Tax control is an integral part of the functioning of any state tax system. In Ukraine, oversight of compliance with tax legislation is assigned to controlling authorities, which are empowered to conduct various types of audits of taxpayers.
As of 2026, the procedure for conducting tax audits is regulated by the Tax Code of Ukraine, which defines the types, grounds, procedures, and timelines for audits, as well as the rights and obligations of taxpayers during their conduct. Understanding the types of tax audits, their features, and the procedure for conducting them is critically important for every taxpayer—both legal entities and individual entrepreneurs.
Proper preparation for an audit, knowledge of one's rights and obligations allows taxpayers to minimize the risks of violations being detected and penalties being imposed. This material reveals the types of tax audits, their characteristics, the procedure for conducting them, and the rights of taxpayers.
Tax Audits: What They Are and Their Purpose
Tax audits are a form of tax control carried out by controlling authorities to verify taxpayers’ compliance with tax legislation requirements. The main purpose of conducting audits is to detect violations in the correctness of calculation, completeness, and timeliness of tax payments, subscriptions, and social contributions, as well as compliance with other requirements established by the Tax Code of Ukraine. Controlling authorities have the right to conduct audits both directly at the taxpayer's premises and at the location of the controlling authority.
The results of the audit are documented with an appropriate act or certificate, which serves as the basis for making a decision on the accrual of additional tax obligations, application of penalties, or, conversely, confirmation of the absence of violations. It is important to understand that a tax audit is not identical to the concept of "revision" or "audit." It has specific legal grounds, procedures for conduct, and consequences. Taxpayers are obliged to ensure proper storage of documents necessary for auditing for the period prescribed by law (usually 1095 days). The absence of documents or their improper execution is considered a violation and entails responsibility.
Types of Tax Audits According to Legislation
Ukrainian tax legislation distinguishes several types of tax audits depending on the object, scope, timelines, and grounds for conducting them. The main types are desk, documentary, and factual audits. Desk audits are conducted without visiting the taxpayer based on the data specified in the tax declarations and reports. Documentary audits involve checking primary documents, records of accounting, and financial reporting. Documentary audits are further divided into planned and unplanned, onsite and offsite. Factual audits are conducted at the actual place of business of the taxpayer (trading venue, office, warehouse, etc.). In addition, legislation also provides for mutual audits, which are conducted to compare data on operations between counterparties. A separate type is electronic audits (scanning), which are carried out based on data analysis from electronic accounting systems. The choice of a specific type of audit depends on the circumstances that have arisen as well as on the risks identified by the controlling authorities based on the analysis of the taxpayer's tax reporting.
Desk Tax Audits: Features of Conduct
Desk audits are the most common type of tax control, as they do not require a visit to the taxpayer and do not need prior notice. They are conducted exclusively on the basis of the data indicated in the tax declarations, calculations, and other reports submitted by the taxpayer to the controlling authority. A desk audit is conducted within 30 calendar days following the deadline for submitting the tax declaration. The subject of a desk audit is arithmetic errors in reporting, logical control of indicators, compliance of declaration data with data from the Unified Register of Tax Invoices, as well as the correctness of applying tax rates and benefits.
During a desk audit, the controlling authority has no right to require taxpayers to provide primary documents or any other materials other than those already contained in the reports. Desk audits are conducted without the participation of the taxpayer. The results of a desk audit are documented with a certificate (if no violations are found) or an act (if violations are found). It is important to note that missing deadlines for submitting reports is not the subject of a desk audit; this is a separate type of violation that is considered under a special procedure. Desk audits may be conducted simultaneously for all taxes paid by the taxpayer.
Documentary Audit: Planned and Unplanned
Documentary audits are a deeper form of tax control that involves checking primary documents, records of accounting, financial reporting, and other documents related to the calculation and payment of taxes. A documentary audit can be planned or unplanned, onsite or offsite. A planned documentary audit is conducted according to a schedule of audits approved by the controlling authority. A planned audit may not be conducted more than once a year for small enterprises and no more than once every two years for other taxpayers. The taxpayer is notified in writing of the conduct of a planned audit no later than 10 calendar days before it begins.
An unplanned documentary audit is conducted based on certain grounds established by Article 78 of the Tax Code of Ukraine. Such grounds include: submission of a corrective calculation by the taxpayer, failure to submit tax reporting, detection of violations as a result of a desk audit, a taxpayer's request for an audit, liquidation or reorganization of the taxpayer, and receipt of information from other government agencies. An unplanned audit can be conducted without prior notification of the taxpayer. The duration of a documentary audit must not exceed 20 working days; however, it may be extended up to 35 working days by a decision of the head of the controlling authority.
Factual Tax Audits and Their Grounds
When discussing types of tax audits, it is worth mentioning factual audits. This is a specific type of tax control conducted at the place of actual business activity of the taxpayer, at the location of economic objects or places where goods are stored. Such an audit does not relate to checking the correctness of bookkeeping—it aims to establish facts related to compliance with the proper use of cash registers, correspondence of cash funds to available documents, and detection of illegal turnover of excise goods.
