Semchyk O. О. Legal regulation of the tax transparency in Ukraine
This article analysis recent changes to the Tax Code of Ukraine aimed at achieving very important targets concerning the integration of Ukraine into the European community after signing The Association Agreement with the EU. It is stated that the issue of the accumulation and usage of public funds has greatly influenced any legislation amendment recently. Taking into account current dramatic circumstances this approach is obvious, because exactly these funds should be used to protect the sovereignty of the state.
The author analyses the changes to the Tax Code of Ukraine adopted in January 2014 and underlines that such amendments should be made after a profound analysis and consideration, taking into account the devaluation of the national currency, rise in energy bills and other utilities prices, trimming of savings in foreign currencies, increase of unemployment, etc. The author came to the conclusion that the tax reform, being a positive step, should take into account the experience of European countries and implement European values into Ukrainian legislation, namely to guarantee and preserve human rights and freedoms, as stipulated by the Constitution of Ukraine.
Therefore, the issue of tax transparency draws a lot of attention nowadays, because European countries and the US make considerable efforts to create a solid legal basis for prevention and fight against tax evasions. In Ukrainian legal and financial thought the abovementioned issue has not been profoundly analyzed, instead it has been considered in terms of the principles of financial or fiscal law, and financial functions of the state. The above-mentioned term is more common for European legislation and is used in a list of the EU Directives.
Taxes as the instrument of creation of public funds have not only fiscal function but also regulatory, control, relocation, stimulation, and accumulation functions. Therefore, European approaches towards the tax transparency could be applied only if the tax burden is equalized in the legal field, taking into account all the functions of taxes. This principle is strongly related to the principle of taxation fairness, which is based on the understanding the readiness of a taxpayer to give away a part of his/her income to enable the state to perform its functions. It means that the taxpayer with a high degree of certainty will try to reduce his/her tax burden or even evade taxes if any such possibility appear.
The recent changes to the Tax Code partly were aimed to solve the problem of tax evasion by means of a tax compromise, which regulates the relations concerning the release of taxpayers from responsibility for tax evasion if they pay only some part of undeclared VAT and income taxes.
Although this could be considered as a tax amnesty from the legal point of view, such an instrument is widely used across different countries in order to increase inflows to the public funds. The author came to the conclusion that the mechanism of tax compromise adopted in Ukraine is aimed to as follows: 1) create the system of encouragement of taxpayers which will pay taxes in good faith; 2) build the preconditions for control and punishment of taxpayers, which will evade taxation; 3) secure inflows to the state treasury; 4) implement European norms in this field of Ukrainian legislation.
In general, the legislative activity in Ukraine in the field of the tax transparency should be conducted in the following directions: integration to the system of counteraction against jurisdictions which do not cooperate in order to fight tax evasion by joining the implementation of the directives of the EU related to the tax transparency; creation legal preconditions to develop cooperation with other countries in order to improve the exchange of information concerning tax payers as well as the system of tax payment in general; adherence to the principle of fair tax competition.
Key words: tax transparency, the Tax Code, tax compromise.