMCU, which is not confidential in nature.

Antimonopoly Committee of Ukraine

In process
— comments: Although the AMCU has generally supported the BOC"s recommendation, it emphasized the need to allocate additional funding in order to implement the recommendation.

To amend Article 40 of the Competition Protection Law in order to:a) set maximum time limits for (i) responding with further explanations and/or clarifications requested by the AMCU; and (ii) lodging objections by the parties that disagree with the AMCU’s interim procedural decisions in cases on mergers/ concerted actions;b) establish specific/maximum time limits for the AMCU’s consideration of requests on access to the case materials lodged by the parties;c) expressly enable interested parties to lodge requests with the AMCU to seek initiation of hearing on concentrations/concerted actions, with such requests being subject to the AMCU’s mandatory consideration and provision of grounded answer within reasonable time limits.

Antimonopoly Committee of Ukraine
Verkhovna Rada of Ukraine

In process
— comments: The AMCU will consider the possibility for implementation the aforesaid recommendation during preparation of the next set of amendments to legislation.
To reduce fines for parties other than the first one to file, thus making the existing leniency regime more inclusive.

Verkhovna Rada of Ukraine

In process
— comments: The relevant Draft Law "On amending certain laws of Ukraine to ensure adherence with the principles of procedural justice and increasing the efficiency of proceedings in cases of violations of the legislation on the protection of economic competition" No.6746 dated 17 July 2017 has been adopted in the 1-st hearing on 9 November 2017.
Methodology for calculating amount of state aid.

Cabinet of Ministers of Ukraine
Antimonopoly Committee of Ukraine

In process
— comments: The draft document is currently being approved with the Energy Community, as requested by the Electricity Market Law.

Systemic report "Reducing the risk of corruption and attracting investment to the construction industry"

To propose amendments to Ukrainian land legislation to directly obligate LEBs to re-sign leasing agreements for land plots with new owners of the properties following a simplified, transparent procedure

Ministry of Regional Development, Construction and Residential Services
Ministry of Justice

In process

Systemic report "Abuse of powers by the law enforcement authorities in their relations with business"

To prohibit criminal prosecution of person for tax evasion until tax liability is finally “approved/acknowledged” (i.e., as foreseen in Section 3.5.6. of the Coalition Agreement between the Factions of the Deputies in the Verkhovna Rada of 8th Convocation, being an integral part of the Program of Activity of the Cabinet of Ministers of Ukraine (the “Coalition Agreement”)). In order to do so the Council suggests amending Articles 212 and 212-1 of the CCU to expressly provide that “actual non-arrival of money to budgets or state earmarked funds” (in Article 212 of the CCU) and “actual non-arrival of money to mandatory state social insurance funds” (in Article 212-1 of the CCU) means “failure to pay the sums of approved/acknowledged tax obligation in compliance with time limits, established by law”.

Verkhovna Rada of Ukraine

In process
— comments: The following draft laws has been prepared: The Draft Law “On Amending the Tax Code of Ukraine regarding special aspects of criminal proceeding in the tax relations and administration of taxes and levies” No.3448 dated 10 November 2015.On 21 April 2016 the aforesaid draft law was sent for further review by the Parliamentary Committee on Taxation and Customs Policy.ii.On 20 March 2018 the Draft Law “On National bureau of financial security of Ukraine” No.8157 was sent for consideration to the relevant committee.

To provide persons authorized to perform the organizational/management functions (for example, a CEO, a financial director, a chief accountant, a member of the board of a joint stock company) on behalf of a legal entity and regarding which investigative actions are conducted, the certain procedural rights, envisaged under the Article 42 of the CPCU ("Suspect, Defendant") for persons who have been notified of suspicion.The foregoing idea might, for instance, be fulfilled by expanding the scope of persons, who fall under the category of “parties” or “participants” of the criminal proceeding, by introducing respective amendments to the Chapter 3, §5, Article 3 of the CPCU (“Court, Parties and Other Participants of the Criminal Proceeding”).

Verkhovna Rada of Ukraine

In process

To amend the Law of Ukraine "On Judicial Expertise" to establish that standard time limits for conducting expertise shall be 3 months subject to extension by an investigatory judge/court, if necessary. The Council also proposes amending the Code of Ukraine On Administrative Violations to establish expert's liability for the breach of maximum time limits, foreseen for conducting expertise.

