Development of tax strategy at the stage of entering the market of Ukraine:
- Analysis of future investment (production, economic) activity.
- Analysis, modeling and assessment of tax and financial risks that may arise in business and corporate officials in any relationship with tax authorities (including any dispute, additional charges, tax accounting space, etc.).
- Providing recommendations, conclusions within the framework of the tax strategy and business policy approved by the client in Ukraine.
- Development of the tax strategy of the future investment (production, economic) activity considering the structure of doing business, sphere, and specificity of the project.
- Realization of the tax strategy and protection of interests of the company (and officials) at any stage of communication with tax authorities.
The main mistakes business makes at the stage of entering the market of Ukraine:
- Does not carry out thorough preparation for entering the market of Ukraine.
- Does not analyze, model, or assess tax and financial risks that may arise from business and government officials in any relationship with tax authorities.
- Does not monitor or conduct compliance of counterparties, neither tracks the transfer of the counterparty to the category “risky“.
- There is no monitoring and modeling of risks related to tax charges with regards to different types of activity.
- The company’s tax strategies and policies are based on legal and (or accounting) errors that can lead to tax deductions.
Conducting inspections – both planned and unplanned – is an integral part of ordinary business activity in Ukraine. Tax and tax calculations, blocking tax bills, tax audits in connection with VAT claimed for refund, are just some of the problems faced by companies almost every day.
In 70% of enterprises, the result of the tax audit is the detection of violations of tax legislation and the inclusion of additional tax payments to businesses, or the refusal to refund VAT.
It is clear that the company must prepare carefully before the scheduled tax inspection, from the moment it becomes known that the company is included in the list of scheduled inspections.
However, it is quite difficult to be ready for an unscheduled inspection.
Which companies are in the risk zone of unscheduled inspections:
- The company that is placed in the category of large payers.
- A significant amount of VAT is systematically declared and announced for refund.
- The company is a large taxpayer, but pays to the budget insignificant amounts of income tax at large volumes of business activity.
- The company’s contractors are placed in the “risky” category.
- Planned or unscheduled inspection of contractors is carried out.
The main mistakes that business makes during business activity and tax audits:
- Does not carry out thorough preparation for planned (unscheduled) inspections.
- Does not monitor and compliance of counterparties, do not track the transfer of the counterparty to the category “risky“.
- There is no or weak compliance and diligence procedure at the enterprise, no verification is carried out and no evidence is collected regarding the diligence of contractors.
- There is no monitoring and modeling of tax risks for various transactions.
- The company has purely legal (because accounting) errors that lead to tax deductions.
What losses the business will suffer:
- Blocking of the company’s business activities
- Possible losses of market share and clients.
55% of the negative consequences related with unscheduled tax audits are the company’s own mistakes and its unpreparedness for tax audits.
75% of the negative consequences linked with planned tax audits are the company’s own mistakes and its unpreparedness for planned tax audits.
How to minimize possible losses during business activity or during tax audits
Our proposal on minimization of possible charges and losses:
- Development of individual step-by-step strategy, execution of a complex protection of the company in relations with tax authorities.
- Modeling, calculation, and assessment of risks (financial, legal, reputational) that emerge in business and their officials, in any relationship with tax authorities (including any controversial issues, additional charges, blocking of tax bills, refusal to reimburse VAT, transfer to another place for tax accounting, etc.).
- Providing recommendations and conclusions – both within the framework of tax audits that were already started and those that are still in plan.
- Realization of the strategy and protection of interests of the company (and officials) at any stage of communication with tax authorities.
Audit of contractors, audit of business activity, preparation for planned tax audit
- Advice on tax legislation, drafting legal conclusions, recommendations, analysis and modeling of tax risk for tax payments.
- Assessment of tax risks in business transactions, advising on tax optimization and tax structuring.
- Preparation of the company for planned tax audits, modeling and minimization of tax charges risks. Correction of errors.
Support of tax audit
The decision of the tax authority and its conclusions, regarding the existence or absence of violations of the tax legislation, and the amount of actual tax documents are assessed based on the quality support. Namely, during the tax inspection. Thus, the taxpayer’s correct position depends on the reduction of risks regarding possible additional charges from the tax side, since the whole situation of the company’s activity is formed at the stage of an audit, not in the court.
What are we doing during the tax audit for companies:
- Analysis of financial and economic documentation.
- Analysis of the grounds for conducting inspections, providing recommendations.
- Audit of tax risks and recommendations on their minimization.
- Formation of a position on tax inquiries, taking into account the risks of possible additional charges and criminal processes.
- Fixing tax violations, bringing guilty persons to justice.
- Appeal of tax actions during the audit.
- Formation of a position and preparation of the list on inspection acts.