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Klaus Kessler

Rechtsanwalt (Deutschland)
Partner
Niederlassungsleiter
Phone: +49 89 928 780 702
E-Mail

Contact
Yuri Nikolaychuk

Rechtsanwalt (Ukraine), Dipl.-Jur., LL. M., Steuerberater
Associate Partner
Phone: +380 (44) 586 23 03
E-Mail

Legislative Changes Restoring Taxpayers’ Rights and Responsibilities during Martial Law in Ukraine

After the beginning of the Russian military aggression, the Ukrainian parliament passed a number of legislative changes aimed, on the one hand, at stimulating economic activity of taxpayers and, on the other hand, at protecting taxpayers from liability for late filing of tax declarations or payment of taxes in the times of the Russian military aggression. Now, the legislature has decided to restore the rights and obligations of both taxpayers and tax authorities, primarily to ensure collection of tax revenues during the martial law period. An overview of the changes introduced by the Law No 2260-IX of 12 May 2022, which enters into force on 27 May 2022 (the provisions on desk audits come into force on 2 June 2022) is provided below.

1. Resumption of tax filing and tax payment obligations
- The taxpayers who have the possibility to fulfill their tax obligations, namely to file tax returns, to pay taxes and fees, to register VAT invoices, will be exempt from the liability for the failure to perform their tax obligations in the period from February 24, 2022 until May 27, 2022, provided that such taxpayers:

  • register VAT invoices and adjustment to the VAT invoices in the Unified Register of VAT Invoices by July 15, 2022;
  • submit tax declarations by July 20, 2022; and
  • pay taxes and duties no later than July 31, 2022.

- The taxpayers who regained the ability to perform their tax obligations which were due in the period from February 24, 2022 until the date on which a taxpayer regained the ability to perform its obligations, will be exempt from the liability for the failure to perform their tax obligations, if such obligations are performed within 60 calendar days from the first day of the month following the month in which the taxpayer regained the ability to perform tax obligations.

- Group 3 single taxpayers paying single tax at the rate of 2% will be exempt from the liability for the failure to fulfill their tax obligations in the period from February 24 until the date of transition to the payment of single tax at the rate of 2%, if they perform their tax obligations within 60 calendar days from the date of transition to the payment of single tax at the rate of 2%.

- The penalties and late payment interest for the understatement of tax liability during the martial law period will not apply if the taxpayer submits an adjusted tax declaration to correct the errors in accordance with Article 50 of the Tax Code until July 25, 2022.

- The Ministry of Finance of Ukraine will approve the procedure for confirming the possibility or impossibility of the taxpayer to perform its tax obligations during the martial law period and the list of supporting documents to be provided by the taxpayer.

- The possibility of submission of the tax reports and other documents to the tax authorities in paper form during martial law is abolished.

2. Renewal of VAT invoices registration and VAT refund
- Taxpayers registered for VAT purposes are obliged, if they have the possibility, to register VAT invoices and adjustments to VAT invoices in the Unified Register of VAT Invoices for the period February - May 2022 by July 15, 2022. The taxpayers shall also adjust (bring in conformity) the input VAT credit for February - May 2022, reported on the basis of primary (settlement) accounting documents, taking into account the data of VAT invoices and / or adjustments to VAT invoices registered in the Unified Register of VAT Invoices.

- Starting from June 2022, the VAT invoices and adjustments to the VAT invoices shall be registered in the Unified Register of VAT Invoices within the time periods set forth in the Tax Code.

- Starting from July 22, 2022, the legal effect of paragraphs 200.10 - 200.12 of Article 200 of the Tax Code, which regulate the procedure of verification and confirmation of VAT refund amount declared by taxpayers, will be reinstated.

- The desk audits of VAT declarations and adjusted VAT declarations shall be carried out within the following time periods:

  • for reporting periods February - May 2022 - audits shall begin after July 20 and shall be completed no later than September 20, 2022;
  • for reporting periods June - July 2022 - audits shall begin after August 20 and shall be completed no later than October 20, 2022.

- The unscheduled documentary audits in connection with reporting of negative VAT amounts or VAT refund requests of more than UAH 100,000 will be resumed. The audits which have not been completed before February 24, 2022, shall be completed by July 26, 2022. The audits that will be started after May 27, 2022, shall be completed within 60 calendar days after the deadline for desk audit of the relevant VAT declaration or adjustment to the VAT declaration.

- The taxpayers are not allowed to submit adjustments to the VAT declaration for reporting periods until February 2022, if the adjustment reduces taxpayer's VAT liabilities and / or contains a VAT refund request.

- The amounts of VAT paid upon purchase of goods which were subsequently destroyed (lost) due to force majeure event during the martial law period, shall not be taken into account for the purposes of VAT refund. Such amounts may, however, be included as input VAT credit and set off the VAT liabilities in the next reporting periods until it is fully utilized.

3. Resumption of tax audits

  - The following tax audits are resumed:

  • desk audits, without any exceptions or restrictions;
  • unscheduled documentary audits:

    1) at the taxpayer's request,
    2) in connection with taxpayer's reorganization or dissolution,
    3) in connection with filing of VAT declaration with a request for VAT refund or with a negative value of VAT obligations over UAH 100,000, and
    4) audits related to check of compliance with foreign exchange requirements (observance of time limits for receipt of payments for exported goods and delivery of goods in import transactions with advance payment).

- The unscheduled documentary audit is performed, if it can be carried out in safe conditions and provided that auditors have access to the taxpayer's place of business, accounting documents and it is possible to perform inventory of taxpayer's assets.

- The started tax audit can be suspended if circumstances preventing safe performance of the audit arise. The taxpayer will be notified about suspension of the audit through the taxpayer's electronic office.

4. Other changes
  - The liability (delay interest of 0.3% chargeable on daily basis) for the delay in the delivery of goods in import transactions with advance payment for goods was abolished for import transactions performed with the counterparties from Russian, as such transactions cannot be completed due to ban on imports of goods from Russia in accordance with the Cabinet of Ministers of Ukraine dated April 9, 2022 № 426.

- Until December 31, 2022, legal entities may import and perform first registration in Ukraine of vehicles classified under customs codes 8702, 8704 and 8705 of the Ukrainian customs classification, whether such vehicles are manufactured in Ukraine or imported into Ukraine, provided that the vehicles comply with at least Euro-3 standard and provided that such vehicles are imported by legal entities for their own use and are not alienated within 1095 days from the date of their first state registration in Ukraine.

Rödl & Partner
Kyiv

Mykoly Pymonenka Street 13
Building 1B, office 31
04050 Kyiv

Phone: +380 (44) 586 23 03
Fax: +380 (44) 586 23 04
E-Mail: kiew‎@‎roedl.com
Website: www.roedl.net/ua