GAAR and hybrid mismatch to be introduced in Ukraine

Ukraine is planning to implement the Directives in the field of combating tax evasion. This includes the introduction of new tools – the general rule for combating tax evasion (GAAR), and anti-hybrid rules (hybrid mismatch).

The Ministry of Finance of Ukraine, the State Tax Service of Ukraine and the EU Public Finance Management Support Programme in Ukraine (EU4PFM) have started active work in the format of working groups on the preparation of the legislative framework in the field of taxation and tax administration, necessary for joining the European Union.

Each provision of an EU legal act must be properly implemented in the national legislation of each EU member state, ensuring the same application of those tax provisions that are harmonized at the EU level.

EU tax policy includes two components: direct taxation, which remains the sole responsibility of Member States, and indirect taxation, which affects the free movement of goods and the freedom to provide services in a single market.

“The priority in the direct taxation component for us is the implementation of the Directives in the field of combating tax evasion (ATAD 1 and ATAD 2),” noted Lyudmila Palamar, Director of the Department of International Taxation of the Ministry of Finance of Ukraine. “This work involves the introduction of new tools (in particular, the general rule for combating tax evasion (GAAR), anti-hybrid rules (hybrid mismatch)).

Paulius Majauskas, EU4PFM key international expert on tax, believes that the development of legislation to implement the provisions of the ATAD 1 and ATAD 2 Directives can be carried out as early as 2023, which would allow to focus on the next steps in the euro integration process. Also, the directives in the field of combating tax evasion realize certain steps of the BEPS action plan, with an important part of them already integrated in the Ukrainian legislation.

The EU4PFM project also recommends implementing the provision of the Directive on Administrative Cooperation (DAC7) in part of automated information exchange of digital platform operators through the introduction of the OECP standard.

For the implementation of the EU Directives, the priority of their implementation in Ukraine has already been considered, and their review and comparative analysis of the compliance of Ukrainian tax legislation with the provisions of the EU Directives are being carried out.

zib.com.ua