1. Statute law

According to the Constitution, taxes and levies, as well as penalties for non-compliance, may only be established by laws enacted by Parliament. Parliament exercises this prerogative frequently, and it is quite common for more than twenty amendments to be made to the various Ukraine tax laws each year, sometimes with potentially retroactive effect. Although many amendments are very minor, the frequent changes, as well as the government's failure to proceed with declared intentions and schedules for tax reform, have earned Ukraine the reputation of having an unpredictable tax system.

Strictly speaking, the State Tax Authority (STA) does not have discretion to amend the law, but in practice, the STA often issues tax clarifications that are not always consistent with the law, although this can be a function of ambiguities in the law as much as anything else. Nevertheless, it is prudent to consider STA interpretations and the risk of conflict with the STA before taking a position based on the law.

Conclusion

Although the process of reforming the tax system will only be completed when the TaxCode is enacted, it is clear that the reforms introduced have modified the tax system and have made it more investor-friendly. It is also clear that the general trend is to reduce the tax burden, streamline the compliance process and introduce tax principles and concepts used in more developed tax systems.

The main purpose of the 2004 tax reforms is to decrease the overall tax burden by means of reducing the tax rates while simultaneously widening the tax base. This is very good step forward.

It is clear that the Ukrainian Parliament and Government have accomplished significant developments in developing the tax system. It is also clear that the 2004 tax reform is likely to encourage new investors. However, it is also evident that Parliament and the Government must continue working to improve the tax system. A clear and friendly taxenvironment is the cornerstone upon which the investment climate in Ukraine will flourish to its full potential.

List of references :

1. Tax system in Ukraine- http://juveko.com.

2. My Ukraine- http://myukraine.info

3. Tax system and administration- http://pwc.com

4.  Ukraine should implement tax reform despite the crisis -http://debaty.org