Criminal liability for tax evasion (Article 212 of the Criminal Code of Ukraine) – marginal amounts for 2014 underpaid which may give rise to criminal liability

22 January, 2014 Newsletters

Due to the adoption of the Law of Ukraine “On State Budget of Ukraine for 2014” and the establishment of minimum poverty line for the employable person for 2014, qualification of responsibility under Article 212 of the Criminal Code of Ukraine for 2014 shall be carried out in the following way:

en 2014 Spivak

We draw your attention that calculations provided above were made as follows:

First of all, into account were taken the quantitative restrictions envisaged by Article 212 of the Criminal Code of Ukraine (hereinafter –“the CCU”), according to which tax evasion may result in criminal responsibility:

  • part 1 of Article 212 of the CCU envisages criminal responsibility for the intended tax evasion if the respective actions resulted in the actual non-receipt of funds to the budget or to the state trust funds in a considerable amount (under the considerable amount one shall understand the amount of taxes, charges and other obligatory payments which exceed the prescribed by the legislation tax-free minimum incomes in thousand or more times);
  • part 2 of Article 212 of the CCU envisages criminal responsibility for the same actions, carried out by the previous concert of the group of people, or if they resulted in the actual non-receipt of funds to the budget or to the state trust funds in large amounts (under the large amount one shall understand the amount of taxes, charges and other obligatory payments which exceed the prescribed by the legislation tax-free minimum incomes in three thousand or more times);
  • part 3 of Article 212 of the CCU envisages responsibility for the actions envisaged by part 1 and 2 of this Article, carried out by a person, who was previously sentenced for the tax evasion or if they resulted in the actual non-receipt of funds to the budget or to the state trust funds inparticularly large amounts (under the particularly large amount one shall understand the amount of taxes, charges and other obligatory payments which exceed the prescribed by the legislation tax-free minimum incomes in five thousand or more times).

The notion of the tax-free minimum incomes is disclosed in the Tax Code of Ukraine. Thus, according to systematic interpretation of para. 5 of subsection 1 of Section XX, para. 1 of Section XIX, subpara. 169.1.1 of para. 169.1 of Article 169 of the Tax Code, the tax-free minimum incomes (for qualification of crime purposes) till December 31, 2014, will be equal to 50% of the poverty line for the employable person (per month), which is prescribed by the Law as of January 1 of the relevant tax year.

Let us remind that in order to qualify the offence only taxes, duties and other mandatory payments which constitute the part of the tax system and were introduced by law shall be considered (as stipulates part 1 of Art. 212 of the Code). Tax, duty, other mandatory payment is defined is the mandatory remittance into budget of certain level or state purpose fund which is done by a taxpayer in the order and under conditions stipulated by tax laws of Ukraine. Hence, some tax obligations indicated in tax notification, issued on the basis of tax audit, shall not be considered to qualify the offence, i.e. only the sum of taxes (duties) shall be considered without penalties.

The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.

Kind regards,

© TOV "KM Partners", 2014

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