The Cabinet of Ministers has expanded the list of permitted tax audits

On 3 February 2021, the Cabinet of Ministers of Ukraine issued Decree No 89 "On reducing the term of restrictions relating to the moratorium on certain types of audits".

By this decree, Government effectively amended the provisions of clause 52 Subsection 10 Section XX, Transitional Provisions, of the Tax Code of Ukraine (the "TC of Ukraine") and permitted the following types of audits of legal entities:

1. The audits already in progress and not completed before 18 March 2020
2. Scheduled audits
3. Unscheduled audits:

• when tax credit arises from high-risk transactions related to purchase of goods/services (information on tax non-compliance has been received or misstatements have been identified in the tax return)
• if information and data supported by documented evidence has been received that indicates that a controlled transaction is not on an arm’s length basis, and/or non-compliance of a controlled transaction with the arm’s length principle has been established during the monitoring of terms and conditions of controlled transactions
• if a report on controlled transactions and/or transfer pricing documentation has not been filed or has been filed not in accordance with the TC of Ukraine, or if non-compliance has been established in monitoring such report or documentation
• when a report on controlled transactions has been obtained
• if tax information has been obtained that indicates non-compliance with currency legislation by failing to meet the deadlines for delivery of goods in import transactions and/or foreign currency revenue in export transactions
• if officials of the authority conducting the audit have been subject to disciplinary action or prosecution, and the conclusions in the audit report prepared by these officials have been found not in compliance with law or the matters that should have been clarified during the audit have been found to require additional clarification.

PwC Tax Litigation team will support you in analysing the legality of the audits (both scheduled and unscheduled) and facilitating safe denial of access to such audits if found illegal.