Regarding specifics of conducting actual audits

Article 75 of the Tax Code of Ukraine stipulates that controlling bodies have a right to conduct actual audits.

Actual audits are carried out by the controlling bodies within the scope of their authority in cases and in manner established by the Tax Code of Ukraine and other laws of Ukraine, control of compliance with which is entrusted to the controlling bodies.

Actual audit is carried out at place of actual taxpayer’s activities, location of economic or other objects of property rights of such taxpayer is considered actual. Such audit is carried out by the controlling body regarding compliance with legislation on the regulation of cash circulation, procedure for taxpayers to perform settlement operations, conducting cash transactions, availability of licenses, certificates, including on the production and circulation of excisable products, employer's compliance with legislation on the conclusion of employment contract, registration labor relations with employees (employed individuals).

Sub-paragraphs 80.2.1 – 80.2.7 of Paragraph 80.2 Article 80 of the Tax Code of Ukraine stipulate that actual audit may be carried out on the basis of decision of the head (deputy or authorized individual) of the controlling body issued by order, copy of which is delivered to the taxpayer or his/her authorized representative, or to individuals who actually carry out settlement operations, under receipt before the start of such audit, and in the presence of at least one of the following reasons:  

in case when, as a result of audits of other taxpayers, facts are revealed that indicate possible legislative violations committed by the taxpayer on the production and circulation of excisable products, the taxpayer's settlement operations, conducting cash operations, presence of patents, licenses and other documents, control over the availability of which is entrusted to the controlling bodies, and there is a need to verify such facts;

in case of availability and/or receipt of information from state bodies or local self-government bodies according to procedure established by the law, which indicates possible legislative violations committed by the taxpayer, control of which is entrusted to the controlling bodies, in particular, regarding implementation of settlement operations by taxpayers, including ensuring the possibility of settlement for products (services) using electronic payment means, conducting cash transactions, presence of patents, licenses, and other documents, control over the availability of which is entrusted to the controlling bodies, production and circulation of excisable products;

written request of the buyer (consumer), compiled according to the law, about violation by committed the taxpayer of the established procedure for carrying out settlement operations, including failure to ensure the possibility of settlement for products (services) using electronic payment means, cash transactions, patenting or licensing;

non-submission by the business entity of mandatory reporting on the use of registrars of settlement operations and/or its software version, settlement books and accounting books of settlement operations within a period established by the law, their submission with zero indicators;

in case of availability and/or receipt of information according to procedure established by the law about violations of legislative requirements in terms of production, accounting, storage and transportation of ethyl alcohol, alcoholic beverages, tobacco products, liquids used in electronic cigarettes and fuel and targeted use of ethyl alcohol by the taxpayers, equipment of excise warehouses with flow meters and/or mass flow meters, as well as performance of functions defined by legislation in regulation of production and circulation of alcohol, alcoholic beverages, tobacco products, liquids that used in electronic cigarettes, fuel;

in case of detection of legislative violation on issues defined in Paragraph 75.1.3 of the Tax Code of Ukraine based on the preliminary audit results;

in case of availability and/or receipt in manner established by the law of information about use of labor of hired individuals without proper registration of employment relations and payment of income by employers in the form of wages without payment of taxes to the budget, as well as implementation of entrepreneurial activity by individual without state registration.

Please note that the State Tax Service of Ukraine and its territorial bodies, organizing and conducting control and verification measures, check only those business entities in whose activities there are risks of violation of tax and other legislation, control of compliance with which is entrusted to the controlling bodies.