Tax evasion is punishable by large fines. In the case of a significant amount of debt, financial liability alone will not suffice. For such a crime, an individual entrepreneur can be imprisoned for several years.
Fines and criminal liability
Individual entrepreneurs are mostly subject to administrative penalties when it comes to tax evasion and debt to the budget. But fines are part of the punishment, since in the case of a large tax debt, the situation can be classified as a criminal offense.
It is important to take into account the factor of intentional non-payment of a financial obligation. Both the amount of the fine and the likelihood of being held criminally liable depend on this. Such a punishment may occur if the individual entrepreneur owes:
- over 1,080,000 UAH – a fine or imprisonment for up to 3 years;
- over 3,240,000 UAH – is subject to a fine or imprisonment for a term of up to 5 years.
According to Article 212 of the Criminal Code of Ukraine, an individual entrepreneur is exempted from liability if the full amount of the tax debt is paid together with compensation for the damage caused to the state due to the untimely receipt of payments to the budget.
Plus, evasion is not considered intentional if the payer has reached a tax compromise in accordance with Subsection 9-2 of Section XX “Transitional Provisions” of the Tax Code.
Another reason for recognizing actions as unintentional is the acquisition, creation, receipt or use of objects for which the individual entrepreneur has filed a one-time (special) voluntary declaration and paid the agreed amount of the fee in accordance with Subsection 9-4 of Section XX of the Tax Code.
