Oleksandr Pastukhov sets out the position in relation to the submission of electronic tax returns in the Ukraine, finally made possible once the state public key infrastructure was put into place and became effective in June 2009

Pastukhov, Oleksandr

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114 Digital Evidence and Electronic Signature Law Review, Vol 7 © Pario Communications Limited, 2010For years between the adoption of the laws ‘Onthe electronic digital signature’ No. 852-IV of 22May 2003 and ‘On Electronic Documents andElectronic Document Circulation’ No. 851-IV of 22May 2003,1 Ukraine’s taxpayers have beenwaiting for the possibility to file their tax returnselectronically. The two statutes established anequivalency between, respectively, handwrittensignatures and electronic digital signatures andpaper and electronic documents, and provided fora public key infrastructure (PKI) form of electronicdigital signature. The creation of a national PKI had long remainedunfinished, however, because the certification serviceproviders and the government agency supervising theiractivities had yet to be identified. As a result, manydocuments filed with the authorities such as tax returnscould be delivered in electronic format on a physicalmedium such as a CD or floppy disk, but notelectronically, that is over an electronic communicationnetwork such as the internet. The situation was finallyremedied in June 2009, when, after the country’s PKItook shape, the State Tax Administration (STA) startedaccepting tax returns over the internet at its e-mailaddress zvit@sta.gov.ua.The most significant tax that influenced thisdevelopment was VAT, since it is a tax that is reportedon a monthly basis. Electronic returns enable the tracingof VAT compliance at a pace unheard of before. This iswhy the STA places a stress on its success inintroducing electronic filing in the context of VAT: on 8February 2010, the STA reported that 93.11 per cent ofVAT payers submitted their tax returns in electronicform.2There are 18 electronic key certification centersaccredited by the national regulator, the CentralCertification Authority of the State Committee forInformatization of Ukraine.3 At the time of writing, onlysix have concluded agreements with the STA on filingtax returns using their key certification cervices,4 andonly one of them, the Key Certification Centre of theState Employment Service,5 is authorized to certify keysused with the on-line filing of tax returns.With effect from 1 July 2009, taxpayers can also filetheir returns through an intermediary offering a numberof additional services. At the date of writing, there aretwo such intermediaries known as ‘operators ofelectronic reporting’ that have concluded agreementson cooperation with the STA: Effective InformationSystems Ltd6 and Operator of Electronic Registrationand Reporting Ltd.7 The STA has repeatedly endorsedthe filing of tax returns via such intermediaries,stressing the following advantages of tax reporting thisway:a) submitting reports to eight government agenciesthrough a ‘single counter’;b) a service that is available every day all the year;c) guaranteed express communication of tax reportsand timely delivery of receipts;d) a guarantee against unauthorized access to thereports;e) archiving receipts;f) a free set of private keys for use as an electronicdigital signature.8Although the STA has always stressed the voluntarinessBy Oleksandr PastukhovliUKRAINE:ELECTRONICFILING OF TAXRETURNSARTICLE:1 Adopted by the Verkhovna Rada of Ukraine on 23May 2003 first published in Uryadovyi Kurier(Governmental Courier) Newspaper No. 119 on 2July 2003 and in force from 1 January 2004. Bothlaws are complimentary to each other and formthe legal framework for transactions involvingelectronic signatures.2 http://www.sta.gov.ua/control/uk/publish/article?art_id=242319&cat_id=45661.3 A list of the certification centers is located here:http://www.czo.gov.ua/index.php?page=reestr.4 http://www.sta.gov.ua/control/uk/publish/article?art_id=115103&cat_id=115063.5 http://www.ca.dcz.gov.ua/.6 http://www.eis.net.ua and http://www.e-zvit.com.ua.7 http://www.zvitoperator.com.ua.8 For example, see http://www.sta.gov.ua/control/uk/publish/article?art_id=226931&cat_id=131123&showHidden=1.115© Pario Communications Limited, 2010 Digital Evidence and Electronic Signature Law Review, Vol 79 See §1 at http://zakon1.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=1087-2009-%F0&key=4/UMfPEGznhhPlI.Zi.K9uJTHI45Es80msh8Ie6.10 ‘§9. To prepare proposals to amend it’s ownregulations on deciphering other incomings andexpenses and the mandatory character ofsubmission of electronic reporting for taxpayersbelonging to large and medium businesses’ – inUkrainian athttp://search.ligazakon.ua/l_doc2.nsf/link1/KR091217.html.11 Letter dated 28.10.2009 from the Deputy Chairmanof the State Tax Administration of Ukraine (N23680/7/28-0517), available athttp://search.ligazakon.ua/l_doc2.nsf/link1/gdpi9834.html.12 See the Order of the Cabinet of Ministers ofUkraine of 27 January 2010, No. 163-2010-p, athttp://zakon1.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=163-2010-%F0.13 See http://zakon1.rada.gov.ua/cgi-bin/laws/main.cgi?nreg=163-2010-%F0.14 See Article 4, item 4.4.2., §3, ¶3, athttp://search.ligazakon.ua/l_doc2.nsf/link1/t002181.html.of electronic filing, the Ukrainian government has takenthe view that it would be worth working towardselectronic filing for everybody. To this end, the Order ofthe Cabinet of Ministers No. 1087-p of 9 September2009 envisaged the creation and “constant updating” of“electronic forms of reporting documents” on the websites of ministries and other central executive bodies.9On 14 October 2009, the Cabinet approved the NationalAction Plan on Improving Tax Administration thatinstructed the STA to draft amendments to its own by-laws by which electronic filing would be mademandatory for large and medium-sized businesses.10 On28 October 2009, the STA went as far as requiring taxreporting “exclusively through the operators ofelectronic reporting”, starting on 1 November 2009.11 Asa result of the public outcry that followed, the STAcancelled its decision on 2 November 2009.12 Order No.1087-p was amended by the Cabinet on 27 January2010, “to guarantee the acceptance of reportingdocuments according to the law in paper or electronicform”.13This recent retreat is only logical, for the ‘Law on theOrder of Clearing off the Liabilities of Taxpayers beforeBudgets and State Special-Purpose Funds’14 providesfor the voluntary filing of tax return in electronic form.Nevertheless, the next Cabinet might well try andchange the law, because the electronic format of a taxreturn makes the recording and collection of taxeseasier, faster and cheaper to assess, and is ideallysuited for verification and cross-reference. The newparliament coalition is likely to support the changes inthe law that facilitates both tax enforcement and taxcompliance.© Oleksandr Pastukhov, 2010UKRAINE: ELECTRONIC FILING OF TAX RETURNSOleksandr Pastukhov is a partner at Rogach PastukhovManoilenko, an international law firm with its headquarters inKiev, and operating through branches in the Ukraine, Belgium andthe Netherlands.http://www.rpmlex.com

Ukraine: Electronic filing of tax returns

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