On legal regulation of tax optimization and tax evasion in Ukraine

Abstract

The article analyzes the legal regulation of tax optimization and tax evasion in Ukraine. The right of a taxpayer to use any legal options to reduce the tax liability is based on the constitutional principle of equality of all forms of ownership. However such actions frequently cause negative reaction from the government through its <scal authorities, since tax optimization model is often developed on the edge of legality. On the one hand, the state tolerates legal reduction of tax liability by providing various tax concessions and establishing diAerent tax regimes, on the other hand, law enforcement, including judicial, practice restricts such actions by introducing the concept of “abuse of rights” and “unfair practices” within tax relations. Today, each state develops its own approach to diAerentiation between lawful and unlawful reduction of the tax burden. The de<nition of tax optimization, its consolidation in the tax legislation of Ukraine and the establishment of clear boundaries between tax optimization and other forms of reduction of tax liability, including tax evasion, are becoming increasingly important. In this article, the authors show the shortcomings of absence of legislative regulation of the problem in Ukraine, and reveal the main approaches to the definition of this concept in the science of tax law.