Experimental Project of the State Tax Service (STS) on Managing Tax Risks

The Main Department of the STS in Sumy Region draws attention to the fact that the STS is implementing a tax risk management system (compliance risk management).

Using this system, the STS:

• analyzes internal and external factors that may affect tax payment;
• identifies potential risks of violations;
• selects appropriate ways to respond to these risks;
• continuously reviews and updates risk-related information;
• exchanges data, learns, and accumulates experience to improve its operations.

The main types of risks that arise when taxpayers fail to comply with tax legislation and other regulatory acts monitored by tax authorities within the framework of the experimental project include:

• Registration risk – situations where individuals or entities that are required to be registered with the tax authority or registered as taxpayers of certain taxes are, in fact, not registered or do not have the necessary tax registration;
• Reporting risk – cases of late submission or complete absence of tax reporting from taxpayers;
• Payment risk – situations where taxes, fees, or other mandatory payments are paid late, not in full, or not paid at all, resulting in the emergence and accumulation of tax debt;
• Declaration risk – cases where tax liabilities are understated or may be understated due to incorrect reporting, whether as a result of errors or intentional actions.

The management system covers automated, non-automated, and combined processes.

Automated processes involve the use of specially developed algorithms that automatically identify and assess tax risks and determine measures to respond to them. The use of automated processes ensures the unification of organizational and methodological approaches in the interaction between the STS and taxpayers and reduces the impact of the human factor.

Non-automated processes are based on identifying risks using tax information extracted from the STS information and communication system according to one-time thematic algorithms, as well as information received from external sources.

Combined processes involve a mix of automated and non-automated methods for processing information about taxpayers and the tax risks associated with them.