Creation of a club of «white» taxpayers: Igor Derevianko’s comment to the FOCUS Online

In Ukraine, a separate register of taxpayers with a high level of tax compliance can be created. However, is it possible to achieve certain economic victories thanks to him?

Senior partner Igor Derevianko shared his own vision of potential economic victories for entrepreneurs in a new interesting article of FOCUS Online.

The Ukrainian Parliament is considering a draft of amendments to the Tax Code, which provides for the creation of a special register of taxpayers with a high level of compliance with tax legislation. However, experts express doubts about whether significant economic gains can be expected from this initiative.

According to the submitted draft law No. 11084 of March 13, 2024, in case of adoption of changes to the tax legislation, a list of taxpayers with a high level of voluntary compliance with tax obligations will be created. Legal entities on the general taxation system and individual entrepreneurs who pay a single tax of the third group can be included in this list under certain conditions.

According to the explanation of Andrii Shabelnikov, Managing partner of EvrikaLaw and Head of the NAAU Committee on Investment Activities and Privatization, the process of inclusion in this register will be carried out by tax authorities without the involvement of third parties. There is no provision for taxpayers to apply to tax authorities for inclusion in the register or appeal against non-inclusion.

Tetyana Yashchenko, Partner at EXPATPRO, emphasizes that such a register may cause risks regarding possible abuse and corruption, since third parties will not have the opportunity to control the process of inclusion in it.

It should be noted that the list of taxpayers will be updated every quarter and will be valid as long as the taxpayer maintains a high level of tax compliance. These special rules will continue to apply during martial law and until the end of the year in which it is lifted or suspended.

Exclusive VIP rooms, comfortable lounge areas and a personal manager are just some of the benefits that the government offers to a special category of taxpayers. However, will everyone be able to get into this elite “white” club?

Senior partner at DEGA Partners Igor Derevianko compares this approach with premium banking services, where customers who pay a subscription fee are given various privileges, including service without waiting in line in the VIP hall and access to the lounge – airport zones, as well as a personal manager ready to provide advice and solve any client’s questions.

However, not every payer has a chance to become a member of such a «white» club. Only those who meet certain criteria can automatically use the «premium service» from the tax office. This may be a step in improving communication between the tax system and business, but it is important that other taxpayers who do not fall into this category do not end up in the «grey» area due to insufficient criteria.

There is a risk of human intervention, which can lead to the accidental inclusion or exclusion of payers from the lists of «white» clients. In addition, not all criteria are focused on compliance with tax legislation, which can create additional difficulties.

The project also provides for the obligation of taxpayers with a high level of voluntary fulfillment of tax obligations to interact with compliance managers who are responsible for compliance with tax legislation and prevention of corruption. However, it is not entirely clear what impact their consultation will have in the event of a breach.

So, although such a «white» club may facilitate cooperation with the tax office, its effectiveness and impact on the economy remain a matter of debate.

«According to Tetyana Yashchenko, the bill is not transparent, creates unequal conditions for large and small entrepreneurs, and imposes an unnecessary burden on tax authorities, as well as requires additional funding for compliance managers and experts to create and update the proposed register», she said .

Accordingly, legal experts hope that the parliament will consider appropriate amendments to the draft law, which will equalize the requirements for all taxpayers. Such balancing should provide everyone with the same conditions for inclusion in the «VIP club» of the tax system. Given the possible prospects, obtaining such a status in the future may have an expanded list of benefits and services, as well as serve as a database for making other strategic decisions.