Inclusion in the schedule of tax audits during martial law: What should businesses consider?


  1. Preparing for the audit
  2. Admission to the audit
  3. Actions during and after the audit
  4. Appealing against the results of the audit

On 1 August 2023, the Law of Ukraine No. 3219 “On Amendments to the Tax Code of Ukraine and Other Laws of Ukraine on Peculiarities of Taxation during the Period of Martial Law” (hereinafter – the “Law“) came into force.

The Law, inter alia, restores documentary tax audits for certain taxpayers. It is worth reminding that before the above date, conducting this type of audits was completely prohibited during the martial law in Ukraine.

In this regard, the Law stipulates that starting from 1 August 2023 and until the termination or cancellation of martial law in Ukraine, only those taxpayers may be included in the schedule of documentary scheduled tax audits who:

  • carry out activities in the field of production and/or sale of excisable goods;
  • carry out activities in the field of organizing and conducting gambling in Ukraine (gambling business);
  • provide financial and payment services.

The Law suspends the provisions of the Tax Code of Ukraine on the specifics of the formation of the schedule and amendments thereto. It is allowed to make changes to the schedule monthly, taking into account, in particular, force majeure circumstances, the presence or absence of safe conditions for the audit. It is also envisaged that the updated schedule will be published on the official website of the State Tax Service of Ukraine no later than the last day of the month in which the updated version was approved, and the scheduled audit of the relevant taxpayers may be conducted after 30 calendar days following the date of publication of the updated schedule

Thus, it is now possible to conduct documentary scheduled tax audits, but only of the above-listed taxpayers.

In this regard, if a business entity carries out the activities described above before the termination of martial law in Ukraine, it is advisable to constantly check the changes to the schedule, as if included in it, a documentary scheduled tax audit (hereinafter the “audit“) may begin as early as 30 calendar days after the publication of the new schedule. 

Also, it should be noted, that there are certain legislative initiatives to fully lift the restrictions on carrying out scheduled tax audits introduced due to martial law. Thus, in case the respective legislative changes come into force, the issue of scheduled tax audits will be relevant for a much wider range of taxpayers.

If a taxpayer is included in the schedule, it is very important to prepare for a possible audit in advance and take into account the following. 

Preparing for the audit

Another important aspect to successfully pass tax audits is the internal tax audit, which enables the taxpayer to identify and, if possible, prevent tax offenses.

To prepare for a potential audit, the taxpayer should do, inter alia, the following:

  • check the availability of full documentation of business transactions for the period subject to tax audit, in particular, primary accounting documents on business transactions, other documentation on the progress of business transactions and their results (if such documentation is required for the specific cooperation with the counterparty);
  • check the correctness of filling in such documents (in particular, the availability of mandatory details for the primary document, compliance of the content of other documentation on the transaction with its essence and requirements, etc.), the correctness of the reflection of past business transactions in accounting;
  • check the correctness of the declared tax liabilities for the relevant period, as well as the correctness and timeliness of their payment, and, if necessary, submit clarifying calculations;
  • check the availability of evidence of compliance with the “due diligence” principle before cooperating with counterparties that had the status of risky (if such cooperation was in the period under review);
  • check the justification of the business purpose in business transactions, where relevant.

It should be noted that the tax authorities usually pay special attention to transactions with risky counterparties, non-residents, provision of certain categories of services (e.g. marketing, information, consulting), and performance of works.

Admission to the audit

Taxpayers sometimes hesitate whether to allow tax officials to conduct an audit due to doubts about its legality or failure to provide taxpayers with the documents required by tax legislation on the planned audit within the established timeframe.

Thus, the Tax Code of Ukraine stipulates that officials of the tax authority have the right to initiate an audit if there are grounds for such an audit, as well as if the following conditions are met

  • sending (delivering) a copy of the order to conduct the audit and a written notice (which must contain the details specified by law) indicating the date of commencement of such audit to the taxpayer no later than 10 calendar days before the day of the audit;
  • sending or presenting a referral to such an audit (with the relevant details);
  • presentation of the official IDs of the persons specified in the referral for the audit before its commencement.

Failure to submit or send the said documents to the taxpayer or submission of such documents in violation of the requirements for their draw-up is a ground for preventing officials of the tax authority from conducting the audit.

It should be remembered that if a taxpayer decides not to allow an audit, regardless of the reasons, the tax authority has the right to initiate an administrative arrest of the taxpayer’s property and funds

Previously, taxpayers tried to prevent such arrest by challenging the tax audit order in court, which was recognized in court practice as a dispute of law. Taking into account the existence of a dispute of law, the courts refused to open proceedings against the tax authorities on their applications for seizure. 