Verkhovna Rada of Ukraine

In process

Systemic report "Natural monopolies vs. competitive business: how to improve relations"

To oblige operators of engineering network system to publish technological requirements for hook-ups and warehouse facilities to facilitate the implementation of investment programs.

National Energy and Utilities Regulatory Commission

In process
— comments: According to the information provided by the NEURC, this requirement is currently established for gas transmission and gas distribution system operators due to the relevant provisions of the Code on Gas Transmission System, and the Code on Gas Distribution Systems.Also, in accordance with the clause 4.1.38 of the Code on Distribution Systems, the DSO shall publish and update all necessary information on their official websites and bear responsibility for timely disclosure of information and its authenticity. However, current legislation does not oblige operators of other engineering network systems (heat, water supply and sewage) to publish information on technological requirements for hook-up to networks.
To require licensees to disclose all consumer applications to hook up and their status, etc.

National Energy and Utilities Regulatory Commission

In process
— comments: According to the information provided by the NEURC, starting from 11 December 2017 applicants for hook-up services provision can monitor online the detailed flow of events concerning the organizational and technical measures that are carried out by the electricity transmission company in order to provide the hooking-up service. Operation of the personal online cabinet is regulated by the paragraph 4.9 of the Code on Distribution Systems. At the same time, this requirement is not implemented in relation to other engineering network systems (gas, heat, water supply and sewage).
To ensure that the situation is analyzed on a regular basis and that licensees duly fulfil their duties.

Antimonopoly Committee of Ukraine

In process
— comments: As it is set forth in the Memorandum, concluded between the AMCU and the NEURC, they agreed, among other things, (i) to exchange information on problematic issues in the markets of electricity, natural gas, heat-, water supply and sewage for ensuring the possibility of taking prompt actions aimed at their settlement within the limits of their competence, (ii) create an efficient competitive environment for introduction of new models of electricity, natural gas, heat-, water supply and sewage, simplifying the procedure of hooking-up services peovision: http://www.amc.gov.ua/amku/control/main/uk/publish/article/130144;jsessionid=847042A438B05A2E8334164C53780D1B.app1 However, the Council is not aware of the nature, frequency, and efficiency of measures taken by the NEURC jointly with the AMCU within the framework of the Memorandum implementation.

To develop the legal framework for establishing the authority of local government agencies and the procedure for determining the priority of contracts for the purchase of heat energy, should two or more heating supply companies be connected to the heating network.

Ministry of Regional Development, Construction and Residential Services

In process
— comments: Article 21 of the Law of Ukraine "On heat supply" sets forth the conditions for the increase of competition in the heat energy market and establishes basic principles of such competition, which, however, were not further developed. In particular, the procedure for conducting tenders for prioritizing conclusion of the heat energy purchase contracts, should two or more heating supply companies be connected to the heating network, is not currently developed or approved.
To hold consultations with licensees, experts and the public on issues regarding hooking-up of producers and consumers to heating networks and ways to resolve them.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services
Antimonopoly Committee of Ukraine

In process
— comments: The NEURC in cooperation with the consultants of the USAID Municipal Energy Reform is working on drafting relevant regulatory documents for hooking up to centralized heating supply system. Within the framework of this USAID project, the NEURC’s specialists are members of a working group on the development of the procedure (methodology) for hooking up to heat networks, calculation of the hooking-up fee and financing of hook-up services, etc. The said procedures (methods) are not yet approved and therefore relevant consultations should continue to be carried out, if necessary
To renew the rules for connecting to water supply and sewage systems so that they regulate, among others, the issue of providing/receiving Technical Specifications, establishing the hooking-up fees for the water supply and sewage networks based on a formula using the costs of the works and services needed at various stages in this process.The new rules should clearly define “access” and “connection/hook-up” as well as contain norms that regulate a number of issues related to:issuing and receiving hook-up permission;drawing up construction blueprints showing the water and sewage connections;providing and receiving Technical Specifications, which includes establishing the order or methodology for formulating the value of specification issuing services;establishing the procedure for paying for a hook-up that includes the value of works and services at various stages of this process, including works and services related to hooking up to water supply and sewage networks;determining the equity contribution, with th s intention of preventing cases where customers are pressured under the guise of an equity contribution to buy materials and/or to carry out certain works on behalf of the provider that are not directly related to the procedure of hooking up ordered by the customer;covering temporary connections;launching networks for further transporting of water resources;changing ownership to prevent abuse and setting excessive installation requirements.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services

