LAW OF UKRAINE

of December 21, 2000 No. 2181-III

About procedure for repayment of obligations of taxpayers to budgets and the state trust funds

This Law is the special law on the tax matters establishing procedure for repayment of obligations of legal entities or physical persons to budgets and the state trust funds on taxes and fees (obligatory payments) including collection on compulsory national pension insurance and fees on obligatory national social insurance, charges and payments of penalty fee and the penalties applied to taxpayers by monitoring bodies including for violations in the field of foreign economic activity, and determines appellate procedure of actions of bodies of collection.

This Law does not regulate also questions of repayment of the tax liabilities or collection of tax debt from persons to whom the judicial processes determined by the Law of Ukraine "About recovery of solvency of the debtor or recognition by his bankrupt" from banks on which regulations of the Section V of the Law of Ukraine "On banks and banking activity", and repayments of obligations on payment of insurance premiums for obligatory national pension insurance expatiate extend.

Article 1. Determination of terms

In this Law terms are used in the following value:

1. 1) taxpayers (taxpayers) - legal entities, their branches, departments, other separate divisions which do not have the status of the legal entity and also the physical persons having the status of subjects of business activity or not having such status to whom according to the laws the obligation is assigned to hold and/or pay taxes and fees (obligatory payments), penalty fee and penalties;

1. 2) the tax liability - the obligation of the taxpayer to pay to budgets or the state trust funds the corresponding amount of means according to the procedure and to the terms determined by this Law or other laws of Ukraine;

1. 3) tax debt (shortage) - the tax liability (taking into account penalties in case of their availability) which is independently approved by the taxpayer or approved in administrative or legal process, but not paid at the scheduled time and also the penalty fee added on the amount of such tax liability;

1. 4) penalty fee - the payment in the form of the percent added on the amount of tax debt (without penalty fee) levied from the taxpayer in connection with untimely repayment of the tax liability;

1. 5) the penalty (penalty) - payment in fixed amount or in the form of percent from the amount of the tax liability (without penalty fee and penalties), levied from the taxpayer in connection with violation by it of the rules of the taxation determined by the relevant laws;

1. 6) recovery by enforcement - the address of collection on assets of the taxpayer on account of repayment of its tax debt, without preliminary approval of its amount by such taxpayer;

1. 7) assets of the taxpayer - the money, material and non-material values belonging to legal entity or physical person on the property right or complete economic maintaining;

1. 8) card-index - the register of the settlement or executive documents sent to the servicing bank by the taxpayer or body of collection and the means which are not paid in time in connection with insufficiency on such account;

1. 9) the tax notice - the notice in writing of monitoring body on obligation of the taxpayer to pay the amount of the tax liability determined by monitoring body in the cases provided by this Law;

1. 10) the tax claim - the written requirement of tax authority to the taxpayer to extinguish the amount of tax debt;

1. 11) the tax declaration, calculation (further - the tax declaration) - the document filed by the taxpayer to monitoring body in the terms established by the legislation based on which charge and/or the tax discharge, collection (obligatory payment) is performed;

1. 12) monitoring body - state body which within the competence determined by the legislation exercises control of timeliness, reliability, completeness of charge of taxes and fees (obligatory payments) and repayment of the tax liabilities or tax debt. The exhaustive list of monitoring bodies is determined by article 2 of this Law;

1. 13) money - hryvnias or foreign currency;

1. 14) restructuring of tax debt - delay or payment by installments of payment of the tax debt which is saved up by the taxpayer as of the date established by this Law and also its partial write-off;

1. 15) tax authority - body of the State Tax Service of Ukraine; customs authority - body of the State Customs Service of Ukraine;

1. 16) body of collection - state body, authorized to perform measures for ensuring repayment of tax debt within the competence established by the laws;

1. 17) tax pledge - method of providing the tax liability of the taxpayer who is not extinguished in time. Tax pledge arises by law. Owing to tax pledge the body of collection has the right in case of failure to carry out of the tax liability provided with tax pledge to become widespread at the cost of pledged property mainly before other creditors according to the procedure, established by the law. The priority of the pawnbroker to satisfaction of requirements for pledged property is established according to the law.

1. 18) the regular price - the price determined regular by rules the established Law of Ukraine "About the taxation of profit of the companies";

1. 19) operational (bank) day - part of the working day during which documents for transfer are accepted. Days are determined for banks by workers by the rules established by the relevant resolution of the National Bank of Ukraine;

1. 20) appeal approval - approval of the tax liability according to the procedure and the terms determined by this Law by procedures of administrative or judicial appeal.

