Yevhen Oleinikov: Our main goal is to minimize interference in activities of taxpayers who do not have the tax evasion risk

Analytical work and risk orientation are new vectors in work of the State Tax Service. It transforms into an intelligent service that applies tax control in doses with the greatest efficiency. This was stated by Deputy Chairman of the STS Yevhen Oleinikov during the discussion on “Reforming the State Tax Service through the prism of integrity of tax specialists and taxpayers”.

According to Deputy Chairman of the STS, the implementation of such a transformation is possible only if the STS will make a transition from formal analysis to the content analysis of business entity’s activity.

As of today, when the risk monitoring system is activated during the VAT administration and registration of tax invoice is stopped, the tax authorities offer business entities to explain their operations. Registration of tax invoice will be resolved according to the analysis results of provided supporting documents.

“Currently, we are quite efficient in administering the VAT risks due to available ability to analyze taxpayers’ operations. And this despite the fact that currently there is almost no such tool as tax audits due to the quarantine restrictions” – stated Yevhen Oleinikov.

According to him, currently not more than 1% of the total amount of tax invoices submitted monthly for registration is pre-stopped, which is approximately 25 million documents per month. Analysis showed that about 30% of cases of registration suspension are not appealed by the taxpayers. Based on complaints consideration results, ie analysis of explanations provided by the taxpayer on the content of operations and supporting documents, about 80% is content with the STS.

“We pay attention to the logic and validity of operations, their focus on profit, which the business itself always declares as a purpose of activities. And it is the analysis of this economic essence and understanding of this content allows us to determine the risk criteria, depending on which we respond to business actions” – stated Yevhen Oleinikov.

According to him, as of today, there are both tools that allow the STS to strengthen monitoring, in particular, application of risk status, and tools that allow minimizing this monitoring – this is the taxpayer’s table. Such tables provide opportunity to register tax invoices out of current monitoring. They are used precisely to reduce the focus on business in which the tax authorities see less risk and to focus on risky operations.

“The whole system of tax control is connected with all this system, including conducting tax audits. Our main goal is to make distribution of taxpayers according to their main risk categories and to minimize interference in activities of even those who have the least risks” – emphasized Yevhen Oleinikov.

The second direction in which the STS is now actively working is to raise awareness of taxpayers about the attention reasons from the tax specialists. It is currently being developed to provide detailed explanations to taxpayers on the application of risk status (why it arose and what caused doubts) so that the taxpayer can effectively protect own rights, prove position if the STS is wrong, including in court.

“In fact, now the regulatory system is balanced – we have the right to ask questions and taxpayer has the right to give us an answer. At the same time, taxpayer has the right to go to court and finally resolve our dispute if we have not agreed on the status of his / her operation, its content and purpose.” – emphasized Deputy Chairman of the STS.

Yevhen Oleinikov also stated that properly developed risk monitoring system reduces problems for both the STS, as a controlling body, and for the taxpayer. STS is still set up for a constant active dialogue with the taxpayers.

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