Specially for Ekonomichna Pravda
The war not only changed the lives of all of us but also amended the most stable systems securing the livelihood in Ukraine. Taxation became one of them. Thus, after the beginning of the full-scale invasion, the legislators amended the Tax Code of Ukraine according to subcl. 69.1, cl. 69, subsection 10, section 10 “Transitional Provisions.” It implies that the taxpayers who cannot pay the taxes and provide the relevant reports on time shall be released from this liability provided that they fulfill it within a period of six months after the suspension or cancelation of martial law. The only difficulty in applying that norm was the absence of the procedure of submitting the relevant documents to the tax bodies, their list, and the grounds which are to confirm that there is no opportunity to report and pay the taxes.
Despite the fact that the relevant Order No. 225 of the Ministry of Finances was adopted on July 29, 2022, the majority of taxpayers actually do not know about it, hence, can miss the deadline for submission of the relevant documents, which is on 9/30/2022.
So, let us find out about the grounds for the payer to be released from the liability of paying the taxes and submitting the reports and the procedure for the tax body to approve this fact.
Let us start from the grounds entitling not to fulfill one’s tax liabilities:
• loss of primary documents and computer equipment (obviously, if the primary documents were stored in digital form) due to the war;
• inability to use the documents and equipment due to the war;
• taking these documents and equipment away entails a life threat or due to the set prohibitions and limitations;
• the impact of disclosure of information on the places of storage of fuel, ethanol, and their further elimination;
• absence of the authorized official and inability to assign the replacement;
• the legal or physical address of the company is in the settlement on the occupied territory, in the area of hostilities, or surrounded. Please be reminded that this list is regularly updated by the Ministry of Reintegration of the Temporarily Occupied Territories of Ukraine; and
• other circumstances beyond control (force majeure) with documentary confirmation. In this situation, it would help to provide photos, certificates by the State Emergency Service or the police, certificate by the Chamber of Commerce and Industry, and any other official documents confirming this fact.
In addition, the Order also implies a range of other grounds for individual taxpayers, such as in-patient treatment, serving in the law enforcement bodies or the Ukrainian Armed Forces, etc.
How does one approve the release from liabilities?
For this purpose, by 9/30/2022, one shall submit to the tax body an application on inability to fulfill this liability (except for the liability on registration of excise bills and/or submission of electronic documents with data on the actual fuel reserve and fuel or ethanol turnover volumes, and/or submission of an application for transfer of fuel or ethanol by the vehicles which are not excise moveable warehouses, etc.) together with a comprehensive list of documents (copies of documents) and information confirming this inability.
The mentioned application is made out in free form but it shall contain certain details, such as the company name and address, list of liabilities which cannot be fulfilled, and some other data indicated in the Order. Here, one should consider that the tax liabilities of a company which is a tax agent also belong to the list. Please keep in mind that even if the company does not pay salary or rent for the land leased from an individual, the company shall accrue the relevant income for such a person and pay the relevant taxes to the budget.
If a payer cannot submit such an application due to the reasons above, the deadline for its submission shall be postponed to the date when the payer can fulfill the tax liabilities, but in any case not later than 60 calendar days from the first day of the month following the month when the taxpayer’s possibility to fulfill the liability recovers.
The application and copies of documents can be submitted both via the Back Office and in written form in person or via the post.
Special attention should be paid to the documents which can confirm the inability to fulfill the tax liability.
According to the provisions of the Tax Code of Ukraine, this list shall be defined by the Ministry of Finances, yet the indicated Order does not contain this list. Meanwhile, it is provided that a payer shall submit any documents confirming the facts given by them.
In this regard, please consider the fact that the official documents constitute the greatest evidence. These may be the certificates issued by the State Emergency Service, police, medical establishments, military administrations, etc. Of course, if the documents or office equipment is lost, no body can confirm it: it can only evidence the hit of the shell, fire, or flood. So, to specify this list of documents, for example, the company shall compile the relevant act on the damages incurred. If there are no more employees or officials in the company, it shall also justify the fact that the act is signed by one person only. It means that your personal documents can specify the documents issued by the state bodies, but if the latter are absent, the former are unlikely to be valid. In addition, if the ground constitutes the prohibition of visiting certain territories or if the company is located at the temporarily occupied territories, I would recommend to refer to the relevant officiant document issued by the state body in your application. You should not expect for the tax body officials to search for these on their own, especially regarding the local normative acts, such as orders of military administrations.
One should also keep in mind that the application shall be accompanied by the copies of these documents, while the originals shall be stored and provided upon the request of the tax body.
After submitting the application, the tax body shall within 20 days consider the application and can make a prior decision to request additional documents from the applicant. In this case, the payer shall provide them within 10 days, and the tax body shall make the final decision within 20 days. This decision, either supporting or refusing, shall be sent to the payer, and the latter can appeal against it in court.
Hence, the payers who are eligible for this application but have not submitted it yet face a material volume of work by September 30 to collect the evidence confirming that they truly cannot pay the taxes and submit the reports, hence, they shall not be held liable.