On November 17, the Verkhovna Rada of Ukraine adopted Draft Law #3959-1 "On Amendments to the Administrative and Criminal Legislation regarding the Implementation of the Economic Security Bureau of Ukraine" (Draft Law) in the second reading. The American Chamber of Commerce in Ukraine (AmCham Ukraine) appealed to Members of Parliament to refine the Draft Law before the second reading and welcomes the exclusion of proposals to introduce a new provision in the Criminal Code of Ukraine, namely Art. 2222 regarding fraud with value-added tax.
Receiving a budget refund of value-added tax (VAT) is the right of the taxpayer. The proposed wording of Art. 2222 of the Criminal Code of Ukraine provided the establishment of the taxpayer's criminal liability for applying for budget compensation, even without receiving budget compensation.
Given that the receipt of VAT refund is preceded by a set of measures from the side of the controlling authorities (such as application of the electronic VAT administration system: monitoring of tax invoices, registration of tax invoices in the Unified Register of Tax Invoices, desk tax audits, unscheduled documentary audits), proposed wording of the Art. 2222 of the Criminal Code of Ukraine would become only an instrument of additional pressure on taxpayers.
We would like to thank all AmCham Ukraine members’ experts who took an active part in the advocacy process for their contribution and will continue improving tax.