State Tax Service conducted 24 thousand actual audits in tobacco and alcohol circulation sphere, fines reached 795 million UAH

Specialists of the State Tax Service have conducted 24 thousand actual audits in tobacco and alcohol circulation sphere since the beginning of year. Fines for detected violations amounted to more than 795 million UAH, more than 2.5 thousand licenses were canceled. This was stated by acting Head of the State Tax Service Lesya Karnaukh during the meeting with representatives of the American Chamber of Commerce in Ukraine. 

“Combating illegal alcohol and tobacco market is among the TOP questions. Where violations of licensing conditions have been recorded, we will continue audits. As these are not minor mistakes, but violations that harm business and citizens” – said Lesya Karnaukh.  

The most common violations: product circulation without the excise tax marks or with the counterfeit marks, production and sale without licenses, sale without issuing checks, sale of unaccounted products, etc.

State Tax Service, together with the law enforcement agencies, is constantly implementing a set of measures to reduce shadow market. 

“Recently, together with the Bureau of Economic Security and State Financial Monitoring Service, we met with the largest players in the electronics and technology market. The main problems we face are: product sales without proper fiscal checks, violations of inventory accounting and lack of official employment” – Lesya Karnaukh informed.

She also spoke about the new services from the Tax Service – Tax Consultant Offices. In early September, 20 such Offices were opened, which provide free and high-quality services for every taxpayer. More than 8 thousand clients have already taken advantage of the opportunity to receive consultation and they are becoming even more in demand. 

Also among the questions on which the State Tax Service is primarily focused:

Digitalization. 

State Tax Service, together with the Ministry of Digital Transformation, is working on introducing a number of other digital services. In particular, ability to review one’s tax obligations, pay taxes in one click in the Diia application, and launch electronic tax services for Ukrainians abroad.

One more initiative is automatic write-off of funds from debtors’ accounts through the National Bank of Ukraine’s electronic payment system. Together with the Fiscal Center, the State Tax Service launched the “Tax Revenue Monitoring” dashboard, which was a significant step towards data transparency.

Tax mediation.  

There is a huge demand for such tool from both business and tax authorities. This will significantly contribute to the settlement of disputes between taxpayers and tax authorities. But this needs to be approached constructively and high-quality document developed together with the business community.

Transfer pricing and the agricultural sector.

Participants considered approaches to the taxation of forward contracts, practice of applying the transfer pricing rules according to the OECD recommendations, as well as coordinating prices and delivery terms upon the export of agricultural products.

International cooperation.

Discussed questions included prospects for concluding agreement with the US Internal Revenue Service (IRS) on the automatic exchange of reports (BCAA CbC) and expanding exchanges with Canada and Israel within framework of the OECD multilateral agreement.