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Tax Digitalization: New Directions

Ukraine is slowly but steadily pursuing digitalization, which is a very important trend. Inspired by last year's success of the chatbot for private individuals, the tax authorities have announced the launch of Taxservicebot - a new tax service that taxpayers can use via popular messengers as Telegram or Viber.

This chatbot is supposed to help taxpayers to receive information about the status of payments to the budget, registration-related and accounting-related data, notifications on the results of document processing, as well as reminders about reporting and paying taxes. Most importantly, Taxservicebot will reduce the process of paying taxes to two clicks and enable the “Single Tax” payers to pre-fill the report forms for “Single Tax” payers and receive notifications in case of tax debt. This service is being tested now, but it will be fully functional by the end of November 2020.

Besides, from November 8, 2020 onward, the “Electronic Office of Taxpayers” (hereinafter - E-office) underwent significant changes due to certain provisions of the Law of Ukraine # 786-IX of 14.07.2020 "On Amendments to the Tax Code of Ukraine Regarding Functioning of the Electronic office and Simplification of Work for Individual Entrepreneurs” which have recently entered into force:

1)  Tax notifications-decisions, tax claims, as well as other documents regarding the administration of taxes, fees, payments, tax control, inspections and reconciliations sent by the controlling body to the taxpayer are displayed in the Electronic office. This is prescribed by the amendment to paragraph 42.1 of the Tax Code of Ukraine.

2) The new norm from § 42.6 of the Tax Code allowing the taxpayer and the controlling body to share documents digitally without signing a corresponding contract has also entered into force. This is the way it will work in practice:

  • The taxpayer’s director will make (and change, if necessary) a list of authorized persons who shall have the right to sign, submit, receive documents and information via the E-office on behalf of the taxpayer;
  • The State Tax Service will provide the E-office with the option for the taxpayer to select and change the authorized persons who have the right to use the E-office, in particular in terms of signing, submitting, receiving documents and data via the E-office, and to determine their formal power.

The taxpayer will legally become subject to electronic document management procedure upon sending the first electronic document (any document) to the supervisory authority via the E-office in the prescribed format.

Paragraphs 4 and 5 of §49.4 of the Tax Code of Ukraine have been canceled. These paragraphs had stated that:

  • if the Contract on Recognition of Electronic Documents is terminated due to reasons prescribed by the law, the taxpayer has the right to submit tax reports in writing before a new contract is concluded;
  • regulatory authorities are prohibited from unilaterally terminating the Contract on Recognition of Electronic Documents.

Therefore, all mentions of this Contract have been removed from the Tax Code of Ukraine, and it has been obsolete since November 8.

However, the Ministry of Finance of Ukraine has yet to approve the Procedure for electronic document exchange between the taxpayer and the supervisory authority, which will comply with the above changes. That is, there is a chance that new requirements and provisions will be established.

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