{"id":519,"date":"2012-12-26T14:12:22","date_gmt":"2012-12-26T12:12:22","guid":{"rendered":"https:\/\/kmp.ua\/?p=519"},"modified":"2016-03-10T15:10:37","modified_gmt":"2016-03-10T13:10:37","slug":"krimnalna-vdpovdalnst-za-uhilennja-vd-splati-podatkv","status":"publish","type":"post","link":"https:\/\/kmp.ua\/en\/analytics\/infoletters\/krimnalna-vdpovdalnst-za-uhilennja-vd-splati-podatkv\/","title":{"rendered":"Criminal responsibility for tax evasion (Article 212 of the Criminal Code of Ukraine) \u2013 some aspects and amendments related to the new Criminal Procedural Code of Ukraine coming into force and respective amendments to the Tax Code of Ukraine"},"content":{"rendered":"

\u00a0with updates of May 28, 2013<\/span><\/em><\/p>\n

On November 20, 2012 the new Criminal Procedural Code of Ukraine (hereinafter \u2013 “the new CPC of Ukraine\u201d) came into force.<\/p>\n

The new CPC of Ukraine considerably changes the procedure of criminal proceedings. Thus, in particular, the order of the pre-trial investigation has considerable been changed: the stage of initiating the criminal case and bringing the charge was cancelled whereas the stage of notifying of suspicion was introduced etc.<\/p>\n

Unfortunately, the risks of initiating the criminal proceedings against the officials of the taxpayers do not decrease with the new CPC of Ukraine, which replaces the Criminal Procedural Code of Ukraine of the year 1960 (hereinafter \u2013 “the old CPC”). Thus, practically every dispute with the tax authorities at a considerable amount may result in initiating the criminal proceedings against the officials of the taxpayers. Moreover, the new CPC of Ukraine diminishes the possibilities of the defence team to appeal against the actions of the investigating authorities.<\/p>\n

In this respect we draw your attention to the following aspects:<\/p>\n

1.
\n<\/strong>
\nThe stage of initiating the criminal case has been cancelled<\/span> due to the new CPC of Ukraine coming into force.<\/p>\n

Previously such stage of the criminal process has been a certain barrier between the pre-investigation check of the application\/notification of the crime (within the term to 10 days) and carrying out the pre-trial investigation. Besides, previously initiation of the criminal case could be appealed. Such opportunity was an effective instrument for protection and stopping “the investigative actions” against the person and the pressure on the legal entity at the very beginning of such actions. Now, the situation is more favorable for using of criminal cases for pressure on business and officials of the taxpayers.<\/p>\n

With the new CPC coming into force, the stage of initiating the criminal proceedings is changed to the stage of registering the data in the<\/strong> Unified Register of Pre-trial Investigations<\/strong> (hereinafter \u2013 “the URPTI”). From now on after receiving every application or notification<\/span> of the crime the investigator or the prosecutor are obliged to register the respective data in the URPTI during 24 hours and start the investigation. Refusal to accept or register the application or notification is not permitted. Nobody will be informed about registering the data in the URPTI or initiating the proceedings, <\/strong>since URPTI has the limited range of users (para.1.11 of the Order of the General Prosecutor Office of Ukraine No. 69 of August 17, 2012). That is, the taxpayer\/ the official (in the absence of conducting the public investigations thereof, such as, for instance, search or seizure) may find out about the criminal proceedings initiated against them only by receiving the notification of suspicion.<\/p>\n

