The Cabinet of Ministers introduces new rules for interaction between the State Tax Service and taxpayers

The approach to managing tax authorities continues to change. International rules of interaction between the tax authority and the taxpayer are being introduced - only when tax risks (compliance risks) are identified.

To implement the National Revenue Strategy until 2030, the Cabinet of Ministers of Ukraine adopted a resolution on the implementation of a pilot project on the functioning of the tax risk management system (compliance risks) in the State Tax Service.

What does it mean? And how will it affect the taxpayer?

First, the centralization of the tax risk management process has been introduced through changes in the organizational structure of the State Tax Service and in the approach itself - tax risks are identified for a particular taxpayer and the tax authority, including territorial ones, determines what should be done only at the level of the central office.

In other words, as a result of the implementation of this reform in 2024-2030, we will come to the point where the decision on whom to inspect will be made centrally, taking into account the risks in accordance with a certain methodology in accordance with international standards. This mechanism will eliminate the possibility of pressure on business, when today a territorial authority can come to anyone.

Under this approach, an audit will be conducted only when a high degree of risk is identified and the taxpayer is proven to the territorial authority to be a high risk for the audit.

Secondly, the Law introduces systematization of control over the territorial authorities regarding the quality of implementation of certain measures to eliminate tax risks by the territorial authorities.

Thirdly, a clear cycle of measures is defined with certain rules for each step in the implementation, which gives the prospect that the risk-oriented approach that has been discussed for about the last 15 years will be introduced and the best international practices in Australia, Canada, and the UK will be introduced in Ukraine.

Pursuant to the CMU resolution, the Ministry of Finance and the State Tax Service have to implement a number of methodological and organizational measures to enter 2025 with a new tax service management system, so there is still a lot of work to be done!