02 December 2010, 16:54
The motions state that the Tax Code of Ukraine adopted on 18 November 2010 bears serious risks that may restrict the citizen´s rights and liberties protected by the Constitution of Ukraine.
The President of Ukraine is convinced that the Code violates the constitutional principle of assumption of innocence. Namely, it neglects assumption of innocence of an individual and exemption from proving own case fixed in artcile 62 of the Constitution of Ukraine. Thus, if a tax payer appeals in administrative order against any decision of the tax authority, the burden of the decision disproving is laid upon the tax payer (item 56.4 clause 56).
According to the President of Ukraine, such an approach is unacceptable in the democratic society and shall be amended.
The Code enables accusation of tax evasion in the result of the inspection, even if the tax payer appeals against the lawfulness of such investigation in court. In the applicable legislation, the effective procedure of the tax and charges administration provides relevant guarantees.
Thus, the Tax Code restricts existing rights of the citizens and does not correspond the constitutional prohibition on restriction of existing rights of citizens in the result of adoption of new laws (article 22 of the Constitution of Ukraine). It violates the right to appeal to court against the activity or non-activity of the state authority bodies, officials and high-ranking officials (clause 55) that can not be restricted pursuant to the Constitution of Ukraine (article 64).
Thus, the President suggests supplementing Paragraph IV "Tax and/or Pecuniary Obligations of Tax Payers, Order of their Settlement and Appeals against the Supervisory Bodies" of Chapter IІ "Administration of Taxes, Duties (Compulsory Charges)" of the Code by the following statements:
If the tax payer appeals against the decision of the tax body in court, the supervisory body can not accuse the tax payer of tax evasion until the final judgment of the court is passed. This rule is not extended on the cases when the accusation is based not only on the resolution of the supervisory body, but also on extra evidence meeting the requirements of the Code of Criminal Proceedings of Ukraine.
"Institution of proceedings against the tax payer or their personnel is not regarded as a ground for the termination of the proceedings in case of denial in scrutiny of a tax payer´s complain submitted to court within the appeal proceedings."
The President believes that the Code shall oblige the heads of the supervisory bodies to issue an order on the in-house audit and the in-house review, and provide the tax payer with the copies of the order.
The President supposes that the Code changes the legal regime of a simplified taxation, registration and accountability of the small business entities.
Altering application of the simplified taxation system, the Code fails to guarantee the protection of the individuals single tax payers in the transitional period.
To alleviate these risks, the President deems necessary to keep the applicable legal regime of a simplified taxation, registration and accountability of the small business entities.
Under the act, the Decree of the President of Ukraine of 3 July 1998 No. 727 "On the legal regime of a simplified taxation, registration and accountability of the small business entities" (with successive amendments) and paragraphs 6-28 of item 1 of clause 14 of chapter IV of the Decree of the Cabinet of Ministers of Ukraine of 26 December 1992 No. 1392 "On Individual Income Tax" shall be applied with account for the following specificities since 1 January 2011 by the introduction of amendments to Chapter XIV of the Tax Code of Ukraine in part of taxation of small business entities:
single tax payers shall not pay the following taxes and dues fixed by the Tax Code of Ukraine:
enterprise income tax;
individual income tax (for sole proprietors);
value added tax on the operations on delivery of goods and services, if they are to be rendered in the customs territory of Ukraine, except of the value added tax payable by the legal entities that opted for a six-per-cent tax rate;
land tax, except of the land tax on the land plots not used for business;
the charge for the use of mineral resources;
the charge for the special water use;
the charge for the special use of forest resources;
the charge for conduction of several types of business activity;
calculation, administration and payment of a single state social insurance fee is payable by the small business entities entitled to a single tax under the Decree of the President of Ukraine of 3 July 1998 No. 727 "On the legal regime of a simplified taxation, registration and accountability of the small business entities" (with successive amendments) and paragraphs 6-28 of item 1 of clause 14 of chapter IV of the Decree of the Cabinet of Ministers of Ukraine of 26 December 1992 No. 1392 "On Individual Income Tax", in the order fixed by the Law "On Administration and Registration of a Single State Social Insurance Fee";
single tax or fixed tax is payable to the account of a respective budget as a part of a single tax or a fixed tax payable to these budgets under the Decree of the President of Ukraine of 3 July 1998 No. 727 "On the legal regime of a simplified taxation, registration and accountability of the small business entities" (with successive amendments) and paragraphs 6-28 of item 1 of clause 14 of chapter IV of the Decree of the Cabinet of Ministers of Ukraine of 26 December 1992 No. 1392 "On Individual Income Tax" (except of a single tax payable in January 2011 for the last fiscal (accountable) period of 2010). The State Treasury of Ukraine does not distribute the funds of a single tax or a fixed tax to the single state social insurance fund and\or the Pension Fund of Ukraine;
single tax payable in January 2011 for the last fiscal (accountable) period of 2010 is placed in the budgets and single state social insurance funds (including the retirement insurance) on the terms and under the conditions effective by 1 January 2011;
the sums of a single tax or a fixed tax paid by 1 January 2011 by mistake or in excess are returned to the tax payers, and the sums of reimbursement of the tax arrears as of 31 December 2010 are placed to the account on the terms fixed with account for this section."
The President of Ukraine submitted his motions to other provisions of the Tax Code.
The draft is registered under Reg. No. 7101-1.