Criminal liability for tax evasion with the use of offshore schemes as a prerequisite of stabilization of economy of Ukraine

Abstract

This article first introduces the statistics of losses of the State Budget of Ukraine, which in 2019 were caused by violations of the statutory procedure for payment of taxes, fees and other mandatory payments in Ukraine, thus focusing on the relevant issues. The problem of tax evasion using offshore jurisdictions, or so-called offshore countries, is considered separately. Emphasis is placed on the destructive consequences arising from this illegal activity for the national economy of Ukraine. In addition, the authors turn to the analysis of world experience in combating the relevant negative phenomenon. Particular attention in this regard is paid to the method of promoting compliance with the procedure for payment of taxes, fees and other tax payments in the United Kingdom of Great Britain and Northern Ireland. In particular, an approach such as the establishment in the United Kingdom of criminal liability for significant tax evasion by persons who directly or indirectly own offshore income, assets, consequences of offshore business activities, or anything that has a result similar to arising from offshore income, assets or offshore business activities. This type of penalty was introduced in 2017 due to the entry into force of Section 166 of the 2016 Finance Act in the United Kingdom. Criminal liability under this section arises for acts related to offshore activities and consists of: failure to notify the supervisory authority of income tax or capital gains tax, breach by the payer of the obligation to file a declaration, filing a declaration containing false information, or breach of due the amount of payment of the corresponding mandatory payment. At the end of the article, the authors proposed to amend the Criminal Code of Ukraine, which will provide for the introduction of a similar rule in Ukrainian law.