
Ministry of Finance has prepared a draft law meaning to reform financial responsibility for the violation of tax regulations
Jointly with the
experts of the interactive tax platform TaxLink,
the Ministry of Finance has
prepared the draft law “On
Amendments to the Tax Code
of Ukraine on the Improvement
of Mechanisms of Liability for
the Violation of Tax Regulations”.
What’s it about?
The goal of
the draft law is to
reform and to update liability
for the violation
of the tax
law. It contains
more effective mechanisms for the settlement of tax disputes
for taxpayers in cases, when
they are not responsible for detected tax
violations.
What is proposed?
Along with the
definitions of tax-related corpus delict, it is
proposed to introduce the principle
“guilt-based responsibility”
for taxpayers (which is applied
in all fields
of the Ukrainian
legal system) replacing the current
principle “responsible without guilt” applied to taxpayers.
The draft law is proposed
to be implemented
following the concept of “mindful
care”.
As per the
proposed law, a taxpayer shall be considered guilty
of a tax violation, if it
is proven that it was
possible for him/her to
follow rules and norms whose
violation is subject to sanctions
as per the
Tax Code of Ukraine, but
he/she did
not take sufficient steps to ensure the
required compliance. Due to this,
controlling authorities should be entitled
to additionally examine the documents
of a taxpayer confirming his/her mindful care.
Also, it is proposed to apply
a system of mitigating factors and circumstances releasing from responsibility; this would allow to
prosecute taxpayers for violations resulting, for instance, from the malfunction of the electronic
tax reporting system.
Along with detailed
regulations for the compensation of the illicit
decisions of controlling authorities, the draft law
also proposes a simplified procedure for this compensation.
If a taxpayer whose rights were
violated, has some problems proving
the sum of
damage, he/she can receive
some fixed compensation sum.
The legal nature
of delay penalties is proposed
to be changed
as well from
a sanction tool to a tool meant
to compensate the loss of
the value of money in
time.
Also, the draft law
significantly extends requirements to the content of
the tax authority
notification-decision. It must
contain a detailed description of the relevant circumstances
which shall be properly proven
as well as
proper reasons of the respective
controlling body to apply sanctions
to a taxpayer.
What comes next?
Presently, there is
a working group at the Ministry
of Finance operating as a consulting entity and improving the
draft law taking into account
international experience. The conclusions of the working
group’s meetings as well as
proposals and remarks aimed to
improve the document will be
taken into account in the
preparation of the final law
text.