The Ministry of Finance and the SFS will improve the system of VAT risk management – complex solutions have been prepared which are now discussed in public

On February 13, Minister of Finance Oleksandr Danyliuk hosted an open discussion of the draft decree on the further operation of the system of VAT risk management together with representatives of small, mid-sized and big business as well as with experts. The meeting was also attended by State Secretary of the Ministry of Finance Y. Kapinus, advisor to the Minister of Finance Y. Bugrimova and representatives of the SFS.

The Ministry of Finance and the SFS jointly prepared and agreed a decision on the further operation of the VAT risk management system which was published for an open discussion on February 9, 2018.

“We proposed our solutions for an open discussion and are ready to cooperate with all interested parties to agree a position on the principles of operation of the VAT risk management system which shall be suitable for the interests of small, mid-sized and big business and will prevent the stealing of the state budget funds”, Minister of Finance O. Danyliuk said during the meeting.

The participants of the meeting expressed their proposals which will be taken into account in the draft decree.

The Ministry of Finance plans to continue the discussion of the draft decree and proposals to it with all interested parties. Afterwards, it will be submitted to the Cabinet of Ministers.

Additional information about the draft decree

The draft decree proposes the following amendments:

• To reduce the number of cases, when the registration of tax bills is suspended, the “cut-off” criterion is set: 3% and the monthly turnover equal to UAH 500,000;
• It used to take some time to agree the risk assessment criteria, which enabled some taxpayers to enjoy a fake tax credit. To ensure a prompt reaction, it is proposed that the criteria for risk assessment are set by the SFS. To make this process transparent, the SFS will have to agree the criteria with the Ministry of Finance in advance and publish them on its official website.
• Positive tax history indicators shall be implemented for small and mid-sized business. Tax bills with risky transactions won’t be suspended if submitted by taxpayers with a positive tax history.
• An electronic register for suspended tax bills shall be established where taxpayers will be able to trace their status online. This will make the processing of tax bills more transparent.
• To make the processing of explanations and documents faster, commissions shall be established at the regional and central level. Their decisions shall enter into force once registered in the electronic register of suspended tax bills.
• If the decision of a commission is not registered within 7 working days, the suspended tax bill / corrective calculation shall be registered automatically.
• The rejection form shall be amended. It shall contain a clearly explained reason for the rejection of a tax bill. If the required documents were not submitted or contradict the law regulations, the rejection form shall name the concrete document(s).
• A solution is proposed for the registration of tax bills / corrective calculations submitted by taxpayers whose tax bills / corrective calculations were suspended before December 1, 2017, and for which no explanations and documents were submitted.