Ukrainian Law On Tax Compromise

The Law of Ukraine # 63-VIII "On Amendments to the Tax Code of Ukraine concerning the Features of Corrections to the Tax Liabilities of Corporate Income Tax and Value Added Tax in the Case of Application of the Tax Compromise" took force of 17 January 2015 (the respective law was adopted by the Supreme Council of Ukraine on 25 December 2015).

The above law introduces a regime of "tax compromise". It regulates a mechanism for adjusting tax liabilities on Corporate Income Tax (hereinafter – CIT) and Value Added Tax (hereinafter – VAT).

According to the legislation, taxpayers can voluntarily submit a corrected calculation of their tax liabilities on CIT and/or VAT for any tax periods prior to 01 April 2014 and in doing so, only a 5% of their stated tax liabilities shall be payable whilst the remaining 95% shall be deemed as settled.