20 January 2015
On 16 January 2015 the On Amending the Tax Code of Ukraine in Respect of the Procedure for Adjustment of Corporate Income Tax and VAT Liabilities by Way of Tax Compromise Act of Ukraine (the “Act”) was published and came into force on the next day.
The Act allows the taxpayers to report previously understated CIT and VAT liabilities and to pay only 5% of such liabilities. The remaining 95% of understated CIT and VAT liabilities are deemed to be settled and the taxpayers are relieved from relevant fines and penalties.
The tax compromise applies to transactions effected before 1 April 2014. The taxpayers have 90 calendar days following the enactment of the Act to reach a tax compromise.
Importantly, the Act also applies to tax assessments currently challenged by the taxpayers in the administrative procedure or in courts of law. If such a tax dispute exists, the tax compromise procedure is simplified.
The tax compromise procedure allows taxpayers to significantly reduce the amount of taxes which could become payable in connection with the existing or potential tax disputes. In addition, the tax compromise could allow the officials of the taxpayers to be relieved from criminal liability for tax evasion.
If your company is currently in a tax dispute or you believe that the tax risks relating to transactions effected prior to 1 April 2014 are material, KPMG specialists would be pleased to discuss the expedience and particularities of tax compromise in such situations, as well as to assist you in reaching a tax compromise.
Should you have any questions or need any additional information in respect of the issues discussed in this Newsletter, please do not hesitate to contact Oleg Chayka or Andriy Reun at +38044 490 5507 or by email.
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should rely on such information without appropriate professional advice after a thorough examination of the particular situation.