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Will pressure on business decrease due to changes to risk assessment criteria?

It is well-known that from July 1, 2017, taxpayers have faced significant problems related to suspension of the registration of tax invoices.

Before launching the system of “blocking” of tax invoices, the Ministry of Finance of Ukraine stated that the problem of suspension of the registration of tax invoices for manufacturers, service providers, and agricultural producers would be solved by submitting data in the established form of the so-called “technological table”.

However, in practice everything turned out to be completely different, and therefore these categories of enterprises are forced to file notice constantly, explanations and a “technological table” for each suspended tax invoice. That is, the promises of the Ministry of Finance of Ukraine were not kept, which caused quite justified discontent among small and medium businesses.

The Ministry of Finance is trying to rectify the situation by amending paragraph 3 of the “Criteria for assessing the risk degree sufficient to suspend the registration of the tax invoice/adjustment calculation in the Unified Register of Tax Invoices” approved by Order No.567 of 13.06.2017 (hereinafter – the Criteria).

The amendments to the above-mentioned Order were made on the basis of the Order of the Ministry of Finance of Ukraine No.776 dated 18.09.2017, registered in the Ministry of Justice of Ukraine on 29.09.2017 under No.1204/31072.

The experts of Finance Business Service have considered what changes have been made, how and whom they will affect.

Thus, Clause 3 of the Criteria has the following content now: “A taxpayer has the right to file information in the SFS in the prescribed form…”.

That is, unlike the previous version, taxpayer has the right to provide a “technological card” at any time, and not only in case of suspension of the registration of the tax invoice. Thus, the Ministry of Finance of Ukraine consolidated its promises that were made before launching the system of “blocking” of tax invoices.

In addition, the changes stipulate that the data table is submitted with the explanations, which specify:

  • specificity of economic activity, which has an unchanging character;
  • a reference to the tax and other reports of the taxpayer (if desired).

At the same time, the SFS is obliged to consider the information and explanations within 5 working days following the day of its receipt. Unfortunately, the changes do not specify what effects occur for the taxpayer if the SFS does not provide an answer about whether the “technological table” is taken into account with the explanations. But this issue is extremely topical, because, as practice shows, the SFS often misses the deadlines for providing answers and the time limits for sending decisions to the taxpayer.

It should be noted that any action generates a legal fact. That is, the provision of information by the taxpayer in the prescribed form should generate a fact – or taking such information into account (and tax invoices are not blocked subsequently), or refusal to record such information (if there are grounds). In this case, the inaction of the tax authority in this case should also produce a certain legal fact: the lack of reaction to the taxpayer’s appeal should be regarded as a tacit consent with his position. In other words, the absence of objections to the recording of information indicates that it is taken into account.

However, as practice shows, the impunity of the SFS, when missing deadlines, puts the taxpayer in legal uncertainty, because the presence of the consequences of such inactivity by the SFS has not been regulated by law. Unfortunately, in this case, there is no effective mechanism of judicial protection that the GFS uses in fact.

It is quite positive that the “technological table” is automatically taken into account by the system if the information is submitted by taxpayers-agricultural producers. In fact, agricultural producers are being removed from monitoring (how far this is true for other categories of taxpayers – it is a big question).

However, even here everything is not as smooth as we would like it to be: the above refers to agricultural producers that meet a number of criteria, namely:

  • included in the Register of recipients of the budget subsidies in accordance with the Law of Ukraine “On State support of agriculture of Ukraine”;
  • as of December 31, 2016, they applied a special taxation regime in accordance with Article 209 of the Tax Code of Ukraine (as amended on December 31, 2016) and as of January 1, 2017 they had their own or rented land plot with a total area of ​​more than 200 ha inclusive, declared before February 20, 2017, and in which there was no simultaneous change of the founder and the head for the period from January 1, 2017, and in which “technological table” the codes are indicated, according to the UCG FEA, the supply (manufacture) of such groups of the goods: 01, 03, 04, 07, 08, 10, 12.

Thus, not all agricultural producers can be glad, because only those that meet the specified criteria can automatically avoid monitoring.

As we can see, the proposed changes are partly positive, but there are still many questions and unsettled moments. In particular, it is still not clear how these changes will start to work and if there will be any new problems with the already taken into account data of the tables.

Taxation and administration of taxes in Ukraine are among the most unstable systems, as they are subject to numerous changes in fairly short periods of time. Therefore, the specialists of Finance Business Service as an effective and well-organized team monitor the changes in taxation and administration of taxes, as well as they continue to give effective recommendations and solve complex problems of their clients.