However, on 23 February 2023, the Supreme Court issued a ruling in case No. 640/17091/21, which formed a new legal position on the seizure of taxpayers’ property. In particular, the court determined that the taxpayer’s objection to the legality of a tax audit, expressed in the form of challenging the relevant order to conduct it or the actions of the tax authority during the audit, cannot be considered a “dispute of law”.

Given the above, the fact that a taxpayer has filed a lawsuit to challenge an audit order does not guarantee its protection against the imposition of administrative arrest of property.

Therefore, before deciding to prevent the tax authority from conducting an audit, it is necessary to weigh all the risks for the taxpayer.

Actions during and after the audit

It should be noted that it is advisable to stick to the following during the audit and after its completion:

  • to draw up an inventory listing all copies of documents provided to the tax authority representative, and to certify such copies appropriately. It is worth remembering that the taxpayer is obliged to provide only documents related to the subject of the audit
  • to communicate with representatives of the tax authority in writing, if possible. In other words, provide written responses to requests for documents or explanations and record the sending/personal delivery of such responses; 
  • not to avoid signing the audit report in case of disagreement with its conclusions, but instead to submit objections to the audit report, and, if necessary — additional explanations and documents. The additional explanations and documents provided by the taxpayer should be taken into account by the tax authority when considering the objections.

Appealing against the results of the audit

If the tax audit reveals certain violations of tax legislation and subsequently issues tax notice-decisions (TNDs), they may be appealed in administrative (out-of-court) and litigation proceedings

Under the administrative appeal procedure, the complaint must be filed with a higher-level tax authority within 10 business days following the day of receipt of the TND.

Also, at the stage of administrative appeal, a GR strategy may be appropriate along with filing a complaint. It is a set of measures related to the taxpayer’s appeal to the state authorities and other structures, which, within their powers, may submit their own explanations and objections to the TND that are the subject of the taxpayer’s complaint and participate in its consideration, which will further facilitate the issuance of a legitimate and reasoned decision based on the results of the complaint. At the same time, it should be noted that the GR strategy is individual: the recommendation for its application and the approach to its development always depend on the circumstances of a particular tax dispute. 

In case the taxpayer’s complaint is not satisfied within the administrative appeal, the taxpayer may appeal the decision to the court within a month following the day of the end of the administrative appeal procedure.

However, a taxpayer may appeal a TND directly to the court without using the administrative appeal procedure. In this case, the time limit for filing a claim with the court is 6 months.

It should be pointed out that, despite the rather long period for filing a lawsuit, the appeal should not be postponed until the last moment. In case of delay, by the time the court appeal is initiated, the tax liability may have already acquired the status of an approved one, which may result in the tax authority having a tax pledge over the taxpayer’s property, which is likely to significantly interfere with the taxpayer’s business activities for some time. 

GOLAW has significant experience in:

  • providing legal support during the internal tax audit of the taxpayer as a preparation for the audit;
  • providing assistance during tax audits;
  • appealing against the results of tax audits. 

GOLAW specialists will be able to quickly and efficiently analyze the circumstances of the audit and the taxpayer’s business transactions for compliance with tax legislation, provide appropriate recommendations, formulate a legal position to file objections to the audit report and appeal the tax notice-decision, prepare objections and all necessary documents for appealing the tax notice-decision, both in administrative and court proceedings and develop a GR strategy depending on the circumstances of a particular situation.

Viktoriia Bublichenko

Viktoriia Bublichenko

Partner, Head of Tax, Restructuring, Claims and Recoveries practice, Attorney at law

Tetiana Fedorenko

Tetiana Fedorenko

Senior Associate, Attorney at law

Practices | Sectors


Related insights

GOLAW’s work in the energy and natural resources sector

11 June 2024 Energy Alert

GOLAW’s work in the energy and natural resources sector

The current state of the Ukrainian energy sector

06 June 2024 Energy Alert

The current state of the Ukrainian energy sector

May news digest

04 June 2024 Publication

May news digest

View all

We use cookies to improve performance of our website and your user experience.
Cookies policy Cookies settings

Please read the provisions of the privacy policy and the processing of personal data carefully Cookies policy.

I consent to the processing of personal data in accordance with the privacy policy and the processing of personal data

I want to receive a mailing

We use cookies to improve performance of our website and your user experience. Cookies policy Hide settings

Thank you for your trust!

Your request for a consultation has been received, and our experts will be in touch with you shortly.

Go to main page
Thank you for subscribing to our newsletter!

Going forward, you will remain informed about the latest and most significant legislative updates, expert publications, and forthcoming event announcements.

Go to main page