Factual audits can be conducted based on a decision of the head of the controlling authority if there are grounds established by Article 80 of the Tax Code of Ukraine. Such grounds include: detection of facts indicating possible violations of tax legislation, requests from individuals regarding earning wages without formal labor relations, and analysis of information from other sources. Factual audits are conducted without prior notice to the taxpayer. Officials of the controlling authority have the right to freely access the territory and premises where business is conducted. The duration of a factual audit must not exceed 10 working days. The results of a factual audit are documented with an act signed by the officials of the controlling authority and the taxpayer (or their authorized representative).
Procedure for Conducting Tax Audits
The procedure for conducting tax audits is clearly regulated by the Tax Code of Ukraine. The audit begins with the receipt of a notice about its conduct by the taxpayer (except for factual and unplanned audits based on specific grounds). During the audit, the officials of the controlling authority are obliged to present their official identification and a copy of the order (decision) to conduct the audit. The taxpayer has the right to allow officials of the controlling authority to conduct the audit only after the presentation of the specified documents.
During the audit, officials of the controlling authority have the right to receive explanations from the taxpayer, seize copies of documents, and conduct an inventory of property. The taxpayer is obliged to provide all necessary documents in full. After the audit is completed, an act is drawn up (in case of violations detected) or a certificate (if no violations are found). The audit act is signed by the officials of the controlling authority and the taxpayer. If the taxpayer disagrees with the conclusions of the act, they have the right to submit objections within 10 working days from the date of receipt of the act. As a result of examining the objections, the controlling authority makes a decision to approve the act in full or partly.
Rights and Obligations of the Taxpayer During the Audit
During a tax audit, the taxpayer is endowed with a wide range of rights and obligations. The taxpayer has the right to: receive information from officials of the controlling authority about the grounds for conducting the audit, familiarize themselves with the audit act, submit objections and explanations, require mutual audits, obtain copies of documents compiled during the audit, challenge the officials of the controlling authority, and appeal decisions made based on the results of the audit.
The taxpayer is obliged to: allow officials of the controlling authority to conduct the audit (after presenting the necessary documents), provide all required documents in full, ensure proper conditions for the work of officials of the controlling authority, provide explanations on issues arising during the audit, and fulfill the lawful requirements of the officials. Refusing to provide documents or hindering the conduct of the audit leads to penalties as outlined in the Tax Code of Ukraine. In the event of disputes regarding the conduct of the audit or its results, the taxpayer has the right to appeal the actions or inaction of the officials of the controlling authority in administrative or court proceedings.
Results of Tax Audits and Documentation of Acts
The final stage of any tax audit is documenting its results in the form of an official document. Depending on the type of audit and the violations identified, various types of documents are compiled. If no violations of tax legislation are found during the audit, a certificate is compiled. The certificate is signed by officials of the controlling authority and the taxpayer and does not serve as a basis for making a decision on the accrual of additional tax obligations.
However, if violations in the correctness of calculation, completeness, and timeliness of tax payments are detected, an audit act is compiled. The audit act is the main document that records identified violations and serves as the basis for creating a tax notification-decision. The audit act must include the following information: the name of the controlling authority that conducted the audit; surnames, names, patronymics of the officials who conducted the audit; the name of the taxpayer being audited; the period for which the audit was conducted; a description of the identified violations with reference to specific legal norms; factual circumstances that indicate the occurrence of a violation; calculations of the amounts of additional tax obligations; conclusions based on the results of the audit. The audit act is signed by the officials of the controlling authority and the taxpayer.
In case the taxpayer refuses to sign the act, an appropriate notation is made. The taxpayer has the right to submit objections to the audit act within 10 working days from the date of its receipt. Objections are reviewed by the controlling authority within 20 working days. Following the review of the objections, a decision is made to approve the act in full, partially, or to cancel it. After the act is approved, the controlling authority, within 10 working days, adopts a tax notification-decision, which specifies the amounts of additional tax obligations. This decision can be appealed by the taxpayer in administrative or court proceedings. Missing deadlines for appeals deprives the taxpayer of the right to review the audit results.
Typical Violations Detected by Tax Audits
Tax audits, especially documentary ones, often reveal typical violations committed by taxpayers. The most common violation is the overstatement of tax credit for value-added tax. This occurs when a VAT payer includes amounts of VAT in the tax credit for transactions that are not supported by duly executed tax invoices or for transactions with counterparties who are not VAT payers. The second most common violation is the incorrect determination of the taxable object for corporate income tax. This can involve including amounts that are not subject to taxation in the income or failing to account for certain types of income.
The third violation is the misuse of funds received from the state budget. The fourth violation involves violating the procedures for cash transactions: failure to account for cash, exceeding the cash balance limit, and not complying with the requirements for using cash registrars. The fifth violation is the incomplete or untimely submission of tax reporting. The sixth violation is the incorrect application of tax benefits. The seventh violation involves understating the volumes of sales of goods, works, and services.
The eighth violation is the absence of documents confirming expenses or their improper execution. The ninth violation is the violation of transfer pricing rules, i.e., setting prices at levels that differ from the market. The tenth violation involves using tax invoices issued by individuals who are not registered as VAT payers. Each of these violations entails penalties that can amount to significant sums. To minimize the risks of violations being detected during tax audits, it is recommended to maintain proper accounting, submit reports on time, carefully check counterparties, and correctly apply the norms of tax legislation.