In process
— comments: According to the information provided by the NEURC and the Ministry of Regional Development, Construction and Residential Services, the latter is currently working on amendments to the Rules for the use of centralized municipal water supply and sewage systems in settlements of Ukraine, in particular, to regulate the issue of specifications for hooking-up to centralized water supply and sewage systems. The relevant task is included in the Plan of applied scientific and technical developments in the priority areas of activity in the spheres of construction, housing and communal services and regional development of the Ministry of Regional Development, Construction and Residential Services in 2017. To date, the relevant changes have not been developed and approved.
To develop a plan for the switch from cost-plus rate setting to RAB methodology for power and gas companies and implement all the necessary measures to ensure incentive-based rate setting in centralized heating, water and sewage services.

National Energy and Utilities Regulatory Commission
Ministry of Regional Development, Construction and Residential Services

In process
— comments: During 2015-2017, the NEURC has developed a regulatory framework for implementation of incentive management in the fields of energy and utilities, namely power transmission, power distribution field, heat- water supply and sewage. Thus, the Council is currently attempting to identify areas in which the concept of switching from "cost plus" rate setting methodology to RAB has not been yet developed and needs further regulatory settlement.
To draft amendments to the respective asset valuation methodology to improve the base for assessing and verifying results.

National Energy and Utilities Regulatory Commission
Ministry of Energy and Coal Industry
Ministry of Regional Development, Construction and Residential Services
State Property Fund of Ukraine

In process
— comments: The representatives of the NEURC, together with the SPFU representatives, participated in the working group on development of amendments to the Methodology for valuation of assets of natural monopolies entities, business entities on adjacent markets in the field of combined production of power and heat energy, approved by the SPFU Order No.293, dated 12 March 2013. Based on Working Group joint work results and cooperation with the USAID Project consultants, the changes were prepared for consideration and proposals, as well as sent for the SPFU’s consideration by the letter No.1510/18/7-17 dated 13 February 2017. Preparatory work for introduction of incentive management in the field of heat supply with respect to development of aggregate cost of reproduction value, which shall be attached to the Methodology, is carried out directly by the participants of the pilot project, namely PJSC "Kyivenergo" and PJSC "Oblteplocomunenergo" in Chernihiv with the participation of the State Enterprise "Scientific - Research institute of Building Production”.

To set up a single information system for the sector and a benchmarking system.

National Energy and Utilities Regulatory Commission

In process
— comments: As reported by the NEURC to the Council, the development and creation of an information system for collection of information from licensees is provided by the District Heating Regulatory Reform Support Program at the expense of the Swedish for International Cooperation and Development Agency (SIDA) Grant. However, the Council is not aware of the actions taken by the NEURC to create such a system.
To establish the requirement on service providers to present information about key indicators of their operations on their websites.

National Energy and Utilities Regulatory Commission
Regional State Administrations
Municipal Executive Authorities

In process
— comments: The requirements for the service providers to disclose main indicators of their activity on web pages are determined by the Law of Ukraine "On the specifics of access to information in power and natural gas supply, centralized hot water, centralized drinking water and sewage services", which was adopted by the Parliament on 10 December 2015. However, service providers mostly did not ensure implementation of the Law.

Systemic report "Problems with administering business taxes in Ukraine"

To ensure proper technical functioning and maintenance of the VAT electronic administration system. Manual control and unauthorized intrusion into the system, resulting, inter alia, in a questionable "losses" of VAT invoices, refusals to register VAT invoices due to "state 9", etc., shall be eliminated. Same approach shall be employed in relation to those instances, when the records in the VAT return and the VAT administration system do not reconcile. This can be achieved, inter alia, by introducing personal disciplinary, administrative and financial liability of the officials of the tax authorities. In addition, the Tax Code shall be amended to provide for financial liability of third-party entities providing technical maintenance and support of the electronic administration system (for instance, sanctions shall be imposed if the taxpayer is unable to register VAT returns due to inaccessibility of the system or its' failure).

