On 14 November 2019 I was delighted to conduct a LIGA-ZAKON webinar on the topic of the tax reform from "Servant of the People".
During the webinar, the changes that had already been implemented and those that are just planned were considered. The former, in particular, embraced the decriminalization of fake entrepreneurship and raising the thresholds for liability for tax evasion. Among the latter, were the introduction of a single tax account, tax amnesty, the establishment of the Financial Investigation Bureau and a number of changes related to tax administration under the Bill No. 1210-1.
In the course of the webinar, the most attention was paid to the impact of the decriminalization of fake entrepreneurship on the practice of tax dispute resolution. There are already some early court judgments following the decriminalization. Unfortunately, those judgments often give a diametrically opposite assessment of the decriminalization. Some courts do not have regard to judgments of conviction for fake entrepreneurship committed by officers of the counterparties issued before the decriminalization of fake entrepreneurship actually occurred. Other courts, on the contrary, do not see any impediment for having regard to such judgments of conviction.
Of particular concern is also a substitute for fake entrepreneurship found by the tax police. This is a criminal offence set forth by section 201-1 of the Criminal Code of Ukraine (forgery of documents submitted for state registration of legal entities and individual entrepreneurs). Nowadays, the tax police tries to apply extensively this section to cases that have previously fallen under fake entrepreneurship. It is feared that over time this practice will become widespread and, accordingly, the positive effect of the decriminalization of fake entrepreneurship will be nullified.