Thus, in our opinion, one of the biggest drawbacks of the new CPC of Ukraine is the absence of possibility of the defence to appeal against registering the data in the URPTI <\/strong>and, respectively, initiation of the investigation. In other words, the defence has almost no possibility to prevent the investigation until its completion and bring of the bill of indictment to the court. Moreover, under the following provisions of the new CPC another “danger” is concealed: namely, criminal proceedings may “hang” in the URPTI during all the possible term of bringing to criminal responsibility (e.g. 10 years under part 3 of Article 212 of the Criminal Code of Ukraine). So, until the notification of suspicion, the investigator or the prosecutor, investigating the case, are unlimited in terms of such investigation<\/strong> (except for the general terms of limitation for bringing to criminal responsibility for particular crimes), that is during this time you can “wait for guests” from law enforcement authorities who may unexpectedly “come with questions,” for example with questions regarding the conclusions of the tax audit which was conducted by tax authorities more than a year ago.<\/p>\n

The next stage of the process will be notifying the person of suspicion<\/span>. The investigator will have the right to notify the person of suspicion “with the sufficient evidence for suspicion of the person in committing the criminal violation”. From the moment of notification of suspicion the person receives the status of suspected and only from this moment possesses the rights and warranties envisaged by the new CPC. Before notifying of suspicion the person has almost no procedural rights or ways of defence. Therefore, after registering the data in the URPTI, the person will receive the status of the witness and will possess the minimal rights for defence, whereas the investigator and the prosecutor will have the possibility to conduct the investigation “in full scope”.<\/p>\n

After notifying the person of suspicion the investigator has two months for conducting the investigation. After expiration of this time (if the term was not extended by the prosecutor), the investigator has either to close the case or to bring it to the court with the bill of indictment.<\/strong><\/p>\n

The scheme of pretrial investigation under the new CPC is the following:<\/strong><\/p>\n

(in case that starting from registering the data in the URPTI the criminal proceedings was not further dismissed)\"chart<\/p>\n

2.<\/strong><\/p>\n

Due to the new CPC coming into force, the Tax Code of Ukraine (hereinafter \u2013 “the TC of Ukraine”) has also been amended, in particular, para.\u00a056.22 of Article\u00a056 of the TC of Ukraine, <\/span>according to which in case of appealing the decision of the controlling body in the order of administrative appeal to the higher controlling bodies<\/strong> and\/ or to the court, notification of suspicion in commission of crime <\/strong>envisaged by Article 212 of the Criminal Code of Ukraine cannot be grounded on such decision of the controlling body till the end of the procedure of the administrative appeal or till the final solution of the case by the court.<\/strong><\/p>\n

Thus, if the accusation of a person under Article 212 of the Criminal Code of Ukraine is grounded on the tax audit act, then up to the end<\/strong> of the administrative appeal of the decision of the tax authority made upon the results of such audit act and\/ or up to the decision of the Higher Administrative Court of Ukraine (in some cases up to the decision of the Supreme Court of Ukraine)<\/strong> not in favor of the taxpayer, the person may not be presented with the notification of suspicion.<\/strong><\/p>\n

In our opinion, the administrative or the court appeal of the decisions of the tax authorities will probably be the only effective way to protect the enterprises\u2019 officials from bringing them to criminal responsibility.
\n<\/strong><\/p>\n

It shall be mentioned that the rule of para. 56.22 of Article 56 of the Tax Code of Ukraine may not be applied<\/strong> if the notification of suspicion is based not only on the decision of the controlling body, but is also confirmed by the additionally collected evidence. Such evidence may be, for instance, the protocol of interrogation of the witness and\/ or the conclusion of the expert.<\/p>\n

\n

Moreover, the investigation authorities of the tax service have already “got used” to such rule and initiate the proceedings under the other reasons than the tax audit act or the tax notifications-decisions made on its basis.<\/p>\n

Therefore, it is possible<\/strong> that after registering the data in the URPTI, the person will be informed about the suspicion. Such scenario results in serious negative consequences for the officials of the taxpayers, which will be covered further.<\/p>\n

3.<\/strong><\/p>\n

We draw your attention to the quantitative restrictions envisaged by Article 212 of the Criminal Code of Ukraine (hereinafter \u2013 \u201cthe CCU\u201d), according to which tax evasion may result in criminal responsibility):<\/p>\n