2022 in tax changes: what Ukraine managed to achieve

Times of trials always become times of new opportunities and achievements. In 2022, Ukraine demonstrated to the whole world its strength and resilience, as well as a powerful thirst for change.

The enemy underestimated Ukraine, which has been working on the implementation of fundamental reforms for many years. Despite the war, Ukraine continues to implement important reforms and digitise, including in the tax sphere. In extremely difficult conditions, Ukraine continues its confident path to the European Union.

Below are the main achievements of Ukraine in the tax sphere in 2022 and what will be implemented in 2023.

Paperless technologies, the comfort of the requirements of tax legislation — one of the important European standards. The EU4PFM project has been helping implement such improvements for more than a year — from a single account to the automatic exchange of tax information, joining which, by the way, is one of the requirements for European integration.

E-cash registers: serviceability and simplicity

E-cash registers (PRRO) software is an innovation that is considered one of the best modern practices, and it is nice to emphasise that Ukraine is one of the countries that introduced it.

E-cash registers from the State Tax Service is an official free software, developed for the convenient fulfilment of the tax legislation requirements by taxpayers regarding the provision of a check for the sale of goods or services. All that an entrepreneur needs to use the new registers is a mobile phone, tablet, or laptop.

A huge advantage of the new PRRO is its mobility, and the ability to work offline, which is especially important in wartime conditions when there are possible interruptions in power supply, communication, or relocation of business to other regions.

Since the beginning of the implementation of the PRRO, the EU4PFM Project has provided comprehensive assistance for this initiative. In particular, our international experts presented the best international experience in the introduction of E-cash registers software, we provided methodological support for the development of the necessary regulatory and legal framework, methodological recommendations. At this stage, with the financial support of the Project, the STS developed new technical versions for iOS and web and improved versions for Android and Windows.

CRS: joining global standards

Automatic exchange of tax information according to the CRS international standard is an effective solution in the fight against tax evasion and erosion of the tax base. More than 100 countries already participate in this exchange.

CRS provides for the annual automatic exchange of tax information between member states of the Multilateral Convention on Cooperation between Competent Authorities on the Automatic Exchange of Information under the CRS standard.

According to the CRS, participating countries annually exchange tax information regarding bank accounts of non-resident legal entities and individuals.

Joining the CRS is one of the important components of the harmonisation of Ukrainian legislation with European legislation upon the country’s accession to the EU. It is planned that Ukraine will carry out the first such exchange in 2024.

The EU4PFM project provides comprehensive support for the introduction of CRS: expert and methodological support for the development of the legislative framework and finances the development of IT solutions for the automatic exchange of tax information according to the standard (CRS).

Contact Centre: focus on service

Also in 2022, large-scale work continued to modernise the STS Contact Centre. This will allow taxpayers to receive more quality consultations.

Based on the analysis and recommendations of international experts, the Concept of a new model of taxpayer service for the Contact Center and service centres was developed.

But the main thing is that the EU4PFM Project provides financial support for the purchase of all the necessary equipment for the operation of a modernised Contact Centre, the renovation of which will be completed next year.

Also among the important decisions on which the EU4PFM Project is working together with the STS is an IT platform for the administration of tax disputes.

In fact, this is the development of an IT system for the automation of document flow, which will help automate the processes of administrative review of taxpayer complaints and support of tax disputes in courts. This will significantly increase the efficiency of STS employees and reduce the time for tax officials for receiving and processing any complaints and court documents.

In addition, methods have already been created to improve the consideration of tax disputes and apply the practice of the Supreme Court to new cases.

However, there is still a long way to go before tax legislation is amended to harmonise it with EU tax legislation – the EU4PFM project already has a specific vision in this area.

Yes, 2022 is a year of trials and serious tests of strength. But these trials forced the majority of Ukrainians and international partners to work harder and strive for a joint victory – in Ukraine, in reforms, in approaches, and principles. And most importantly, Ukraine is not alone on this path.

Paulius Majauskas, EU4PFM International Key Expert on Tax Reform,