STS: audits of business entities in quarantine

COVID-2019 has made significant adjustments to the control and verification work. Documentary audits were conducted by 35% less than in 2019 due to the moratorium on audits in 2020. Quarantine stopped all scheduled audits in 2020.

Tax auditors, during the moratorium, focused on permitted control measures, as well as on identifying risky operations, gathering evidence of violations, preparing amendments to regulations and improving electronic services for taxpayers.

Resolution of the Cabinet of Ministers of Ukraine as of 03.02.2021 № 89 “On reducing the validity of restriction on the moratorium on certain types of audits” lifted the ban on conducting certain types of documentary audits by regulatory authorities during the quarantine.

The fourth paragraph of this Resolution allows scheduled audits. It is worth recalling that in terms of audits for 2021, there are 4.3 thousand taxpayers with estimated risks for 25.4 billion UAH.

730 scheduled audits have already been completed, which recorded violations amounting to 43.5 billion UAH.

The specified Resolution of the Government also lifted the ban on unscheduled audits of business entities of the real sector of economy that formed a dubious VAT tax credit.

Determining such entities, the STS is guided by lists of risky taxpayers identified within the work of Temporary Commission of Inquiry of the Verkhovna Rada of Ukraine, which investigates possible corrupt actions of government officials that led to the loss of state budget revenues. 2.9 thousand such entities for 30.7 billion UAH of risky VAT have been identified.

To date, unscheduled audits have already covered about 300 taxpayers, as a result of which monetary obligations have been additionally accrued. Negative value and the budgetary VAT reimbursement have been reduced by 750 million UAH. Another 250 million UAH is a result of scheduled audits of this taxpayer’s category.

STS and its bodies are determined to continue strengthening control over the most risky taxpayers and to focus resources on increasing not the number of audits but their quality. Appropriate measures will be aimed both at preventing violations and their further detection.

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