Tax - EU4PFM

Alignment with EU legislative/administrative framework in taxation:

Detailed list of EU legislation with recommendation on priorities for compliance with EU acquis on taxes provided
Main operational (IT) solutions operating in EU tax presented and demonstrated in practice during the study visits to the Lithuanian and the Slovak Tax authorities
Preparation for the screening with the focus on of compliance of the Ukrainian legislation with EU law under the negotiation Chapter 16 “Taxation” assisted
A comprehensive analysis of the harmonization of Ukrainian legislation on VAT with the EU VAT Directive in accordance with the Association Agreement with the EU carried out
The Comparative tables on compliance of the Ukrainian legislation with the EU Directives on tax were prepared ((2006/112/EC, 2009/132/EC; 86/560/EEC, 2007/74/EC, 2008/9/EC, 2006/79/EC, 2020/262, 92/83/EEC, 92/84/EEC, 2011/64/EU, 95/60/EC, 2003/96/EC, 2016_1164, 2003/49/EC, 2011/96/EU, 2009/133/EC, EU Arbitration Convention_90_463, Code of conduct for the implementation of Convention on elimination of double taxation in connection with adjustment of profits of associated enterprises, 2017/1852, 2011/16/EU, 2010/24/EU);
The Comparative tables on compliance of the Ukrainian legislation with the EU Commission Implementing regulations on VAT, excise tax and administrative cooperation are being prepared
Drafting of primary and secondary legislation on implementation of the OECD Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy/(Model Rules for Reporting by Platform Operators) and DAC7 provisions supported
Expertise provided for the development of the draft amendments to the Tax Code of Ukraine aiming at implementation of the EU acquis in tax area (aligning of VAT incentives, ATAD implementation)
Methodological recommendations on the application of the decisions of the Court of Justice of the European Union (CJEU) for the tax control measures, consideration of taxpayers’ appeals and resolving tax disputes were developed.

Implementation of the OECD standards on automatic exchange of information (AEOI) under CbC and CRS standards:

International experience presented and recommendations provided regarding the development of business processes in the tax administration, application of IT solutions, use of information obtained within the framework of AEOI for the purposes of tax control
Guidance provided in drafting legal and normative acts on AOI implementation; drafting of CRS primary legislation supported (adopted by Parliament, Law № 2970-IX); drafting CRS sub-legislation supported
CRS/CbC draft methodologies for IT deployment developed; Automatic Exchange of Tax Information IT subsystem as a component of the International Automatic Exchange of Information IT system developed and deployed
Draft methodologies of the STS on CRS procedures have been developed; draft STS CRS Compliance Strategy developed
Workshops on (1) practice of the CRS application for other institutions and associations, (2) CRS data use for tax control purpose and (3) RFI’s compliance with the new CRS due diligence and reporting requirements arranged
The MoF and the STS supported in Information security management assessment and Confidentiality and Data Safeguards Assessment conducted by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes
Drafting of CbC sub-legislation was supported.

Support for the improvement of the tax legal framework for the implementation of the EU/OECD practice in the field of taxation:

Methodological support was provided during the development and discussions of the provisions of the tax legislation on BEPS measures implementation
Recommendations were provided on the (1) application of the “substance over form” principle, indirect taxation methods, distribution of responsibility, (2) implementation of EU practice on tax control measures for the informal economy, including e-commerce through electronic platforms, use of direct and indirect methods to reduce informal activity and practice on notification about violation, (3) application of indirect taxation methods: legislative provisions, court practice, as well as internal tax administration methodology on this initiative, (4) implementation of Mutual Agreement Procedures (MAP) and Advance Pricing Agreements (APA) practices
Support was provided for the participation in the activities of the OECD Global Forum
Expert support was provided to the MoF during the review of the OECD Global Forum on the implementation of the Exchange of Information on Request (EOIR) Standard
Legislation addressing OECD EIOR recommendations drafted (adopted by Parliament)
Institutional capacity is built by financing access to international knowledge platforms and translation of documents.

