Part 2 Article 19 of the Constitution of Ukraine stipulates that state authorities and local self-government bodies, their officials are obliged to act only on the basis, within limits of authority and in manner provided for by the Constitution and laws of Ukraine.
Legislative act, which regulates relations arising in tax sphere and levy administration, in particular defines exhaustive list of taxes and levies that are levied in Ukraine and procedure for their administration, taxpayers and levies, their rights and obligations, competence of controlling authorities, powers and obligations of their officials during tax control, as well as responsibility for violations of tax legislation, is the Tax Code of Ukraine (hereinafter – Code).
Peculiarities of audits during the martial law are determined by Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Code.
Audits of business entities that are not located in territories of possible, active hostilities and active hostilities, where state electronic information resources function, must be carried out taking into account requirements of Sub-paragraph 69.22. Documentary and factual audits during the martial law are carried out in the presence of safe conditions for their conduct, namely safe:
access, admission to territories, premises and other property, which are used for carrying out economic activities and/or are taxation objects, or used to receive income (profit), or are related to other taxation objects of such taxpayers;
access, admission to documents, certificates on financial and economic activity, received income, expenses of taxpayers and to other information related to accrual and payment of taxes, levies, payments, compliance with legislative requirements, implementation of control of which is entrusted to the controlling authorities, as well as to financial and statistical reporting in manner and on grounds determined by the law;
inventory of fixed assets, tangible assets, funds, withdrawal of residual assets, cash.
Documentary and actual audits that have been started (renewed), but cannot be completed due to the occurrence of circumstances specified in this Sub-paragraph or in connection with submission of notifications by taxpayers and taking into account requirements provided for by Sub-paragraph 69.28 of this Paragraph, and/or at the motivated taxpayer’s application, are stopped until the end of effect of such circumstances and/or removal of obstacles to audit by decision of the head (deputy or authorized person) of the controlling authority, which is issued by order, copy of which is sent to the taxpayer to the taxpayer’s electronic account of taxes with simultaneous sending to the taxpayer’s e-mail address(es) of information about the document type, date and time of its sending to the e-mail account. Such circumstances stop the course of audit period with subsequent renewal of its audit for the unused period. Documentary audits are not subject to suspension on grounds specified in Sub-paragraphs 78.1.1 (in part of unscheduled documentary audits of taxpayers, in respect of which information has been received that indicates violation of tax legislation on taxation of income received by non-residents with a source of origin in Ukraine), 78.1 .8 (in part of declaration of budgetary compensation), 78.1.21 of Paragraph 78.1 Article 78 of this Code.
Sub-paragraph 69.28 establishes that taxpayers/tax agents who conducted activities in territories of active hostilities or in territories of Ukraine temporarily occupied by the russian federation and cannot present primary documents on the basis of which accounting of income, expenses and other indicators is carried out, related to determination of taxation objects and/or tax obligations, as exception to provisions of Article 44 of this Code, special rules are applied to confirm data specified in tax reporting.
Reasons for impossibility of presenting primary documents are the loss (destruction or deterioration) of primary documents or their finding in territories where hostilities are (were) taking place and in territories of Ukraine temporarily occupied by the russian federation, in case that it is impossible to export them or their export associated with a risk to the taxpayer’s life or health, individuals or impossible due to administrative obstacles established by the authorities.
In case of loss and/or impossibility of export of primary documents, the taxpayer/tax agent submits to the controlling authority in arbitrary form notification on the impossibility of export of primary documents, signed by the head of enterprise and the chief accountant, which states: circumstances that led to the loss and/or impossibility of export of primary documents, tax (reporting) periods, as well as general list of primary documents (if possible, with requisites indicated).
Data and indicators of tax reporting of the taxpayer/tax agent for tax (reporting) periods specified in notification cannot be questioned only on the basis of absence of primary documents. Submitted notification is also a basis for maintaining expenses (including expenses in connection with acquisition of securities/corporate rights) and/or negative value of taxation object with income tax (including negative financial result from operations with securities/corporate rights), and/or the value added tax credit, and/or amount of negative value of value added tax of past tax (reporting) periods without the presence of contractual, settlement, payment and other primary documents, obligation to maintain and storage of which is provided for by rules of accounting and accrual of tax.
After submitting notification to the controlling authority about the impossibility of exporting primary documents in connection with their presence in territories where hostilities are (were) taking place and in territories of Ukraine temporarily occupied by the russian federation, a moratorium is introduced on the conduct of documentary audits regarding tax documents specified tax (reporting) periods in notification.
If, after submitting notification about the impossibility of exporting primary documents, the taxpayer/tax agent becomes aware of the loss of such documents, such taxpayer/tax agent is obliged to submit notification of loss of primary documents to the controlling authority, indicating circumstances of such loss.
Taxpayers/tax agents who submitted notification of the loss of primary documents in accordance with this Sub-paragraph are not subject to audit by the controlling authority for tax (reporting) periods specified in notification, including after end of the martial law.
Loss of documents, which is not related to hostilities in the territories where hostilities are (were) taking place and in territories of Ukraine temporarily occupied by the russian federation, does not entitle the taxpayer/tax agent to apply provisions of this Sub-paragraph.
Responsibility of proving absence of grounds for application of provisions of this Sub-paragraph rests with the controlling authority. Taxpayer/tax agent who unreasonably applied provisions of this Sub-paragraph is considered to be evading payment of taxes and bears responsibility provided for by this Code and other laws of Ukraine.
In case of refusal to apply provisions of this Sub-paragraph, the controlling authority issues reasoned decision not later than one month from the date of receipt of relevant notification from the taxpayer/tax agent, indicating grounds and evidence of such refusal.
Decision of the controlling authority can be appealed in administrative or judicial manner. Until the final decision on case is made, the controlling authority cannot call into question indicators of tax reporting, as well as initiate any audit of the taxpayer/tax agent regarding tax (reporting) periods specified in relevant notification.
In tax (reporting) periods specified in relevant notification, amount of tax liabilities from taxes and levies declared in tax declarations for the specified tax (reporting) periods cannot be revised in direction of increasing amount of negative value of the income taxation object, declared in tax declarations/calculations for the specified tax (reporting) periods, in direction of increasing amount of budgetary value added tax refunding, declared in tax declarations for the specified reporting periods.
List of territories where hostilities are (were) taking place or temporarily occupied by the russian federation is determined in accordance with procedure established by the Cabinet of Ministers of Ukraine, according to Order of the Ministry for Reintegration of the Temporarily Occupied Territories of Ukraine № 309 as of 22.12.2022 "On approval of the List of territories where hostilities are (were) taking place or temporarily occupied by the russian federation" (with changes).