How the Moratorium on Tax Inspections Works During Wartime: Who It Applies to and What to Prepare For

In recent years, the topic of the moratorium on tax audits has remained one of the most discussed among entrepreneurs, accountants, and public officials. This instrument gained particular resonance after the introduction of martial law in Ukraine in 2022 and the prolonged turbulence in the economic environment. The National Tax Service (STS) has repeatedly explained how exactly the moratorium works, to whom it applies, and which audits may be carried out even during its operation. This material provides a thorough analysis of the existing rules, practices, and business expectations regarding the transformation of approaches to tax control.

Prerequisites and Purpose of the Moratorium

The moratorium on tax audits was introduced as part of a package of state support measures to stabilize the economy in the extreme conditions of war and the coronavirus crisis. The main idea was to minimize administrative pressure on entrepreneurs, allow businesses to operate in an environment of uncertainty, and enable the state to maintain potential tax revenues without total control.

This decision was based on the following tasks:

• Support for business: Protect entrepreneurs from additional costs and preserve jobs.
• Saving state resources: Redirect human and financial resources to urgent needs — defense, healthcare, and the social sphere.
• Preventing abuse: Eliminate opportunities for corruption pressure in difficult economic conditions.

Legal Framework: Who and What Is Subject to the Moratorium?

According to the STS, the grounds and procedure for introducing the moratorium are determined by special laws, principally paragraph 69.2 of subsection 10 of section XX of the Tax Code of Ukraine. According to these provisions, for the period of martial law and three months after its completion, most types of documentary audits are prohibited, in particular:

• scheduled documentary audits,
• unscheduled documentary audits (except for certain exceptions),
• factual audits regarding certain taxes and licenses.

At the same time, the STS emphasizes: the moratorium is not absolute, and exceptions exist, which may relate to issues of VAT refunds, audits at the request of taxpayers or pretrial investigation bodies, controlled transactions, foreign exchange controls, and others.

Practice of Applying the Moratorium: What Is Allowed and What Is Prohibited

The Ministry of Finance and the STS have repeatedly explained how the moratorium is implemented in practice. It is not only about formal restrictions but also about specific nuances for different groups of taxpayers.

• Types of audits that are prohibited:
  • Scheduled documentary audits: The state is not allowed to conduct regular audits of the financial and business activities of enterprises according to annual or semi-annual schedules.
  • Most unscheduled: These refer to unscheduled documentary audits initiated based on risk analysis or on dubious grounds.
• Exceptions:
  • At the taxpayer’s request: If a company itself requests an audit (for example, to confirm a negative VAT value).
  • Entities involved in “risky” operations: If there are suspicions of fictitiousness or other criminal offenses, an audit may be initiated at the request of law enforcement.
  • Controlled export-import: Audits of foreign trade operations for compliance with foreign exchange legislation remain possible.
• Factual Audits

The STS separately emphasizes that factual audits (i.e., unexpected visits to enterprises, stores, etc.) during the moratorium are possible only if there are clear grounds:

• • violation of the rules for conducting activities,
  • manipulation of excisable goods,
  • trade without licenses,
  • illegal sale of excisable products.

The Effect of the Moratorium for Business

The moratorium has allowed many enterprises to focus on real work without fear of another tax inspection. According to business associations and entrepreneurs themselves, this has significantly reduced psychological and financial pressure in the most critical months after the start of the full-scale invasion.

However, there are other consequences:

• Loss of control over shadow operations: Some companies used the moratorium for unofficial tax optimization schemes.
• Deferred audits: The tax authority sometimes records violations but cannot check them immediately; audits are postponed, creating risks for business in the future.
• Increased mutual distrust: The lack of official audits provokes distrust among counterparties toward the financial statements of certain partners, especially in large transactions.

Position of the STS: Explanations and “Hotlines”

The STS actively informs taxpayers, regularly publishing explanations, answers to frequently asked questions, and organizing webinars and “hotlines.” The main message: the moratorium is not complete freedom from control; each case should be considered individually, taking into account the specifics of the business and the current legislation.

STS experts advise:

• submit reports on time even in the absence of audits;
• keep all accounting and tax documentation to avoid problems after the end of the moratorium;
• consult with tax law specialists on questionable issues.

Exit from the Moratorium: What Awaits Business?

After the end of martial law, the moratorium will not be lifted immediately, but only after 3 months. During this time, businesses are advised to:

• prepare for a possible wave of audits,
• conduct an internal audit,
• ensure maximum transparency of accounting data.

It is expected that the STS will begin scheduled audits using a risk-based approach, focusing on areas with the highest risks of abuse.

Conclusion

The moratorium on tax audits has become one of the most important anti-crisis regulatory instruments during wartime. Its main effect is a reduction in administrative burden and support for business. However, for the effective development of a tax culture and prevention of further abuse, it is important to recognize that the moratorium is a temporary compromise, not a new norm for sustainable development. Responsibility, transparency, and honesty in relations with the state must remain a priority even under the most serious challenges.

Author: Maksym Bahniuk, Head of Tax and Customs Law Practice, Law Association “Legal Company WINNER“.