Zelensky asks government to fine-tune taxation rules in Ukraine

Ukrainian President Volodymyr Zelensky has sent to the Cabinet of Ministers, Ukraine's government, a number of proposals regarding Law No. 466-IX that amends the Tax Code of Ukraine by improving tax administration and removing technical and logical inconsistencies in tax legislation.

It is about introducing clear and transparent rules of taxation for foreign companies that pay taxes in Ukraine, according to the presidential press service.

In a letter addressed to Prime Minister Denys Shmyhal, the president proposed that respective legislative initiatives be developed jointly with representatives of business associations and experts, and submitted to the Verkhovna Rada, Ukraine's parliament, to introduce transparent and detailed mechanisms for implementing the provisions on restrictions introduced to prevent tax dodging.

He also asks to give taxpayers enough time to collect data and information necessary for the declaration of taxable assets amid the COVID-19 pandemic.

According to the president, the amount of fines for certain minor tax offenses should also be reduced.

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In addition, the government should ensure the protection of data and information received by the local tax authorities in reports on Ukrainian residents' income, including earnings abroad, and in statements issued by the respective authorities of foreign states in accordance with the law.

What is more, the issue of criminalizing the illicit disclosure of such data and information should be considered.

Zelensky also asked the Cabinet to develop a capital amnesty bill and submit it to parliament. These legislative changes should be prepared within three months in cooperation with experts, businesses and the Verkhovna Rada's Committee on Finance, Taxation and Customs Policy.

With the involvement of business representatives, experts, and lawmakers, the government should also prepare proposals for consistent improvements and simplification of the administration of taxes and fees, ensuring the clarity of the taxation rules and streamlining terminology. The relevant bill should be submitted to the Verkhovna Rada by late 2020.

The press service recalled that the Verkhovna Rada on January 16 passed bill No. 1210 to amend the Tax Code of Ukraine to improve tax administration and remove technical and logical inconsistencies in tax legislation.

The bill proposes changes aimed at bettering and simplifying the tax administration system and brining it in line with international standards.

The bill is designed to introduce international tax control standards for all participants in international trade and implement the provisions of the Action Plan on Base Erosion and Profit Shifting (BEPS Action Plan).

In addition, the amendments stipulated by the document provide the necessary conditions for reforming the State Fiscal Service and open up the possibility of transforming its structure in accordance with the concept of a single legal entity.

The document also improves the tax administration system and expands the capabilities of online services for taxpayers. From now on, a taxpayer who submits reports online or has been registered in the electronic office can apply for documents from the tax authorities in electronic form.