Briefly about the amendments to the TCU provided by Law № 466-IX (Bill № 1210)

Law №466-ХІ was signed by the President of Ukraine on 22.05.2020 and entered into force on 23.05.2020.

The main purpose of the law was to improve the administration of taxes, eliminate technical and logical inconsistencies in tax legislation, but what we have:

• The concept of taxation of profits of controlled foreign companies has been introduced (any legal entity registered in a foreign state that is under the control of a natural person resident in Ukraine in accordance with the TCU). • Establishment of the Board of Appeals for consideration of taxpayers’ complaints against the decisions of the central executive body that implements the state tax policy.
• Improving the system of electronic administration of the sale of fuel and ethyl alcohol, simplified licensing conditions for businesses. The terms and procedure for applying penalties for violation of the rules of accounting, production and circulation of fuel or ethyl alcohol in excise warehouses have been revised.
• Penalty reform, not as a penalty that, when applied concurrently with a fine, resulted in double financial liability for a single offense, but as a means of discounting money over time.
• New Transfer Pricing reporting has been introduced.
• The definition of a permanent establishment has been expanded, and a procedure has been added whereby taxpayers can self-register a non-resident who conducts activities that have the characteristics of a permanent establishment but evades the obligation to register it. • The amount of the fine for non-submission / submission in violation of the established deadlines / submission not in full, with inaccurate information or with errors of tax reporting has been increased, which entails a fine of UAH 2,040, and again UAH 4,080.
• Responsibility reformed – guilt added to offense. In this case, guilt is available only in cases expressly provided by the TCU.
• In addition to taxpayers, the subjects of the tax offense include regulatory authorities and / or their officials who are liable in the form of compensation for damage to the person in respect of whom the tax offense was committed.
• The institution of compensation for damage caused by illegal decisions, actions or omissions of regulatory authorities, their officials (officials) is introduced.
• A list of circumstances has been written, and mitigating circumstances have been introduced that exempt / partially exempt taxpayers from financial liability, and circumstances that mitigate a person’s liability for committing offenses have been identified:
  • committing an act under the influence of threat, coercion or due to material, official or other dependence;
  • committing an act by coincidence of difficult personal or family circumstances; independent notification by the taxpayer of the offense committed by him.