On 24 July 2024, the President of Ukraine signed Law No. 11084 on the "White Business Club". This law, which amends the Tax Code of Ukraine, introduces a range of benefits and incentives for taxpayers who demonstrate a high level of voluntary compliance with tax legislation.
Key components of the Law:
- The law introduces a list of taxpayers with a high level of voluntary compliance with tax legislation. These taxpayers will benefit from several advantages in tax administration during martial law.
- The list will include legal entities and individual entrepreneurs, including residents of "Diia.City," who meet specific requirements and criteria, such as levels of tax payment and payroll.
- The list will be updated every three months and published on the official website of the State Tax Service of Ukraine on the 15th business day following its approval.
- Information about a taxpayer's inclusion in or exclusion from the list will be communicated through the taxpayer's electronic cabinet.
- Reduced number of authorised inspections and shortened time frames for conducting them.
- Expedited process for obtaining an Individual Tax Consultation. The taxpayer will be able to interact with a compliance manager using remote communication tools, including via videoconference;
- A moratorium on documentary inspections. The moratorium and reduced inspection benefits do not apply to businesses involved in the production and/or sale of excisable products, the organisation and conduct of gambling, and those providing financial and payment services
Requirements for Inclusion in the List:
- No Tax Debts. The taxpayer's tax debt or arrears on other payments, overseen by the tax authorities, must not exceed 3,000 non-taxable minimum incomes of citizens (51,000 UAH), and no more than 30 days should have passed since their occurrence.
- Unified Social Contribution (USC). No arrears (debts, fines, penalties) on the payment of USC.
- Reporting Compliance. No violations regarding the submission of reports or documents.
- Export-Import Compliance. No tax notification-decisions on violations of settlement deadlines for export-import operations in the past 12 months.
- VAT Risk Criteria. No decisions taken on the taxpayer's compliance with VAT risk criteria as determined by the Cabinet of Ministers of Ukraine.
- Legal and Business Continuity. No initiated procedures for the termination of a legal entity or business activity of a sole proprietor, and no initiated bankruptcy (insolvency) proceedings.
- No Sanctions. No decisions on the application of special economic or other restrictive measures (sanctions) to the taxpayer and/or its founders, participants, or ultimate beneficial owners under the Law of Ukraine "On Sanctions."
- Citizenship. The taxpayer and/or its founders, participants, or ultimate beneficial owners (except combatants after 14 April 2014) must not hold citizenship of a state that carries out armed aggression against Ukraine. No founders or ultimate beneficial owners with Russian citizenship.
- Economic Activities. No changes regarding the main type of economic activity recorded in the unified state register of legal entities, individual entrepreneurs, and public formations in the past 12 months.
- Additional Criteria. Diia.City. The taxpayer must meet additional criteria depending on the form of taxation and the status of being a resident of Diia.City.
The Law on the "White Business Club" aims to incentivise voluntary compliance with tax legislation by offering significant benefits to compliant taxpayers, thereby fostering a more efficient tax environment during challenging period.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.