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Draft Law No. 3448

23 March, 2016 Projects and publications

“Sick and tired” of criminal cases on disputes with tax authorities? Had enough of non-recognition of tax credit due to verdicts on contractors? What shall be done then?

One can wait for the changes inside the country and hope that sooner or later this sphere will also be property regulated and the case will be dismissed. But how long one shall wait?

A good solution of the situation is to get involved in adoption of the Draft Law “On amendments to the Tax Code of Ukraine related to peculiarities of the criminal proceeding in tax relations and issues of tax and duties administration” as of November 10, 2015.

How can this Draft Law help?

The draft is aimed to:

  • specify definition of crime under Article 212 of the Criminal Code of Ukraine: tax evasion occurs only in case of nonpayment of the conciliated tax liabilities to the state Budget of Ukraine within the terms, established by the law;
  • increase the threshold for criminal liability under Article 212 of the Criminal Code of Ukraine;
  • determine the procedure of criminal proceedings closure in case if the liabilities are inconsistent or were paid in terms, established by law.

The offered changes are aimed at reduction of the criminal proceedings on bona fide taxpayers and, respectively, reduction of pressure on business.

Besides the changes, aimed at struggle against groundless opening and conducting of criminal proceedings against bona fide taxpayers, Draft Law No. 3448 has the purpose to regulate the problem of application of the verdicts on approval of plea agreements under Article 205, 212, 212-1,358,366 of the Criminal Code of Ukraine by the State Fiscal Service of Ukraine for the purposes of proof of unreality of transactions of bona fide taxpayers. Recently, this instrument has been often applied by the law enforcement bodies and the State Fiscal Service of Ukraine, since for suspects in such crimes it is easier to get off with a small penalty in exchange for signing the agreement drafted by the investigator or prosecutor, rather than undergo the entire procedure of court proceedings with a more severe punishment. The facts, set out in the agreement, are not checked by the court when approving plea agreements.

As a rule, the verdict on approval of plea agreements, in which the director or the contractor of the bona fide taxpayer refuses from any business activity and signing of primary documents regarding all or some contactors, is considered by the administrative courts as absolute proof  of unreality of transactions. It is almost impossible to refute it by other evidence (unless the same director or member declares the opposite as a witness in this administrative process). The Code of Criminal Procedure of Ukraine, however, does not envisage the possibility for the bona fide taxpayer to appeal the verdict.

Therefore, Draft Law No. 3448 offers:

  • to provide the possibility to appeal the verdict for the bona fide taxpayer, the rights of whom are violated by such verdict;
  • to establish optional legal consequences of the acts or inactivity of persons, defined in such verdicts.

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