Publication date: 13.07.2024
Tax law: legal aspects, regulations and practical recommendations
Tax law is one of the most important branches of law that regulates relations between the state and taxpayers in order to ensure budget revenues and finance state needs. In this article, we will review the main legal aspects of tax law, the regulatory framework in Ukraine, and provide practical recommendations for taxpayers.
Key legal aspects of tax law
Tax law encompasses a wide range of legal provisions governing the imposition, calculation and payment of taxes, as well as liability for violations of tax laws. The main legal aspects include:
Establishment oftaxes and duties:
- Taxes and duties are established by the legislative bodies of a state on the basis of tax legislation.
Calculation oftaxes:
- Determination of the tax base, tax rates and the procedure for calculating tax liabilities.
Payment of taxes:
- The procedure and timing of tax payments, advance payments, tax discounts and exemptions.
Tax control:
- Conducting tax audits, monitoring compliance with tax laws, detecting and preventing tax offences.
Liability for violations of tax laws:
- Sanctions and fines for failure to file tax returns, non-payment of taxes, understatement of tax liabilities and other violations.
Legal and regulatory framework of tax law in Ukraine
The tax law in Ukraine is governed by a number of laws and regulations that establish the legal framework for tax relations. The main legal acts include:
TheConstitution of Ukraine:
- Establishes the basic principles of taxation, including the principle of equality and fairness of taxation, and the obligation of citizens to pay taxes.
Tax Code of Ukraine:
- The main legal act regulating tax relations in Ukraine, including the establishment of taxes, calculation of tax liabilities, payment of taxes, tax control and liability for tax offences.
TheBudget Code of Ukraine:
- Regulates the formation and execution of the budget, including revenues from taxes and fees.
Laws of Ukraine on certain types of taxes and duties:
- Establish the legal framework for certain types of taxes, including personal income tax, corporate income tax, value added tax, excise tax and others.
Resolutions of the Cabinet of Ministers of Ukraine and orders of the Ministry of Finance of Ukraine:
- Regulate specific aspects of tax relations, including the procedure for filing tax returns, conducting tax audits, and tax administration.
Main types of taxes in Ukraine
The Ukrainian tax legislation provides for several main types of taxes, each of which has its own specifics of calculation and payment. The main types of taxes include:
Personalincome tax (PIT):
- PIT is paid by individuals on income derived from various sources, including wages, salaries, entrepreneurial activity, sale of property, dividends and other income.
Corporate income tax:
- Paid by legal entities on profits earned from business activities. It is calculated as the difference between the company's income and expenses.
Value added tax (VAT):
- Paid on the added value of goods and services at each stage of production and sale. The VAT rate in Ukraine is 20%.
Excise tax:
- Imposed on certain types of goods, including alcoholic beverages, tobacco products, petroleum products, and cars. The excise tax rates are set separately for each type of goods.
Local taxes and duties:
- Includes property tax, single tax for small businesses, tourist tax and other taxes imposed by local governments.
Rights and obligations of taxpayers
Taxpayers have a number of rights and obligations set out in the tax legislation. The main rights and obligations of taxpayers include the following:
Taxpayer rights:
- Receive information on taxes and duties, the procedure for their calculation and payment.
- Submit tax returns, calculations and other documents to the tax authorities.
- Appeal against decisions of the tax authorities in case of disagreement with them.
- Receive refunds of overpaid taxes and duties.
Responsibilities oftaxpayers:
- Submit tax returns and calculations to the tax authorities in a timely manner.
- Pay the taxes and duties due in a timely manner.
- Keep records of income and expenses necessary for the calculation of tax liabilities.
- Provide the tax authorities with documents and information required for tax control.
Tax control
Tax control is an important element of the tax system aimed at ensuring compliance with tax legislation and detecting tax offences. The main types of tax control include:
In-houseaudits:
- Carried out by the tax authorities on the basis of tax returns, calculations and other documents submitted by taxpayers.
Documentary audits:
- Carried out on the basis of accounting documents and other documents confirming tax liabilities of taxpayers. Documentary audits may be scheduled or unscheduled.
Actual audits:
- Carried out at the taxpayer's place of business to check the availability of inventory, cash, compliance with the payment procedure and other issues.
Electronic control:
- Carried out on the basis of electronic accounting and reporting data submitted by taxpayers to the tax authorities.
Liability for violations of tax legislation
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