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 "Administering taxes paid by business" |
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 |
Implemented
|
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 |
Implemented
|
|
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 |
Implemented
|
|
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 |
Implemented
|
|
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 |
Implemented
|
|
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 |
Implemented
|
|
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 |
Implemented
|
|
Systemic report "Abuse of powers by the law enforcement authorities in their relations with business" |
State Tax Service of Ukraine |
Implemented
— comments:
The BOC's recommendation has been implemented via adoption of the SFS' Order dated 18 July 2016 No.633 "On amending the SFS's order dated 31 July 2014 No.22"
|
Systemic report "Problems with administering business taxes in 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 |
Implemented
|
State Tax Service of Ukraine |
Implemented
— comments:
In 2017, the SFS and the State Treasury of Ukraine implemented the 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. Such electronic office provides comprehensive information to the taxpayer, so that the taxpayer is now enabled, albeit not to the full extent, to reconcile the information in the electronic administration system with the records of the VAT reports.
|
|
State Tax Service of Ukraine |
Implemented
— comments:
See the Law No.1797 dated 21 December 2016 "On Amendments to the Tax Code of Ukraine to Improve the Investment Climate in 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 |
Implemented
— comments:
The Law No. 1797 of 21.12.2016 provides for the introduction of an automatic VAT refund register. This is a new transparent approach to VAT refunds. However, for the purpose of the corresponding payment, it is necessary that the tax authorities in the field make relevant information about the court decision "in force" to the Tax Bloc.
|
|
Ministry of Finance |
Implemented
— comments:
Commencing March 2016, the fiscal authorities are no longer entitled to issue the form 18-OPP (notice on the absence of legal entity at its location).Respective provisions have been excluded from the Procedure for Taxpayer Registration pursuant to the Order of the Ministry of Finance No.375 dated 18 March 2016.
|
|
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 |
Implemented
— comments:
On 21 October 2015, the Order No.916 "On approval of the procedure for registration and filing of complaints by taxpayers and their review by the controlling bodies" was adopted.In particular, according to the Order No.916, the consideration of the complaint materials may take place with the participation of the BOC’s and Minfin's authorized representatives; the BOC is entitled to submit its own objections. Yet, the administrative appeal procedure needs further improvement.
|