EBA asks to withdraw bill that criminalizes VAT fraud
The European Business Association (EBA) has called on Speaker of Parliament Dmytro Razumkov and MPs to withdraw bill No. 3959-1, which passed the first reading, on the introduction of criminal liability for value-added tax (VAT) fraud, as it fears possible abuse.
"The wording of the bill, in particular, allows the initiation of criminal prosecution of the management of companies on the basis of the fact of filing an application for compensation and the decision of the tax authorities to refuse compensation before considering the dispute in court," the EBA said in a release on Monday.
Experts say that the proposed amendments to the legislation will make it possible to initiate criminal cases only on the fact that an offense has been determined by an inspection act.
"At present, the legislation provides an opportunity for administrative and judicial appeal against the documentary verification act, and the facts indicated in it cannot be considered established until all the procedures for such an act have been passed," the experts of the association say.
In their opinion, the changes proposed by the draft law will make it possible to broadly interpret the actions of taxpayers about "providing knowingly false statements" by the investigating authorities and will leave a lot of room for abuse and pressure from government agencies. A business will have to go to court to protect interests and recover VAT.
"According to the convictions of business, such norms of the draft law are contrary to the main declared directions of the government’s activities: simplification of doing business and inadmissibility of pressure on business," EBA reported.
The association also recalled attempts to introduce the corresponding norm in the law on the Bureau of Economic Security (BEB), but it was absent in the final version.