Article 2. Monitoring bodies

2.1. List of monitoring bodies

Monitoring bodies are:

2.1. 1) customs authorities - on the excise duty and the value added tax (taking into account cases when the obligation on their collection or control is assigned by the law to tax authorities), to the import and export customs duties, other taxes and fees (obligatory payments) which according to the laws are collected when importing (transfer) of goods and objects to customs area of Ukraine or export (transfer) of goods and objects from customs area of Ukraine;

2.1. 2) bodies of the Pension fund of Ukraine - to collection on compulsory national pension insurance;

2.1. 3) bodies of funds of obligatory national social insurance - on fees on obligatory national social insurance, within the competence of these bodies established by the law;

2.1. 4) tax authorities - on taxes and fees (obligatory payments) levied in budgets and the state trust funds except specified in subitems 2.1.1-2.1.3 of this Item.

2.2. Competence of monitoring bodies

2.2.1. Monitoring bodies have the right to perform checks of timeliness, reliability, completeness of charge and payment only on those taxes and fees (obligatory payments) which are carried to their competence by this Item.

The procedure for control from customs authorities of payment by taxpayers of the value added tax and excise duty is established by the joint decision of the central tax authority and central customs authority.

2.2.2. Other state bodies have no right to perform timeliness, reliability, completeness of charge and tax payment and charges (obligatory payments), including on requests of law enforcement agencies.

2.3. Bodies, authorized to perform actions for repayment of tax debt (bodies of collection)

2.3.1. Bodies, authorized to perform measures for repayment of tax debt (further - bodies of collection), exclusively tax authorities, and also the state contractors within their competence are.

Article 3. Bases for recovery by enforcement of assets and determination of budget fund

3.1. Bases for recovery by enforcement of assets of the taxpayer

3.1.1. Assets of the taxpayer can be compulsorily collected on account of repayment of its tax debt exclusively by a court decision. In other cases taxpayers independently determine priority and forms of satisfaction of claims of creditors for the asset account, free from bail bonds of debt collateral. If such taxpayer is declared bankrupt, the priority of satisfaction of claims of creditors is determined by the legislation on bankruptcy.

3.1.2. Collection of tax debt on executive texts of notaries is not allowed.

3.2. Budget fund

3.2.1. In any cases when the taxpayer according to the laws on the tax matters is authorized to hold tax, collection (obligatory payment) which assess other faces, including taxes on the income of physical persons, dividends, repatriation, value added, duties, and also any other taxes which keep from payment source, the amount of such taxes, charges (obligatory payments) is considered the budget fund belonging to the state or territorial bulk and is created from their name.

3.2.2. At the expense of the budget fund determined by the subitem

3.2.1 this Item, penalty for the reasons different from collection of such tax, collection (obligatory payment) cannot be imposed.

Article 4. Procedure for submission of the tax declaration and determination of the amount of the tax liabilities

4.1. Tax declaration

4.1.1. The taxpayer independently estimates the amount of the tax liability which specifies in the tax declaration, except the cases provided by the subitem "g" of subitem 4.2.2 of item 4. 2, and also Item 4.3 of this Article.

4.1.2. Adoption of the tax declaration is obligation of monitoring body. The tax declaration is adopted without preliminary check of the indicators specified in it through office whose status is determined by the corresponding regulatory legal act. The failure of office (official) face of monitoring body to adopt the tax declaration for any reasons or promotion of any conditions by it concerning such acceptance (including change of indicators of such declaration, reduction or cancellation of negative value of the taxation objects, amounts of budget compensations, illegal increase in the tax liabilities, etc.) is forbidden and regarded as excess of office powers by such person that attracts its disciplinary and financial responsibility according to the procedure, determined by the law.

If office (official) person of monitoring body breaks regulations of paragraph one of this subitem, the taxpayer shall direct before the expiration of deadline of submission of the declaration such declaration by mail with the inventory enclosed and the assurance of receipt which the statement addressed to the head of the relevant monitoring body constituted in any form with indication of surname of the office (official) person who refused to adopt the declaration, and/or with indication of date of such refusal joins. At the same time the declaration is considered to mail provided to the moment of its delivery, and the extreme ten-day term established for mailings by subitem 4.1. 7, it is not applied.

