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.

The Ministry of Finance of Ukraine and the State Tax Service of Ukraine - if necessary, to develop and submit to the Cabinet of Ministers of Ukraine, and the Cabinet of Ministers of Ukraine – to submit to the Verkhovna Rada of Ukraine the Draft law of Ukraine introducing amendments to paragraph 73 of subsection 2 of section XX "Transitional Provisions" of the TCU, by replacing in the first paragraph and in the second paragraph words and figures "prior to December 31, 2019" with words "prior to entry into force of the Law of Ukraine" On Introducing Amendments to the Tax Code Ukraine Aimed at Improving Tax Administration and Elimination of Technical and Logical Inconsistencies in Tax Legislation".

Cabinet of Ministers of Ukraine
State Tax Service of Ukraine
Ministry of Finance

To undertake all required measures (including organizational and technical), which will ensure restoring SEA VAT indicators of those VAT payers whose registration had been annulled and subsequently renewed, without the need for the taxpayers to go to courts requesting restoration of such indicators. If it is necessary to implement foregoing recommendations - to develop and submit to the Cabinet of Ministers of Ukraine, while the Cabinet of Ministers of Ukraine – to approve draft amendments to the Procedure No.569 and/or other delegated legislative acts.

Cabinet of Ministers of Ukraine
State Tax Service of Ukraine
Ministry of Finance

To develop amendments to the USC Law (as well as Instruction No.449 and Procedure No. 435 in the respective part), aimed at ensuring practical possibility of writing off arrears amount under the unified social contribution, as well as penalties and fines accrued on it, to individual entrepreneurs who, as at the date of the Law No.592 entry into force included information about themselves in the USR and made an entry on activity termination (i.e. took separate actions established by paragraph 9-15 of Section VIII "Final and Transitional Provisions” of the USC Law, but as at the date of Law No.592 entry into force have pending arrears under the USC emerged in the period from January 1, 2017, to the date of registration of their activity termination).

State Tax Service of Ukraine
Ministry of Finance

To develop amendments to the USC Law (as well as Instruction No.449 and Procedure No. 435 in the respective part), aimed at abolition of legal grounds for accrual by the tax authority of the single contribution for June-August 2020 to persons who used the mechanism established by the paragraph 9-15 of Section VIII "Final and Transitional Provisions" of the USC Law, and received a positive decision on full or partial write-off regarding the USC arrears, accrued since January 1, 2017, as well as the relevant fines and penalties

State Tax Service of Ukraine
Ministry of Finance

To conduct a comprehensive awareness campaign about provisions of the Law No.592 for business entities that were established and registered before July 1, 2004, but information about which was not included in the USR.

State Tax Service of Ukraine

The State Tax Service of Ukraine – to issue a letter of explanation on the recordation of exchange rate differences under liabilities expressed in foreign currencies: i. set out clear criteria for determining whether non-resident companies are a subsidiary, associate, or a joint venture, a branch, a representative office or other division of companies - borrowers, ii. provide a list of criteria (non-exhaustive) proving that the obligation owed to non-residents under loan agreements was such that prepayment thereof was not planned and improbable in the near future.

The Ministry of Finance of Ukraine – issue a letter of explanation or a generalized tax consultation clarifying methodology of application of the TCU’s provisions on the foregoing matters.

State Tax Service of Ukraine
Ministry of Finance

The State Tax Service of Ukraine – to issue a letter of explanation on the debt-to-equity swap and increase of a debtor entity’s own capital at the expense of additional contributions: i. confirm that entities applying IFRS in their activities may recognize their liabilities settled if the creditor (who is not a related party) has forgiven the existing debt; ii. at the same time, however, make a reservation that: a. corresponding obligation’s reduction will affect the entity’s income only if the creditor is a third party and not the owner (participant, shareholder) of the respective debtor in such obligation; and that b. size of an owner's share, as well as claims received in exchange (to seek refund, payment of dividends, etc.) do not matter when applying this criterion.

The Ministry of Finance of Ukraine – issue a letter of explanation or a generalized tax consultation clarifying methodology of application of the TCU’s provisions on the foregoing matters.   

State Tax Service of Ukraine
Ministry of Finance

To amend Section 2.5 of the Methodological Recommendations Regarding Procedure of Cooperation between Divisions of the State Fiscal Service while organizing, carrying out and implementing materials of audit of taxpayers, approved by the Order of the SFS of Ukraine No.22, dated 31 July 2014, to ensure that materials of tax audit can be transferred to the investigatory units for financial investigations (i.e., tax police) only after final acknowledgement of the tax liability under the framework of administrative and/or judicial procedure (in case taxpayer sought judicial assistance - from the date when court decision entered into force).

State Tax Service of Ukraine

To ensure stability of respective laws and regulations, once the deficiencies in the VAT electronic administration functioning are eliminated, so that they will remain unchanged (or significantly unchanged) for a significant time. If the sense of predictability is achieved, it would enable the taxpayers to plan their activities accordingly and significantly decrease administrative expenses covering the cost of adjustment to the new rules and regulations.

Ministry of Finance
State Tax Service of Ukraine

To implement a transparent, informative and user-friendly interface of the electronic record system aimed at providing taxpayers with the information on the status of their VAT accounts. This could be implemented via a single electronic office of the taxpayer. Such electronic office shall provide comprehensive information to the taxpayer, so that the taxpayer could reconcile the information in the electronic administration system with the records of the VAT reports. It shall be ensured that the records made in the system cannot be changed manually. Besides, it shall also not only indicate the threshold amount calculated according to the prescribed formula, but also clearly itemize the algorithm of formation of the computed elements of the formula.

State Tax Service of Ukraine

To make enforceable in practice, the mechanism to return the excessive balance on the taxpayer's VAT account. In particular, there shall be no delays in communication between the tax authorities and the State Treasury regarding return of such excessive balance upon the taxpayer's request. This can be achieved, inter alia, by introducing personal disciplinary, administrative and financial liability of the officials of the tax authorities (for instance, in case of their failure to timely provide the State Treasury departments with the necessary information).

State Tax Service of Ukraine

To amend the Resolution of the CMU No.39 dated 17 January 2011, as well as Joint Order of the State Fiscal Service of Ukraine and the State Treasury of Ukraine No.68/23 dated 3 February 2011, to clearly state that the state treasury departments shall promptly pay to the taxpayer the VAT refund confirmed by a valid court ruling and with no further confirmation from the tax authorities.

State Tax Service of Ukraine

To revise the Procedure of Taxpayers’ Record Keeping to significantly narrow down the scope of discretionary power currently vested with the tax authorities. In particular, the following amendments are worth being considered: the grounds for launching verification of the tax payers’ location by the tax authorities shall be limited to include only limited and specific number of instances to be directly envisaged in the legislation (for instance, during a tax audit of a taxpayer deemed to be in violation of its duties); if the information on the taxpayer’s location is properly confirmed through the State Registrar, this should be regarded as the sufficient proof for tax authorities; moreover, in this case tax authorities shall not be entitled to carry out such verification for certain reasonable period of time (for instance, one year).

Ministry of Finance
State Tax Service of Ukraine

To guarantee the transparency and objectivity of the administrative appeal procedure by mandatory involvement of experts to be engaged in consideration of the taxpayers' complaints. Such experts shall be independent from the State Fiscal Service and the Ministry of Finance. Involvement of experts shall be mandatory irrespective of the amount of additional tax liabilities charged and fines and penalties imposed.

State Tax Service of Ukraine