The Government has approved a draft law meant to simplify the registration of tax bills for companies

Today, the Government has approved amendments to article 201 of the Tax Code of Ukraine on the registration of tax bills / corrective calculations in the Unified Register of Tax Bills.

Since July, a risk monitoring system for VAT payers has been in operation in Ukraine which prevents VAT manipulations and billion-high losses for the state budget. It also withdraws unfounded tax credits from non-diligent tax payers.

In September 2017, cases were analyzed when the registration of tax bills / corrective calculations in the Unified Register of Tax Bills was suspended. The analysis made it clear that in the initial phase after its roll-out the risk monitoring system stopped 1.3% of the total number of registered tax bills / corrective calculations, in the end of July that rate went down to 0.52% further decreasing almost five-fold in October 2017 (0.29%).

Thus, the monitoring system for tax bills / corrective calculations has been gradually decreasing the number of stopped tax bills / corrective calculations, which stands for a positive dynamics in the system operation. Hence, the number of stopped tax bills submitted by companies from the real sector of the economy has been steadily going down.

The Ministry of Finance has developed a solution making it significantly easier to register tax bills of diligent tax payers which were stopped.

What’s it about?

According to the Tax Code of Ukraine, tax bills / corrective calculations are registered or denied registration in the Unified Register of Tax Bills according to the decision of the supervising body (SFS commission). The decision on the respective tax bill / corrective calculation is sent to the applicant within 5 working days after the receipt of her/his explanations and documents.

The Ministry of Finance proposes a solution allowing to register a suspended tax bill automatically, if the SFS commission fails to provide a reply to the tax payer within 5 working days. It means that tax payers won’t be affected by the authorities which fail to reply on time, and their tax bills will be automatically registered.

What’s the benefit?

It is proposed to set a clear term (5 days) for the SFS to block or to register a suspended tax bill. Should this term be violated, the respective tax bill shall be registered automatically. It shall motivate the SFS commission to make faster decisions, since tax payers shall not be exposed to delays in the work of the authorities.

To make the SFS commission as effective as possible, additional specialists shall be engaged into its operation to examine suspended tax bills in a fast way.

The Ministry of Finance insisted on the adoption of this crucial regulation as a part of the Law No. 1797 (which launches the system for the automatic suspension of risky tax bills) during its preparation in December 2016, but this regulation was removed from the final version of the Law during the debates in the Parliament.

Now, having analyzed the operation of the system, the Ministry of Finance proposes to adopt these amendments to make the procedures easier for business.

Now it’s up to the Parliament which will receive the draft law for a vote. We expect a fruitful cooperation with the Parliament.