The Ministry of Finance has prepared the draft law “On Amendments to Art. 201 of the Tax Code of Ukraine regarding the Registration of Tax Bills/Calculation of Corrections in the Single Register of Tax Bills”. The draft law is to be submitted to the Cabinet of Ministers soon.

What’s it about?

Since July 1, the system has been in operation which stops the registration of high-risk tax bills (clause 201.16 of Art. 201 of Chapter V of the Tax Code of Ukraine) automatically. The system is designed to encounter tax manipulations and erosion of state budget revenues through tax fraud. Every day, the registration of approximately 0.4% of the total amount of tax bills is suspended. This affects manipulated tax bills as well as few tax bills of companies from the real sector of the economy.

The registration or the denial of registration / correction calculation of tax bills in the Single Register of Tax Bills is decided by the entitled SFS commission. According to the law, notifications about registration or denial of registration are sent to taxpayers within 5 working days upon receipt of explanations and documents.

However, the Tax Code does not stipulate any consequences for taxpayers in the case, if the SFS commission has not taken any decision on the registration or denial of registration / correction calculation of tax bills in the Single Register of Tax Bills and/or has not sent this decision to the respective taxpayer within 5 working days.

What’s the benefit?

The draft law sets a clear timeframe (5 days) for the State Fiscal Service to block or to register a suspended tax bill. If this timeframe has not been met, the respective tax bill shall be automatically captured in the Register. Thus, the SFS commission will be motivated to take decisions faster, as taxpayers shall not suffer from delays in the operation of the tax authority.

To make the work of the SFS commission as effective as possible, more personnel will be involved to speed up the examination of suspended tax bills.

The Ministry of Finance urged to include this essential regulation in the Law 1797 (which launched the system for the automatic suspension of high-risk tax bills) in December 2016, when this law was being prepared, but it was excluded from the final law text during the debates in the Parliament.

Having analyzed all processes of the system operation, the Ministry of Finance proposes to include this regulation in the law to simplify procedures for business.