Return of Tax Audits: President Zelenskyy Approved the Relevant Law

On December 6, President Volodymyr Zelenskyy signed a law that was adopted a month ago and provides for the lifting of the moratorium on tax audits of Ukrainian businesses. 

The law came into force 24 hours after its publication, despite the fact that the Ukrainian parliament held a vote to resume inspections on December 1.

In June, The Verkhovna Rada partially lifted the moratorium on tax audits, removing the single tax of 2%, but this turned out to be insufficient. Later in September, the Cabinet of Ministers approved a bill to lift the moratorium in full, but after consultation with the IMF, it was decided to leave it partially in force, but with an expansion of its scope.

Documented scheduled inspections for 2023 and 2024 may include:

  • manufacturers and sellers of excisable products;
  • gambling business;
  • companies providing financial and payment services;
  • non-residents working through separate divisions.

Other taxpayers may be audited if they meet at least one of the following criteria:

  • the level of income tax payment was less than 50% across the industry;
  • VAT payment level is less than 50% across the industry;
  • salary payment is less than the industry average;
  • accounts receivable are twice as large as accounts payable;
  • annual income is more than 10 million UAH, and the total amount of expenses is more than 75% of the annual income.

In October, the Verkhovna Rada adopted a second bill, which is necessary to comply with the IMF requirements. This bill concerns the introduction of lifelong financial monitoring of the state officials.

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