Business is a sneaks ruthless policy hostage

21.11.2016 Analytics

The policy of GFS of Ukraine, directed to the problem resolution of central government budget deficit doesn’t promote business development at all. Entrepreneurs ring the alarm bells!

Despite the moratorium of business checks conducting , the expiring year has remembered by just improbable actions activation of the Public fiscal service of Ukraine.

From practice

As it happens in Ukraine very often, using opportunities of the Criminal Procedure Code, the criminal proceedings often begin with nonexistent (in other words is “far-fetched”) the basis. For example, recently there were “fashionable” accusations of legal entities in the relations with the so-called “dummy” entities which actually successfully are engaged in business activity.

As a rule, based on the research opinion which, in turn, establishes an only probability of tax avoidance the detective person of law enforcement agency constitutes the far-fetched official report. This document allows the official of law enforcement agencies to enter data in the Unified register of prejudicial investigations on allegedly committed crime.

This fact, certainly, allows law-enforcement authorities to get the access to accounts, the commercial information and documents of the entity, and also the right to withdrawal of documents and property attachment and accounts of the same company.

Usually, everything begins done to death: an established fact of violation by the official of a certain company of requirements of the tax legislation, for example, not additional accrual or failure paying taxes to the budget in especially large sizes.The check which is the following step, of course, establishes that the company (for example, Ltd company) in the case of implementation of financial and economic activities uses financial transactions with SEA that has signs of “fictitiousness” to minimise the tax liabilities. The saddest here is the fact that judicial authority ignored such cases which became too frequent this year.

As a result:

deterioration in partner relations and company name discredit in the opinion of partners, not to mention the periodic blocking of business economic activity

To find guilty persons

The easiest, of course, is to accuse investigative judges that they supposedly “didn’t understand”. If to glance more deeply and to understand, the picture with obvious answers appears. The overload of investigative judges pushes them on formal job accomplishment responsibilities, acceptance of often unreasoned decisions and ignoring of factors which, most likely, will lead to huge losses of the entity from possible far-fetched criminal proceedings.

A statistical picture

Addressing to open statistics of the General Prosecutor Office of Ukraine and judicial authorities, in 2015 the court has initiated 2697 criminal proceedings on tax avoidance by subjects of managing. Only 64 criminal proceedings with the taken indictment have been initiated. There have been only 2,4% of total quantity criminal proceedings for the last year.

As a result hundreds of legal proceedings had been carried out for 2015-2016, the majority of which were inefficient and directed to making of pressure upon entrepreneurs for receipt of illegal benefit.

Considering the above, there is an obvious inefficiency of law enforcement work agencies in the sphere of fiscal policy that, in turn, confirms potential abuse with the powers conferred on them.

Especially important and urgent is a question about correct timely protection of the company against “surprise” in the form of a morning office search or all specific documents withdrawal.

The first 8 steps in protection of own business:

The first that necessary to remember are the planned training of corporate lawyers and other employees in the implementation of preparatory actions which surely will help in the future. So,you should:

to sign the agreement on provision of a legal assistance with the lawyer who carrying out a search quickly when he/she will arrive in an office for participation in a search as the representative of the entity which is provided with a legal assistance;
to clean excess information in a documentary and electronic type;
to transfer documents for storage to the distant and special unit. It will make impossible their unexpected withdrawal;
to keep documents in another place (a safety-deposit box, a rented room, etc.), to store documents in electronic form under reliable crypto steady passwords on electronic media, to destroy “unnecessary virtual workers” and draft copies of documents, also to keep documents on the remote server, using cloud services;
to instruct employees by their rights and actions during a search in case of its carrying out, including for prevention of illegal actions by law enforcement agencies;
to prepare and distribute special instruction of actions algorithms sheets for employees;
to exclude easily uncontrollable access on the entity to strangers without confirmation of powers and legality of their actions;
to establish in “key points” of the video system entity surveillance with data recording on the remote server or using cloud services.

It is only the commonly accepted algorithm of rules of the entrepreneur conduct . Of course, it is not complete. Each case should be considered individually.

Professionals also recommend!

For minimization of legal and tax risks company executives shall sign agreements on rendering a legal assistance with external consultants in advance. Special attention should be paid to reputation and experience of consultants in the sphere of the criminal law.