PROBLEMS OF THE REFORMING THE UKRAINE’S FISCAL-TAX SYSTEM IN CONTEXT OF DE-OFFSHORIZATION

Abstract

The peculiarities of implementation of the Minimum Standard of the BEPS Action Plan in Ukraine, the MLI Multilateral Convention, which provides for separate actions of the BEPS Action Plan, taxation rules of controlled foreign companies (CFC) as well as rules for automatic exchange of information under the CRS standard, are investigated. It was found that rising the effectiveness of existing Ukrainian fiscal-tax system according the de-offshorization of the national economy, double tax treaties with offshore jurisdictions is only possible under the OECD criteria for information transparency of the Ukrainian tax system. The article analyzes the implementation of the concept of CFC into national legislation in connection with the objective need to eliminate the negative consequences of using business offshore schemes. The relationship between national tax and international tax law principles is analyzed on the basis of the ratio of CFC rules, both to the provisions of international tax agreements and to the norms of international legal restrictions. The levels of development of national tax and financial instruments were determined on the basis of international methodological and regulatory approaches to determining the balance between liberalization of national capital markets and systemic financial risks, between optimizing the economic tools for controlling taxation of residents and attracting foreign investors and capital owners, are investigated too. The article analyzes the conditions under which the CFCs are exempt from profit taxation when double taxation treaties are concluding, ensuring timely and complete exchange of tax and financial information between the national fiscal departments. The ways that Ukrainian companies use in low tax zones to restructure their businesses and protect their assets that are not declared in Ukraine are identified. It is about the endorsement by Ukraine of the double taxation treaties for «double tax evasion» (in fact, they do not pay taxes in any of the jurisdictions). The peculiarities of the implementation of the CFC rules as a fiscal component (budget replenishment) and as a regulatory tool to protect and encourage inward investment are investigated separately. Particular attention was paid to the problem of ensuring business security in the context of confidentiality and protection of information while sharing it with other countries in the process of implementing the BEPS plan. It is proved that today the new standards of compliance with the requirements of financial motivate Ukrainian beneficiaries of foreign companies to conduct business under more transparent rules (including the protection of confidentiality of the received information), identify and strengthen weaknesses of business models.