Difficulties or opportunities: an exemption from fines and penalties in case of payment of calculated tax liability amount within 30 calendar days after receipt of the tax notification-decision under subpara. 69.37 para. 69 of Sub-section 10 Section XX “Transitional Provisions” of the Tax Code of Ukraine
In accordance with the amendments to the Tax Code of Ukraine, starting from August 1, 2023, and until the termination or cancellation of martial law in Ukraine the legislator provides taxpayers with the opportunity to be exempt from financial liability (fines and penalties).
In case of payment by the taxpayer within 30 calendar days from the day following the date of receipt of tax notification-decision amount of tax liability calculated based on the documentary audit results, fines (financial sanctions) calculated on the amount of such tax liability are considered canceled and the penalty is not charged.
However, this option causes certain difficulties due to some pitfalls in the legislation.
In practice, the tax authority usually issues only one tax notification-decision for all additional charges for violations of the same tax.
Hence, if you agree to pay the amount of tax liability within 30 calendar days, it means you will admit all violations even those you may disagree with, and after such payment, these violations cannot be appealed to the court.
If you disagree with some violations that are bulked in one tax notification-decision and do not pay tax liability within 30 calendar days, you will lose the opportunity to be exempt from penalties and fines.
However, there is some non-compliance with the law on the tax authorities’ part in this aspect which also provides additional opportunities for the taxpayer to appeal against such tax notification-decision.
At the same time, it cannot be ruled out that the recognition and payment of accrued tax liabilities (and related violations) within 30 calendar days will be the basis for initiating criminal proceedings on the fact of tax evasion since all the conditions for exemption from criminal liability under Part 4 of Article 212 of the Criminal Code of Ukraine are not met in such a case.
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