Ukraine’s State Tax Service and the IMF are preparing the next stage of tax control

On 1 September, Ukraine’s State Tax Service held a working meeting with a representative of the IMF mission to discuss the further reform of tax administration in Ukraine.

Businesses should pay attention not only to the fact of the meeting, but primarily to the matters discussed.

These included:

• improving the operation of the VAT invoice monitoring system;
• improving the quality and efficiency of tax audits;
• procedures for challenging decisions of the State Tax Service;
• further implementation of the tax risk-management system.

In practice, the transition is continuing toward a model in which the tax authority seeks to identify high-risk taxpayers and high-risk transactions before conducting a traditional tax audit.

The State Tax Service is already implementing a compliance risk-management system that provides for the early identification of tax risks, analysis of their causes, and determination of the appropriate response by the tax authority.

For businesses, this means that the overall tax profile of the company — rather than a single tax return or transaction — will become increasingly important.

The State Tax Service may analyse the full set of information about a taxpayer’s activities, including VAT, tax burden, counterparties, the nature of transactions, financial and tax reporting, and other data available to it.

Therefore, waiting for a tax audit is no longer the best strategy.

Businesses should assess their tax risks in advance and understand how their activities may appear to the analytical systems of the State Tax Service.

This is particularly important if a company already faces VAT invoice registration blocks, designation as a high-risk taxpayer, information requests from the State Tax Service, or significant discrepancies in reporting.

Tax control is gradually becoming preventive and data-driven.

Accordingly, legal protection of a business should also begin before an audit, rather than after receiving a tax assessment notice.

You can seek legal advice now, so that you do not later need legal defence services.

Would you like a consultation?

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📧 Email: info@uk-winner.com

Author: Maksym Bahniuk, Head of Tax and Customs Law Practice at WINNER Law Firm.