Legalization of Assets by One-Time (Special) Voluntary Declaration in Ukraine as an Attempt to Combine Public and Private Interests

Abstract

Purpose. Based on the analysis of the provisions of the tax legislation of Ukraine on legalization of assets by one-time (special) voluntary declaration to identify possible controversial issues, provide proposals to minimize the negative consequences for society and those who do not use these provisions. Research methods. A set of general philosophical, special legal and the latest methods of scientific research during the preparation of a scientific article was used. Among others, historical-legal, analytical-synthetic, comparative-legal, method of ascent from the abstract to the concrete and other methods were more often used, which allowed to get the results of the research. Results. The Law of Ukraine of June 15, 2021 provided a year — from September 1, 2021 to September 1, 2022 for one-time (special) voluntary declaration of assets acquired at the expense of income that was not properly taxed. The novelty of the legislation and the relations regulated by it led to the following questions: 1) «Will a person be able to extend the declaration period?»; 2) «Is it necessary to declare real estate located in the Autonomous Republic of Crimea or certain districts of Donetsk or Luhansk regions?»; 3) «Are different tax rates logically applied to assets on accounts in banks of Ukraine / in Ukraine (5 %) and in foreign banks / in other countries (9 %)?»; 4) «Why in paragraph 10 of subsection 9-4 of section XX of the Tax Code of Ukraine are chosen such numerical limits for residential (120 and 240 square meters) and non-residential (60 square meters) real estate?»; «Why is there no value characteristic in relation to real estate?»; «Why are there no references to the size and status of the settlement?»; «Why is the size of the land plot determined in this way?»; «What if a person has to transport a large family in a vehicle that can accommodate 10 or more people?»; «Is it true that the owner of one car worth 300 thousand UAH is considered to have paid the tax, and the owner of two cars worth 20 thousand UAH for both is considered that he did not pay the tax?»; 5) «How will be the calculation of human income and expenses?»; «What will be the sanctions against people whose income does not correspond to the number and value of their assets?» etc. Conclusions. It is proposed to apply a tax rate for the declaration of foreign assets at a level lower than for assets located in Ukraine, and possibly a mechanism of tax and criminal amnesty subject to the return of money and valuables to Ukraine. Top officials were advised not to give rise to questions about their valuable property in Ukraine and abroad and not to influence the independent work of law enforcement and the judiciary. To prevent social tensions, it is proposed to: adjust the number of residential real estate according to the status of the city, town, village or determine the number of residential and non-residential real estate, as well as land in monetary terms without reference to geographical and other factors. The simplest option to reduce social tension is to increase in subparagraphs 1 and 2 of paragraph 10 of subsection 9-4 of section XX of the XX Tax Code of Ukraine certain quantitative indicators at least twice and increase in subparagraph 3 of paragraph 10 of subsection 9-4 of section XX of the Tax Code of Ukraine the number of vehicles up to two or setting a monetary value of the car (cars). It is recommended that persons who will be inspected by the fiscal authorities after September 1, 2022, appeal to the latter with the requirement to take into account their own expenses and the expenses of family members at the subsistence level.