Income tax payers, attention!

Press service of the State Tax Service of Ukraine, published 09 June 2023 at 16:49 Chapter: News

State Tax Service of Ukraine informs about exemption from liability of income tax payers for failure to submit annual financial reporting by June 10, 2022 and June 10, 2023, which must be published together with the audit report.

Clauses 2 and 4 of Paragraph 42.6 of the Tax Code of Ukraine No. 2755-VI as of 02.12.2010 (as amended) (hereinafter - Code) stipulate that income tax payers who, according to the Law of Ukraine No. 996-XIV as of 16.07.1999 "On accounting and financial reporting in Ukraine" (as amended) (hereinafter - Law No. 996) are required to publish annual financial reporting and annual consolidated financial reporting together with the audit report, submit together with tax declaration for relevant tax (reporting) period the report on financial status (balance sheet) and the report of profit and loss and other comprehensive income (report of financial results) prepared before the audit of financial reporting by the auditor. Report of financial status (balance sheet) and the report of profit and loss and other comprehensive income (report of financial results) are submitted by taxpayers in accordance with this Paragraph in a form determined according to the Law No. 996, in manner provided for the submission of tax declaration, taking into account requirements of Article 137 of the Code.

Income tax payers who, in accordance with the Law No. 996, are required to publish annual financial reporting and annual consolidated financial reporting together with the audit report, submit to the supervisory authority annual financial reporting, which are subject to publication together with the audit report, not later than June 10, that follows the report. In case of non-submission (late submission) of the annual financial reporting, which are subject to publication together with the auditor's report, the liability provided for in Paragraph 120.1 Article 120 of the Code will be applicable for submitting tax declarations (calculations).

It should be noted that temporarily, for a period until termination or abolition of the martial law on the territory of Ukraine, introduced by Decree of the President of Ukraine No. 64/2022 as of 24.02.2022 "On introduction of the martial law in Ukraine", approved by the Law of Ukraine No. 2102 -IX as of 24.02.2022 "On approval of Decree of the President of Ukraine "On introduction of the martial law in Ukraine", administration of taxes and levies is carried out taking into account peculiarities specified in Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Code.

Law of Ukraine No. 2836-IX as of 13.12.2022 "On amendments to the Tax Code of Ukraine and other laws of Ukraine on promoting restoration of the energy infrastructure of Ukraine", which entered into force on 03.01.2023, in particular, amended Sub-paragraph 69.1 Paragraph 69 Su-section 10 Section XX "Transitional Provisions" of the Code and it is established that they apply starting from 27.05.2022.

Clause 16 of Sub-paragraph 69.1 Paragraph 69 Su-section 10 Section XX "Transitional Provisions" of the Code stipulate that corporate income tax payers who, according to the Law No. 996, are required to publish annual financial reporting and annual consolidated financial reporting together with the audit report, are exempted from the responsibility provided by the Code for failure to submit or late submission of annual financial reporting, which are subject to publication together with the audit report, clarifying calculation to the annual tax declaration on the income tax of enterprises, which is submitted in case that indicators of the annual financial reporting published together with the auditor's report have undergone changes compared to indicators of financial status report (balance sheet) and profit and loss report and other comprehensive income (report on financial results), submitted together with tax declaration in accordance with the Clause 2 of Paragraph 46.2 Article 46 of the Code, and such changes affected the indicators of previously submitted annual corporate income tax declaration for relevant tax (reporting) period, with mandatory fulfillment of such duties within three months after termination or abolition of the martial law in Ukraine.

Therefore, the income tax payer is exempted from the liability provided for by the Code for failure to submit annual financial reporting by 10.06.2022 and 10.06.2023, which must be published together with the auditor's report with mandatory performance of such obligations within three months after termination or abolition of the martial law in Ukraine.

At the same time, please note that Part 1 of Article 163-1 of the Code of Ukraine on Administrative Offenses No. 8073-Х as of 07.12.1984 as amended stipulates that absence of tax records, violations by managers and other officials of enterprises, institutions, organizations of the procedure for keeping tax records established by the law, including non-submission or untimely submission of audit conclusions, submission of which is provided for by the laws of Ukraine, entails imposition of a fine in the amount of five to ten tax-free minimum incomes of citizens.

Part 1 of Article 9 of the Code of Ukraine on Administrative Offenses stipulates that administrative offense (misdemeanor) is illegal, culpable (intentional or negligent) act or omission that encroaches on public order, property, rights and freedoms of citizens, on the established management procedure and for which the law provides for administrative liability.

Herewith, part of Article 9 of the Code of Ukraine on Administrative Offenses stipulates that administrative responsibility for the offense provided for by this Code arises if these violations do not entail criminal liability according to the law.

Taking into account the above specified, and in connection with the exemption from liability of income tax payers, provided for by the Code, for failure to submit by 10.06.2022 and by 10.06.2023 the annual financial reporting, which are subject to publication together with the audit report, for the payer who did not submit such reporting, in fact there is no fault, therefore administrative responsibility to taxpayers, provided for in Article 163-1 of the Code of Ukraine on Administrative Offenses, during a period of the martial law for non-submission or untimely submission of audit conclusions is not applicable.