Is there a moratorium on tax audits during martial law?

Yes, during martial law, Ukraine has a partial moratorium on tax audits. This means that certain categories of taxpayers are exempt from audits, while others may be subject to control.

• Categories of taxpayers covered by the moratorium:
• Single tax payers of the 1st and 2nd groups: Until December 1, 2024, they will remain subject to a moratorium on all types of audits, except for liquidation audits and audits at the request of the taxpayer.
• Taxpayers in the temporarily occupied territories or in the areas of active hostilities: The moratorium is in effect.
• Categories of taxpayers not subject to the moratorium:
• Businesses engaged in the production and sale of excisable goods, organizing gambling or providing financial and payment services: They may be subject to scheduled tax audits.
• Taxpayers who meet at least one of the following criteria at the end of 2021:
• The level of payment of income tax or VAT is 50% or more percent less than in the relevant industry.
• Accounts receivable exceed accounts payable by more than two times.
• Total expenses amount to 75% or more of annual revenue (provided that annual revenue is UAH 10 million or more).
• Payroll is less than the average in the relevant industry and region.

There are also exceptions under which inspections may be conducted even in the presence of a moratorium:

• On-site audits: These audits are conducted directly at the tax authority on the basis of the taxpayer's reports and do not require a visit to the taxpayer.
• Documentary unscheduled audits: These are conducted in the following cases:
• At the request of the taxpayer: If the taxpayer initiates an audit to confirm the correctness of tax calculation and payment.
• In case of reorganization or termination of the taxpayer's activities: To verify the correctness of settlements with the budget before the end of the activity.
• In case of detection of inaccurate data in tax reporting: If the tax authority has received information about possible violations.
• In case of submission of a declaration with a negative VAT value of more than UAH 100 thousand: To verify the validity of the claimed refund.

Actual audits: Conducted to monitor compliance with the procedure for settlement transactions, turnover of excisable goods, availability of licenses and other permits.