In December 2024, the State Tax Service of Ukraine published the list of bona fide taxpayers (taxpayers with a high level of voluntary compliance with tax legislation), and some public discussions and clarifications have already taken place. More details appear in the newsletter below.
Who can be included in the list of bona fide taxpayers
The list of bona fide taxpayers is maintained by the State Tax Service of Ukraine and will be updated quarterly. To be included in the list, a taxpayer must meet the following criteria:
- Timely payment of taxes
tax debt ≤ 3000 NMDH (non-taxable minimum income for citizens) lasting ≤ 30 days
- **Timely payment of the Unified Social Contribution (USC)**
absence of arrears, fines, or penalties for USC
- Compliance with monetary legislation
absence of time-limit violations for settlements in export-import operations during the last 12 months
- Compliance with tax reporting rules
absence of violations
- Low risk of tax evasion
absence of risky VAT payer status
- Stable business activity
absence of changes in the primary type of economic activity in the state register over the past 12 months
- A high level of tax revenues from the taxpayer
for enterprises under the general taxation system – corporate income tax paid ≥ the average indicator in the corresponding industry over the past four quarters; VAT paid ≥ the average indicator in the corresponding industry over the past 12 months (except for exporters whose export transactions ≥ 25%); the average salary over the last four tax periods ≥ the average salary in the corresponding industry in the corresponding region, multiplied by 1.1, and at the same time, the average monthly number of employees ≥ 5 persons; for residents of Diia City – the indicator of the level of tax payments to the consolidated budget ≥ the average tax payment rate to the consolidated budget by Diia City residents; for legal entities on a simplified taxation system (group III) – the indicator of the level of tax payments to the consolidated budget ≥ the average indicator in the corresponding industry over the last four quarters; the average salary over the last four tax periods ≥ the average salary in the corresponding industry in the corresponding region, multiplied by 1.1, at the same time, the average monthly number of employees ≥ 5 persons; similar requirements are established for legal entities – single tax payers of group IV and for individual entrepreneurs under the general or simplified taxation system
- Operating business entity
absence of an initiated procedure for the termination of a legal entity or entrepreneurial activity of an individual entrepreneur; absence of initiated bankruptcy proceedings
- Non-sanctioned person
absence of a decision to impose sanctions against the taxpayer or its founders (participants), ultimate beneficials owners
- Non-affiliation with the aggressor state
the taxpayer and/or its founders (participants) and/or ultimate beneficial owners are not citizens of a state that commits armed aggression against Ukraine (except for citizens of such a state who have been granted in Ukraine the status of combatants after April 14, 2014); Neither the taxpayer nor the founders (participants) /ultimate beneficial owners are individuals residing (or entities located) in a state that is conducting armed aggression against Ukraine
Newly created taxpayers may be included in the List from the first day of the month following the tax (reporting) quarter, but not earlier than one calendar year from the date of registration of such a taxpayer with the regulatory authority.
Regarding the inclusion of a taxpayer in the Register, the taxpayer is notified through its electronic cabinet. The fact of inclusion/exclusion of the taxpayer in/from the Register may only be used for the purpose of granting benefits under subparagraph 69.41, paragraph 69, subsection 10, section XX of the Tax Code of Ukraine (see below).
To the first list were included 4,488 enterprises under the general taxation system, 2,359 enterprises under the simplified taxation system (group III), 1,088 enterprises under the simplified taxation system (group IV), 169 Diia City residents, and 151 individual entrepreneurs.
As of 1 December 2024, taxpayers included in the List paid UAH 257.1 billion in taxes to the consolidated budget, which accounts for 16.6% of the total tax payments.
What benefits bona fide taxpayers receive
Reduction and/or simplification of unscheduled documentary tax audits
Taxpayers are not subject to such audits, except in the case of:
- request made of the taxpayer, in the event of failure to provide a response to a written inquiry from the tax authority regarding possible violations (subparagraph 78.1.1) or violation of reporting obligations (subparagraph 78.1.2) regarding transfer pricing;
- submission of a revised tax calculation for the audited period (subparagraph 78.1.3);
- reference by the taxpayer in its objections to an audit report or in a complaint against a tax notification-decision to circumstances that were not examined during the relevant audit (subparagraph 78.1.5);
- in the event of the reorganization of a legal entity (excluding transformation), the termination of a legal entity or entrepreneurial activity of an individual entrepreneur, the closure of a permanent establishment or a separate division of a legal entity, including a foreign company or organization, the initiation of bankruptcy proceedings against the taxpayer, or the submission of an application for deregistration as a taxpayer (subparagraph 78.1.7);
- VAT refund claim or declaration of a negative VAT amount > UAH 100,000 (subparagraph 78.1.8.);
- filing a complaint against a taxpayer regarding violations related to tax or excise invoices (subparagraph 78.1.9);
- in the event that the higher-level supervisory authority identifies non-compliance of an audit report's conclusions with legislative requirements or detects an incomplete examination of issues that should have been addressed during an audit (subparagraph 78.1.12);
- transfer pricing violations (subparagraphs 78.1.14, 78.1.15);
- transfer pricing report submission (subparagraph 78.1.16);
- the taxpayer fails to provide information for a counter-check within 10 working days (subparagraph 78.1.19);
- receiving information (documents) from foreign state authorities following a documentary audit regarding a taxpayer's violation of tax or other legislation, compliance with which is overseen by controlling authorities (subparagraph 78.1.21);
- receiving information about a non-resident conducting business activities through a permanent establishment in Ukraine (пп. 78.1.22.);
- receiving information about possible violations of settlement deadlines in export-import operations;
- taxpayers in the field of excisable products;
- taxpayers in the gambling industry;
- financial service providers;
- payment service providers.
Scheduled documentary audits are not initiated, except for audits of taxpayers in the areas of excisable products, the gambling industry, financial and payment services.
Factual audits concerning licensing activities for the storage of fuel exclusively for self-consumption and/or industrial processing will not be initiated.
The shortened deadlines for conducting desk and documentary audits related to VAT budget reimbursement, based on paragraphs 200.9 and 200.10, are five and ten days, respectively.
**Improving the level of tax consulting and access to information:**
tax rulings (IPK) are provided exclusively by the central office of the State Tax Service within 15 days (as opposed to 25 days general term with potential extension to 40 days); a compliance manager will be assigned to the taxpayer and will advise on tax obligations; the taxpayer has the right to receive information available to the tax service regarding potential tax risks in their activities and consultation on mitigating such risks within five days.
The term of the initiative regarding the bona fide taxpayer
The specified initiative will remain in effect until the end of the year in which martial law is terminated (revoked).