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6.1.2 Budget dynamics - specific issues...
What tax changes are needed for Ukraine to join the EU? For candidate countries, this entails the preparation of hundreds and even thousands of pages of various draft laws. In this regard, the Tax Code of Ukraine may also be significantly changed. There are about twenty directives that need harmonization, and only two normative acts that are already directly implemented and do not require changes to the current legislation.
EU tax policy consists of two components: direct taxation, which remains the exclusive responsibility of member states, and indirect taxation, which affects the free movement of goods and the freedom to provide services in the single market. There are also rules of administrative cooperation that ensure the proper functioning of the tax system.
Indirect taxation
As the EU has its own economic area, most indirect tax directives set a level playing field for companies from all member states. First of all, in terms of value added tax and excise duties.
The Association Agreement between Ukraine and the EU contains provisions on the harmonization of VAT and excise tariffs. With the assistance of the EU4PFM project, a comprehensive analysis of the VAT legislation was conducted and only minor non-conformities with the EU VAT Directive were identified. Ukraine has also taken a number of steps towards its excise duties. Although official conclusions are still awaited.
However, there are still several directives that go beyond the Association Agreement. They regulate, among other things, the administration of excise taxes. In particular, the creation of a network of excise warehouses that meet the legal and technical requirements of the EU, but not the setting of tax rates. This requirement is fundamentally important to prevent the circulation and production of counterfeits and counterfeits in the single market.
Direct taxation
The main principle of the EU provides for a balance between the standards of taxation of individuals and legal entities. First of all, measures to prevent tax evasion and double taxation are the most important. In this regard, it is necessary to implement a number of EU directives into national legislation.
Compatibility of the EU system and OECD standards: Ukraine has already implemented into its national legislation certain global, and therefore European, taxation standards for combating tax evasion and avoiding double taxation. Our project also made efforts to implement the aforementioned initiatives. It should be noted that EU law in this area is somewhat more demanding and requires further implementation of such legislation as, for example, the Directive on tax dispute resolution mechanisms in the European Union.
Administrative cooperation
Although EU membership does not deprive a country of full independence in
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