Anna Vinnichenko conducted a workshop for business “Taxes Minimization, Optimization & Planning by Legal Means”.

By the invitation of the Business Club, Managing Partner of Attorneys at law WinnerLex Anna Vinnychenko once again became the speaker of the seminar “MINIMIZATION, OPTIMIZATION, TAX PLANNING WITH LEGAL METHODS”.

The lecture materials were addressed to the audience of practical accountants, financiers and business leaders.

In her speech, Anna Alexandrivna provided substantive practical recommendations, referring to the cases of WinnerLex law practice and the decisions made by the Supreme Court.  The main topic of the seminar was the innovations in the State Tax Service of Ukraine in 2021. 

The first block of the speech was entirely devoted to minimizing the tax risks of enterprises and practical advices in order to achieve the desired legal results in specific situations. And in the second block of the seminar, the participants studied a detailed analysis of innovations in the implementation of tax control from the State Tax Service of Ukraine. 

Anna Alexandrivna’s seminars are always an opportunity for live communication between the speaker and the audience. Therefore, all those present in the hall, as well as participants of the online broadcast, had the opportunity to ask their own questions to the speaker in the chat, take part in a live discussion and get thorough answers from Anna Alexandrivna.

Full lecture program: Risk minimization and updated tax control

BLOCK 1: Minimization of risks

1. TAX AVOIDANCE SCHEMES IN 2021:
   • Typology of “doubtful” schemes (practice of the State Tax Service, SCFM).
   • The most common tax evasion schemes from the point of view of taxpayers as risk factors for business.
   • Invalidity of contracts: court practice.
   • Unreal and non-commodity transactions. How do fiscal officials reflect unrealistic business transactions in inspection reports?
   • Why each link in the scheme must meet all the characteristics of an independent entity?
   • Problems of proving the reality of business transactions to counteract the blocking of tax invoices, recognition of the enterprise as risky and / or establishment in the Act checks on transactions as unreal / fictitious / non-commodity.
2. HOW TO IDENTIFY RISKS OF BUSINESS OPERATIONS?:
   • How the State Tax Service monitors tax optimization schemes and the work of optimization companies.
   • The software package “tax block” — the work of your company in the palm of your hand
   • Blocking operations fin. Bank monitoring.
   • Beneficiary criteria.
   • What is proper (sufficient) tax prudence and what does the court pay attention to.
3. RISKY OPERATIONS:
   • Goods (services) received free of charge from an unknown source as a well-known argument of the tax authorities.
   • Risks of financial assistance for single taxpayers and counteraction to illegal revocation of the EP payer’s certificate.
4. STATUS OF RISK TAXPAYER:
   • Proving the illegality of assigning status in pre-trial and court proceedings.
5. JUSTIFICATION OF BUSINESS TRANSACTIONS:
   • Substantiation of economic reasons or business purpose (regardless of the risks of entrepreneurial activity) when concluding agreements at a price lower than the production cost.
   • Application of the sign of reasonable economic reason (business purpose) to operations for the provision of non-repayable financial assistance for the purpose of corporate income tax to residents and non-residents.
   • The presence or absence of individual documents, as well as shortcomings in their design, as a possible basis for the conclusion of the absence of business transactions and refusal to form a tax credit.
   • Indicative list of documents required to confirm business transactions for delivery and contracting.
6. AGREEMENTS AND PRIMARY DOCUMENTS:
   • What to consider in contracts with counterparties to minimize tax risks.
   • Proper execution of documents. Errors that led to distortion of financial results, taxes, legitimacy of transactions.
7. CONTRACTORS
   • Self-examination of the counterparty for risk: how to conduct it and why it is needed.
8. CASH SETTLEMENTS
   • Restrictions on transactions.
   • Operations in FOP: what requires to be changed in the work with the received revenue.
   • Cash transactions under control.
9. CASHLESS CALCULATIONS
   • Which settlement operations are not subject to innovations / restrictions?
   • What is “pre-verification”? How is it carried out?
   • Card-to-card transfers and new restrictions. When will they start controlling?
   • Letter of the NBU “Recommendations on signs of risky transactions”.
10. RELATIONS “SINGLE TAX — ENTERPRISE”.
    • Relationships with entrepreneurs (including with single taxpayers):
    • With which single taxpayers can an ordinary enterprise cooperate. Should the company check the activities of the single taxpayer and what are the risks in detecting “deviations”
    • Relationships with entrepreneurs acting as a “layer” between the company and the non-resident.
    • Recent legislative changes that eliminate the convenient scheme of work.
    • Risky operations. Which transactions with single taxpayers can be classified as “risky”. The main claims from the tax authorities.
    • Regular economic relations with entrepreneurs. The risks that such a relationship may be equated to an employment relationship.

