With the resumption of tax audits, criminal proceedings for alleged tax evasion have become more frequent, even when the tax liabilities are still not settled or in dispute.<\/p>\n
Under the law (Part 1 of Article 212 of the Criminal Code of Ukraine), liability arises only for malicious <\/i>tax evasion, meaning there must be an actual failure for the funds to reach the budget and the presence of intent. If the tax liability is disputed, the fact of \u201cnon-payment of taxes\u201d may legally be absent \u2014 making criminal prosecution in such cases questionable.<\/p>\n
In theory, an act of tax audit itself is not a statement of a crime and, by law, should not be automatically referred to law enforcement before the liabilities are settled. However, in practice this often occurs: law enforcement initiates cases even while the dispute is still ongoing or before the tax notice is issued \u2014 that is, before the debt \u201cofficially\u201d arises.<\/p>\n
A possible reason is the use of criminal proceedings as leverage on businesses \u2014 to pressure them into paying the assessments or to \u201cimprove the statistics\u201d of tax and law-enforcement agencies on filling in the budget. Law enforcement officers often suggest that taxpayers pay the amounts (even disputed or non-existent ones) \u201cbefore charges are filed\u201d to benefit from Part 4 of Article 212 of the Criminal Code and avoid criminal liability.<\/p>\n
It is therefore important to carefully assess whether to pay disputed amounts, and if yes \u2014 how and when \u2014 to avoid criminal liability, or to pursue the matter through tax disputes \u2014 while fully considering the associated risks.<\/span><\/p>\n