Not tax audits.
If we are talking about inspections carried out by the relevant departments of Ministry of Emergency Situations, Ministry of Health, Ministry of Finance, Ministry of Internal Affairs, etc., the corresponding plan was approved by order of the State Regulatory Service of Ukraine of 15.11.2021 № 383 "On Approval of the Plan of complex measures of state supervision (control) in 2022".
The plan is available both on the website of the State Regulatory Service of Ukraine and on the Inspection Portal.
In the above mentioned orders there are only scheduled inspections, as for unplanned inspections, it is up to controlling authorities to decide.
If you think that you were included in this list illegally, remember that you have the opportunity, after receiving the order to conduct an inspection, to appeal the legality of this action in court.
As for tax audits, everything is not so straightforward. Supervisory bodies continue to conduct them, but ...
When a moratorium is not a "moratorium".
Since the introduction of the quarantine on the territory of Ukraine, the Government, the President of Ukraine and the Parliament of Ukraine, with the purpose of business support, have issued a number of regulatory legal acts.
One of the first acts was the Law No. 533-IX. A moratorium on documentary and factual inspections by the regulatory authorities was introduced.
This was followed by Law No. 591-IX. The moratorium was extended until the end of the quarantine.
But ... the Cabinet of Ministers of Ukraine with its decree of 03.02.2021 ¹ 89 decided to "cancel" it and from February 10 inspectors of the State Service of Ukraine, began their activities, despite the fact that there is a legal "moratorium".
We will tell you more about this legislative melodrama and possible consequences of its ending below.
Chronology of events
Decree No. 89
The Decree No. 89 was adopted in accordance with paragraph 4 of section "Final Provisions" of the Law No. 909-IX.
The Decree states that the Cabinet of Ministers of Ukraine has the right to reduce the line of action of restrictions, prohibitions, benefits and guarantees established by the relevant laws of Ukraine, adopted in order to prevent the occurrence and spread of acute respiratory disease COVID-19 on the territory of Ukraine.
But the Law No. 591-IX extended the term of the moratorium up to the last calendar day of the month (inclusive) of the month, in which the quarantine established by the Cabinet of Ministers of Ukraine comes to an end, and has the title "On Amendments to the Tax Code of Ukraine and other laws of Ukraine regarding additional support for taxpayers for the period of measures aimed at preventing the apparition and spread of coronavirus disease (COVID-19)".
The text of the explanatory memorandum of the draft law No. 591-IX substantiates the necessity of adopting this law by decreasing the business activity caused by the spread of coronavirus disease (COVID-19) and by emphasizing the need for state support measures for taxpayers.
The law was adopted in view of the fact that due to the continuation of restrictive quarantine measures, "there was a need to extend the terms of certain benefits and administrative relief for taxpayers. At the same time, mechanical extension of the terms for a predetermined number of days is not considered the best solution, since there is no accurate forecast of the spread of coronavirus disease (COVID-19).
Also in the explanatory note indicated that the abolition of many of the rules adopted to reduce the negative consequences for business could be acceptable only after the cancellation of restrictive quarantine measures introduced by the Cabinet of Ministers of Ukraine, so it is considered necessary, to extend the period of exemptions and administrative simplifications to the end of quarantine.
That is, the term of the moratorium could not be shortened a priori by Decree No. 89 as the moratorium itself was prolonged exactly for the purpose of taxpayers' support but not for the purpose of prevention of the outbreak and spread of acute respiratory disease COVID-19 on the territory of Ukraine.
Tax Code of Ukraine vs. the Decree № 89
What we have now is this:
- The Verkhovna Rada of Ukraine has imposed a moratorium on documentary and actual audits, with the exception of those provided for by para. 52-2 subsection 10 section XX "Transitional Provisions" of the Tax Code of Ukraine;
- the moratorium shall be effective until the last calendar day of the month (inclusive) when quarantine established by the Cabinet of Ministers of Ukraine on the whole territory of Ukraine to prevent spread of the coronavirus disease (COVID-19) on the territory of Ukraine ends.
- quarantine is imposed on the territory of Ukraine.
According to Art. 1 of the TCU it regulates relations in the field of taxes and fees, in particular, defines a comprehensive list of taxes and fees levied in Ukraine and the order of their administration, taxpayers and charges, their rights and obligations, the competence of regulatory authorities, powers and duties of their officials in the administration of taxes and fees, as well as liability for violation of tax laws.
According to paragraph 2 of Art. 2 of the Tax Code of Ukraine, the provisions of the Tax Code of Ukraine may be changed solely by amending it, and in accordance with paragraph 5.2 of the Tax Code of Ukraine in case the concepts, terms, rules and regulations of other acts contradict the concepts, terms, rules and regulations of the Tax Code, the concepts, terms, rules and regulations namely of the Tax Code are used to regulate taxation relations.
In fact, we have a moratorium enshrined in a specialized code (law), the effect of which is tied precisely to the duration of the quarantine and until appropriate changes are made to the TCU, given that the law has supreme legal force, such a moratorium will be valid until the last day of the quarantine.
It should be said that the tax law, in particular, is based on the principle of presumption of legitimacy of decisions of the taxpayer in the event that the rule of law or another legal act issued on the basis of the law or if the rules of different laws or different legal acts involve ambiguous (multiple) interpretation of the rights and obligations of taxpayers or regulatory authorities, resulting in a decision in favor of both the taxpayer and the regulatory authority - the decision to take
That is, in fact we have a moratorium on audits established by the Tax Code of Ukraine, except for such as:
- Documentary unscheduled inspections carried out at the taxpayer's request; documentary unscheduled inspections on the grounds defined in subparagraphs 78.1.7 and 78.1.8 of paragraph 78.1 Article 78 of the TC of Ukraine
- Actual inspections as to violation of legislative requirements:
- accounting, licensing, production, storage, transportation and circulation of fuel, ethyl alcohol, alcoholic beverages and tobacco products
- purposeful use of fuel and ethyl alcohol by taxpayers;
- Equipping excise warehouses with flow meters and / or equalized flow meters; exercising the functions defined by the legislation in the field of production and circulation of ethyl alcohol, alcoholic beverages and tobacco products, fuel on the grounds specified in paragraphs 80.2.2, 80.2.3 and 80.2.5 of paragraph 80.2 of Article 80 of the Tax Code of Ukraine.
Also, we should add that the decree number 89 still applied to legal entities and not individuals and individual entrepreneurs.
With a plan - schedule of tax audits can be found here: https://tax.gov.ua/diyalnist-/plani-ta-zviti-roboti-/545291.html
That is, in fact, you have two options for behavior:
- Allow supervisory authorities to conduct an audit;
- Not to allow the auditors to conduct audits and in court to prove that the conduct of such an audit - it is unlawful and to cancel it.
However, remember that not allowing an audit entails a number of negative consequences. To minimize, prevent and eliminate the consequences in such situations, you may need legal support of tax lawyers.
In addition, it should be noted that there is positive judicial practice concerning the illegality of conducting inspections during the statutory moratorium. According to the results of consideration of the relevant statements of claim courts often come to unlawfulness and cancellation of the relevant orders.