State Tax Service of Ukraine

In process
— comments: Implementation of the Law No.1797 dated 21 December 2016 "On Amendments to the Tax Code of Ukraine to Improve the Investment Climate in Ukraine" is still in process of its' eventual implementation. It is aimed at simplifying tax administration and is an important part of the reform of the SFS. This is a joint work of the VR deputies, experts and business representatives dating back to the last year.

To ensure that the local tax authorities are trained and prepared to effectively support the taxpayers with all kinds of issues arising in connection with the implementation of VAT electronic administration. Besides, the State Fiscal Service shall promptly collect information about typical problems arising in connection with the VAT electronic administration followed by the practice of issuing formal clarifications.

State Tax Service of Ukraine

In process
— comments: This recommendation has been discussed many times during the meetings between the BOC and the SFS. Although, the SFS provides taxpayers with explanations of the most typical problems, the territorial tax authorities are usually not ready to effectively support taxpayers for all types of issues arising from the functioning of the electronic system of VAT administration.
The Tax Code shall provide for an effective procedure of administrative appeal (please see Section "Administrative appeal" for details) whereby the supervising tax authorities will monitor compliance by the lower-level tax authorities with all VAT refund procedures.

State Tax Service of Ukraine

In process
— comments: On October 21, 2015, the Ministry of Finance has issued the Order No.916 "On approval of the procedure for registration and filing of complaints by taxpayers and their review by the controlling bodies".In particular, in accordance with the Order No.916, the review of the complaint materials in a closed meeting takes place with the participation of the authorized representative of the BOC; the BOC has the opportunity to file its own objections.However, the administrative appeal procedure needs further improvement.
To amend the Tax Code to provide for personal disciplinary, administrative and financial liability of the officials of the tax authorities for unlawful delays with processing VAT refunds.

Ministry of Finance

In process
To ensure proper and effective control over regulatory practices employed by the local tax authorities, especially when they did not comply with the procedures, envisaged by the Procedure of Taxpayers' Record Keeping. Strict compliance therewith shall be ensured through personal liability of the officials of the tax authorities for malpractice.

State Tax Service of Ukraine

In process
— comments: Local control agencies are vested with servicing functions only; whereas the control is transferred to the MD SFS.The procedure for holding liable remains difficult to apply, enabling the officials to evade disciplinary liability.
To apply and interpret tax laws and regulations with the due regard being given to common court practice shall be communicated by the State Fiscal Service of Ukraine to the tax authorities of all levels. The practice when, despite existence of similar cases (or even regarding the same taxpayer) the tax authorities continue embarking upon questionable argumentation which have been routinely assessed by courts in the taxpayer's favour, shall be eliminated.

State Tax Service of Ukraine

In process
The administrative appeal procedures available to the taxpayers willing to challenge the results of the tax audits shall be effective and time-efficient, rather than formalistic as it often appears to be (please see Section "Administrative appeal" for details). While appointing and performing the tax audit, the tax authorities shall strictly comply with the procedures prescribed by the law, and the supervising authorities shall ensure such compliance in an effective manner. The Tax Code shall be amended to specify particular sanctions to be imposed on the officials of the tax authorities for procedural and other violations during appointment and performance of the tax audit. Such sanctions shall be personalized and variable (from reprimand to dismissal and fine) depending on the degree of violation by the particular official.

Ministry of Finance
State Tax Service of Ukraine

In process
— comments: Although this recommendation has been discussed repeatedly, the extent of its' practical implementation remains quite limited.

Instances of abuse of power by the tax authorities in launching criminal proceeding based on the results of the tax audit or against the taxpayer's officials shall be eliminated. Prevention of fraud and malpractice in the course of launching and performing of tax criminal investigations could be guaranteed by "checks and balances" system and personalized liability of the tax authorities' officials. The BOC will address these issues in its systemic report for the forth quarter of 2015 on abuses of criminal procedural law by law-enforcement agencies.

State Tax Service of Ukraine

In process
— comments: In 2016, the Methodological Recommendations were amended respectively. The number of criminal proceedings has generally decreased. Only in rare cases the criminal proceedings are initiated before the administrative appeal procedure completed.

To forbid the tax authorities to initiate criminal proceedings against the taxpayer's officials based on the results of the tax audit until the taxpayer's tax obligation is duly acknowledged (i.e., until the administrative appeal and / or consideration in a court are finished). If the results of the tax audit are successfully challenged by the taxpayer in court, the criminal proceedings initiated merely based on results thereof, shall be immediately ceased.