The taxpayer can also appeal actions of office (official) person of monitoring body for refusal in adoption of the tax declaration judicially.

Irrespective of refusal availability in adoption of the tax declaration the taxpayer shall extinguish the tax liability which is independently determined by it in such tax declaration during terms, stipulated in Item 5.3 articles 5 of this Law.

The tax statements received by monitoring body from the taxpayer as the tax declaration completed with it contrary to the rules specified in the approved procedure for its filling can be not acknowledged as such monitoring body as the tax declaration if in it obligatory details are not specified, it is not signed by the corresponding officials, is not under seal the taxpayer. In this case, if the monitoring body addresses the taxpayer with the written offer to provide the new tax declaration with the corrected indicators (with indication of the bases of rejection of previous), then such taxpayer has the right:

provide such new declaration together with payment of the corresponding penalty;

appeal the decision of tax authority according to the procedure of appeal approval.

4.1.3. If according to the rules of tax accounting determined by the laws tax statements on separate tax, collection (obligatory payment) are constituted by the accruing result, the tax declaration by results of the last tax period of year is equated to the annual tax declaration, at the same time the last is not represented.

Establishment of the forms or methods of obligatory tax statements providing submission of summary information on the separate income, expenses, privileges, other elements of tax bases which were earlier displayed in tax declarations or calculations for separate taxes, charges (obligatory payments) is not allowed if other is not established by the laws on the tax matters.

4.1.4. Tax declarations move for the basic tax (reporting) period which is equal:

a) to calendar month (including in case of payment of monthly advance installments), - within 20 calendar days following behind the last calendar day of reporting (tax) month;

b) to calendar quarter or calendar half-year (including in case of payment of quarter or semi-annual advance installments), - within 40 calendar days following behind the last calendar day of reporting (tax) quarter (half-year);

c) to calendar year, except the cases provided by the subitem "g" of subitem 4.1.4 of this Item - within 60 calendar days behind the last calendar day of accounting (tax) year;

d) to calendar year for taxpayers on the income of physical persons (the income tax from citizens), - till April 1 of the year following for reporting.

If the tax declaration in quarter, half-year, three quarters or year is calculated the accruing result based on indicators of base tax periods of which such quarter consists, half-year, three quarters or year (without advance installments) according to the relevant law on the tax matters, such declaration is submitted within the terms determined by this Item for such base tax period. For the purposes of subitem 4.1.4 of this Item it is necessary to understand the first tax period of accounting year determined by the relevant law by the tax matters, in particular calendar quarter for the purposes of the taxation of profit of the companies as the term "base tax period".

The taxpayer is exempted from obligation to represent the tax declaration for the accounting (tax) period within the current year if its tax liabilities were displayed in the annual tax declaration the current year according to the law concerning separate tax, collection (obligatory payment).

4.1.5. If the last day of term of submission of the tax declaration is the share of day off or holiday, then the operational (bank) day following for output or festive is considered last afternoon of term.

Deadlines of submission of the tax declaration can be increased by rules and on the bases, stipulated in Item 15.4 articles 15 of this Law.

4.1.6. If according to the law on questions of separate tax, collection (obligatory payment) the tax period is not established, then the tax declaration is submitted and the tax liability is paid to the terms provided by this Item for monthly base tax period except cases when submission of the declaration is not provided by such law.

4.1.7. The taxpayer has the right not later than ten days before the expiration of deadline of the submission of the declaration determined according to subitem 4.1.4 of this Item to direct the declaration (calculation) to tax authority by mail with the assurance of receipt.

In case of loss or damage of the mailing or delay of its delivery to monitoring body responsibility for non-presentation or untimely submission of the tax declaration is born by the operator of mail service according to the procedure, stipulated by the legislation, at the same time the taxpayer is exempted from any liability for non-presentation or untimely submission of such tax declaration.

The taxpayer within five working days from the date of receipt of the notification on loss or damage of the mailing shall direct by mail or, provide personally (at its choice) to monitoring body other copy of the tax declaration.

Procedure for execution of the specified mailings, and also norms of their turnover are determined by the Cabinet of Ministers of Ukraine.

Irrespective of the fact of loss or damage of such mailing or delay of its delivery the taxpayer shall pay the amount of the tax liability which is independently specified to them in such tax declaration during terms, stipulated in Item 5.3 articles 5 of this Law.

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