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Partial renewal of tax audits

Please be informed that on 09 February 2021 the Cabinet of Ministers of Ukraine published Resolution No.89 dated 03.02.2021 “On Reducing the Time Limit for the Moratorium on Certain Types of Inspections”1( hereinafter Resolution No. 89), by which the government has resumed certain types of tax audits of legal entities suspended during the quarantine.

Resolution No. 89 provides for a reduction in the duration of the restrictions imposed by Paragraph 522  of subsection 10 of section XX “Transitional Provisions” of the Tax Code of Ukraine, with regard to the moratorium on certain types of inspections, allowing for such types of inspections of legal entities:

– temporarily suspended documentary and factual checks that were initiated before 18 March 2020 and have not been completed;

– documentary inspections, the right to which is granted subject to the requirements of Article 77.4 of the Code (this paragraph regulates the procedure for drawing up documents and preparing for planned inspections);

* this paragraph of Decree No. 89 is not in line with paragraph 9 of subsection 10 of section XX “Transitional Provisions” of the Tax Code of Ukraine, according to which information on the transfer of planned documentary audits, which in accordance with the schedule of planned inspections should have started between 18.03.2020 and the last calendar day of the month (inclusive) in which the quarantine expires, shall be included in the updated schedule which is published on the official website of the STSU, within 10 calendar days from the date of the end of the quarantine. Consequently, according to the logic of the Tax Code of Ukraine, an updated timetable from the State Tax Service of Ukraine should appear after Resolution No. 89 and before the start of scheduled inspections.

– documentary unscheduled inspections on the grounds defined in subsection 78.1.1 and/or 78.1.4 of paragraph 78.1 of Article 78 of the Code (failure to provide/not fully provide documents to the tax enquiry), of real economy entities which have formed a VAT tax credit by processing risky transactions for the acquisition of goods/services (from the list of risky taxpayers identified within the framework of the work of the Temporary Investigation Commission of the Verkhovna Rada of Ukraine on the investigation of facts of possible corrupt practices of public officials published in the media, which led to significant losses in the revenue part of the State Budget of Ukraine, formed in accordance with the Resolution of the Verkhovna Rada of Ukraine of 24.04.2020 № 568-ІХ);

– documentary unscheduled inspections of taxpayers for which tax information has been received indicating that the taxpayer has violated currency legislation in terms of compliance with deadlines for the receipt of goods in import transactions and/or currency proceeds in export transactions;

– documentary unscheduled inspections on the grounds defined in subsection 78.1.12 (repeat inspection upon the decision of a higher-level tax authority), 78.1.14 (inspections upon detection of a violation regarding controlled transactions), 78.1.15 (failure to submit a report on controlled transactions), 78.1.16 (inspection of the report on controlled transactions) of Article 78.1 of the Code.

The moratorium continues to apply to:

– inspections of individuals, sole proprietorships

– UST inspections

– applying penalties for violations of tax and UST legislation.