BLOCK 2. TAX CONTROL: Innovations of 2021

1. Update mechanisms for tax control:
   • Tax offenses and control.
   • Responsibility of tax officials and the power to establish the guilt of taxpayers in the acts of inspections.
2. How does the traffic police choose a victim and how not to get on the schedule? (Order of the Ministry of Finance №723):
   • The procedure for forming a plan-schedule for conducting documentary scheduled inspections of taxpayers and the legality of changes.
   • Criteria for selection of taxpayers – legal entities of high risk.
3. COMPREHENSIVE CONTROL OF VAT TAX RISKS:
   • The position of the Supreme Court: Criteria for risk payers (SFS letter) were declared illegal.
4. BUREAU OF ECONOMIC SECURITY (BEB):
   • Liability for VAT fraud as a separate type of criminal offense

     (theft or illegal misappropriation of budget funds, obtaining budget compensation).

5. LAW “ON PREVENTION AND COMBATING OF LEGALIZATION (LAUNDERING) OF INCOME…” and its organizational and accounting consequences:
6. TAX CHECKS. Appeal against the results.:
   • How to legally prevent the inspection and to get under the seizure of assets.
   • Consequences of non-admission to the tax audit.
   • Competent analysis of the grounds for inquiries: when it is possible to legally correct and without consequences for management to avoid verification..
   • How to legally refuse to provide information and documents and when not to do so.
   • 7 principles of proper inspection.
   • Comprehensive inspections and the procedure for refusing to conduct them.
   • Tax act: whether to write an appeal.
   • Tax notification-decision (PPR): methods of appeal.
   • PPR Administrative Appeal: Is It Time? Judicial appeal.
   • Differences between the correct appeal of the test results and the incorrect one.
   • The role of the accountant in appealing the decisions of fiscal authorities.
   • Interrogation report (explanation) of the director / founder of the contractor, reference of the State Tax Service to verdicts / materials of criminal proceedings as a negative aspect of the PPR appeal.
   • Judicial, appellate, tax practice on controversial issues: costs, tax credit (PC) … Mistakes of payers.
   • Moratorium on business inspections during quarantine.
7. SURVEY / INTERROGATION OF TAXPAYERS:
   • A list of the most frequently asked questions by taxpayers of officials and founders of business entities that have been involved in tax evasion schemes.
   • Thirty-six frequent questions of the investigator during the interrogation in the criminal tax case: elaboration of the correct answers.
8. INSPECTIONS OF STATE LABOR:
   • Risk criteria for inspections of the State Labor Inspectorate (grounds for conducting inspection visits and organizing on-site inspections).
   • Risks of mass control measures to identify undocumented workers during quarantine.
   • Signs of the existence of labor relations and the problem of reclassification of GCC contracts into employment contracts
   • Grounds for non-admission to the inspection of the State Labor Inspectorate.
   • The procedure for appealing the order of the State Labor.
9. RESPONSIBILITY FOR VIOLATION OF LABOR LAW:
   • Criminal liability for violation of labor legislation.
   • Circumstances that release from financial liability for committing tax offenses and violations of other legislation.

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