Published 2 February 2017. Some rules have changed since; ask us for the current position.
The new year brought plenty of new laws that have come into force and affect individuals, and not only them.
Today we look at important changes to how tax audits of businesses are carried out. The key provision is in point 6.
1. The audit schedule is now public
The official website of the State Fiscal Service (SFS, Державна фіскальна служба) will now publish information that used to be kept out of sight. This should ease the pressure on businesses and give them time to prepare for an audit.
It brings to mind the old advert: "Ready for your audit? Then we're on our way."
2. An extra day to object to an audit report
Previously, a taxpayer had 5 working days from the day the audit report was received to file an objection. Now the period runs from the day after the report is received.
Accordingly, the period for reviewing objections has been extended from 5 to 7 working days, and the notice of the time and place of the review is now given up to 4 days in advance.
3. Unscheduled documentary audits
Grounds for such an audit will include a failure to provide information for a cross-check: the tax authority requested it and the taxpayer did not provide it within 10 working days. Expect an audit covering exactly the issues listed in the request.
4. Explain why you refuse an audit
The official draws up a report confirming that the audit was refused. The taxpayer, in turn, may submit a written explanation in response to that report.
5. New deadlines for desk audits
A desk audit of a tax return or an amended return is carried out within 30 calendar days following the last day of the filing deadline or, if the documents are filed later, the day they were actually filed.
For other matters, the 1,095-day limitation period under Article 102 of the Tax Code of Ukraine applies.
6. Oversight of the tax authority
Who is authorised to initiate audits?
Answer: tax authorities at regional and central level.
They are the ones who can issue audit orders, prepare audit assignments, draw up reports (certificates) and, worst of all, send taxpayers tax assessment notices and demands (decisions) to pay the unified social contribution (USC, ЄСВ).
More than 140,000 dormant sole proprietors (FOP) chose to close their businesses to stop paying the USC. You can order this service from our partners, RegServ, by phone on (067) 577-73-22 or via their website.
Back to the changes.
Scheduled and unscheduled documentary audits may involve staff of the SFS office where the taxpayer is registered. That makes sense.
According to the authors of the law, these 6 important changes will significantly raise the competence and professionalism of the officials who carry out tax audits, as well as the quality of businesses' preparation for audits.
One more change: staff of state tax inspectorates will provide consultations to taxpayers.
Thank you for reading.
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