Ministry of Finance

In process
— comments: Article 56.22. of the Tax Code of Ukraine provides as follows: "If a taxpayer challenges a decision of a control authority to the court or through the appropriate administrative procedure, such taxpayer cannot be accused of tax evasion exclusively on the ground of such decision of the control authority until the proceedings have been ultimately settled by the court or through the appropriate administrative procedure."

To reflect in the Tax Code and enforce in practice the approach evidenced by a widespread judicial practice, whereby minor mistakes or deficiencies in primary documents cannot be used as a ground for charging additional tax liabilities, penalties and fines on the taxpayer.

Ministry of Finance

In process
— comments: The Supreme Court in its decisions specifies that the facts of the occurrence of errors in executed primary documents or the absence of individual ones, shall not, as such, constitute the ground for the conclusions on the absence of the actual business transaction, - provided that the other data or evidence prove otherwise. The implementation of this recommendation requires preparation of a special explanation of the SFS with concrete examples of such errors.
To implement a systemic risk-based approach to conducting unscheduled tax audits. Such approach shall ensure comprehensive evaluation of the particular taxpayer and the necessity of subjecting its activities to unscheduled tax audit to the contrary of the current approach whereby the tax authorities are empowered to launch unscheduled tax audit even if a single (and often casual) criterion pops out.

State Tax Service of Ukraine

In process
— comments: Pursuant to Article 78 of the Tax Code of Ukraine the unscheduled documentary tax audit shall be appointed if at least one of the grounds specified in the article is applicable.There is a positive dynamics, however, – the number of unscheduled tax audits somewhat reduced. At the same time, it appears that the risk-oriented system is virtually never employed in practice.At present, the issue of including the taxpayers to the plan of audits became rather significant. According to the Tax Code, the plan shall be issued for the entire year. However, since February 2018, the SFS began to make massive changes to the plan of audits in violation of direct provision of the Tax Code.
To disclose to the general public statistics on the administrative appeal procedure on a regular basis (for instance, on a quarterly basis). Such information shall include, inter alia, information regarding the total number of complaints, the results (positive and negative) of administrative consideration of complaints at each appeal level, etc.

State Tax Service of Ukraine

In process
— comments: The statistics is disclosed to public on the SFS web-site, but its form and information content shall be improved.

To amend the Tax Code to foresee personal administrative and financial liability of the officials of the tax authorities for instances of malpractice and nonprofessional behaviour.

Ministry of Finance

In process
— comments: The respective amendments to the legislation are being approved by the Ministry of Finance together with the relevant regulatory authorities.
To ensure that the principle of interpreting ambiguous provisions of the Tax Code in favour of the taxpayer shall be consistently complied with by the tax authorities at all levels. An effective "checks and balances" system and introduction of personalized liability for the malpractice committed by the officials of the tax authorities shall be used as tools to achieve this.

State Tax Service of Ukraine

In process
— comments: The BOC and the SFS discussed this recommendation during the number of meetings. However, its’ practical application is still very limited. Both the SFS and the local tax authorities apply, as a rule, fiscal approach to the interpretation of the provisions of the Tax Code.Therefore, in practice this principle almost never applies. The exception is the established position of the Supreme Court or the official position of the Ministry of Finance.
To forbid the tax authorities to found their conclusions (formalized in the act of the tax audit) on internal biased information, which is not available to the taxpayer and the public. Further, the tax authorities cannot be motivated by informal internal instructions regarding the fines and penalties to be collected from the taxpayers.

State Tax Service of Ukraine

In process
— comments: The BOC and the SFS discussed this recommendation during the number of meetings. However, its' practical application is still very limited.
The decisions of the tax authorities to appeal in the court of law shall be subject to "second-eye review" (for instance, by the supervising tax authority) from the perspective of expediency and legal feasibility. Such approach appears to be timely given the recent changes in the procedural law whereby the court fee relief enjoyed earlier by the tax authorities was further discontinued.

State Tax Service of Ukraine

In process
— comments: The BOC and the SFS discussed this recommendation during the number of meetings. However, its' practical application is still very limited due to a large number of current disputes (around 100,000). At the same time since the 2016, all appeals to the Supreme Court are subject to the SFS's prior approval.