Establishment of the tax risk management system:

High-level recommendations were provided on building a comprehensive tax risk management system, tax risk management functions, risk management strategy and risk identification methodology
Support was provided for the development of Tax Compliance Strategy
Recommendations were provided on functional requirements and the structure of the Data Warehouse
Support was provided for the development of functional requirements for Cash Register Information System (CRIS ).

Introduction of Electronic audit:

Recommendations were provided on the of electronic audit, its methodology and business processes within tax authorities; business processes review for the introduction of electronic audit was carried out
Functional and technical requirements for electronic audit software were developed
Methodological support and financing were provided for the development of the technical description of the standard audit file SAF-T UA (versions 1.0 and 2.0)
E-audit methodology (audit tests) developed
The expertise is being provided for the STS for the explanatory work with taxpayers
IT system for the E-audit is being implemented.

Improvement of transfer pricing audit:

Support was provided in drafting of legal and normative acts on the application of the rules for ensuring compliance of the conditions of commodity controlled transactions with the arm’s length principle
Business processes analysis of the control function of ensuring compliance with the conditions of controlled operations under the arm’s length principle was carried out
IT system for the big data processing, transfer pricing risks assessment and identification developed and implemented.

Introduction of a centralized service model by modernizing the STS contact center:

Best international practice regarding the development of business processes of a contact center of the tax administration was presented and the recommendations of international experts provided
The Concept of a New Service Model for taxpayers for the STS Contact Center and service centers developed
A modern concept of Contact Center has been implemented, including the acquisition of state of the art IT equipment and software
A comprehensive communication campaign has been conducted to promote a services of the modernized Contact Center
Draft Concept on Service Quality Measurement was developed (for modernized Contact Center).

Introduction of electronic cash registers:

Recommendations on the (1) EU practice regarding the implementation of electronic cash registers, IT architecture and cash register operating procedures; (2) EU practice regarding the use of cash register data for risk management and tax control purposes; (3) EU practice regarding the legal regulation of cash registers’ operation provided.
Free mobile cash registers application for IOS and web and improvements of Android and Windows versions are developed
A communication campaign to expand the scope of electronic cash registers application supported
The e-catalogue, an automated tool to properly define the code (nomenclature) of goods or services which are recorded in cash registers by taxpayers, developed and launched. The STS and the taxpayer have more precise data for the analysis and reporting.
Data Accounting System for Cash Registers (CRIS) developed for collection, storage, processing of data from cash registers verification of authenticity and accuracy of transaction documents.

Creation of a single tax account:

Support provided for drafting the sub-legislation on Single Tax Account introduction and operation
Single Tax Account ranking module (a tool for exchange of information on tax liabilities with the State Treasury Service of Ukraine) developed and launched.

Strengthening of administration of tax disputes at appeal and litigation:

European legislative and judicial practice in taxation and tax disputes procedures as well as on the tax disputes prevention measures was presented
Recommendations were provided regarding the procedure for resolving tax disputes through settlement agreement procedure and mediation
Support was provided for the preparation of draft amendments to the legislation on improving the procedure of tax disputes
Methodologies were developed for categories of cases in tax disputes
Functional requirements for the IT system for the administration of tax disputes at the stage of administrative appeal and court proceedings were developed and respective software was developed and lauched into operation.

Improvement of the property tax administration:

Best international practices in the property tax administration with recommendations for improving the management of property taxes provided.

Improving the basis for the tax debt management:

Advanced international practice in the tax debt administration with recommendations on improving the tax debt management provided
Draft functional and technical requirements for automatization of the administration of the tax debts have been prepared
The practice on national legislation, implementation of business processes and elaboration of the methodologies within the tax authority for the optimization recovery of taxes function as well as relevant IT solutions for the debt administration processes automatization were presented during the study visit of the STS officials to Lithuania.

Improvement of the excise duty administration:

Business processes review of the excise stamps administration carried out
Support was provided in drafting legal and normative acts governing the administration of excise stamps.

Ensuring a common approach to the tax legislation:

New Webportal of the STS was developed and launched. It offers a more user-friendly interface, simplifies search for information and has improved design

Assistance was provided to the STS in the preparation of STS Information Letters to taxpayers regarding the new tax legislation
Assistance was provided to the MoF in the preparation of Generalized Tax Consultations on the application of the tax legislation.