In recent years, Art. 205 of the Criminal Code of Ukraine has become widespread not only among criminal proceedings for crimes in the sphere of economic activity, but also among administrative disputes between taxpayers and tax authorities. In this review we propose to dwell on the practical application of the provisions of Art. 205 of the Criminal Code of Ukraine in the courts, as well as on the analysis of the effectiveness and appropriateness of such provisions.

1.

According to the Unified State Register of Judgments for 2016-2018. under Art. 205 of the Criminal Code of Ukraine "Fictitious Entrepreneurship" issued 368 judgments, of which only 3 acquittals, 40 convictions and 325 verdicts on the approval of agreements on the recognition of guilt (that is, without an actual investigation by the court of evidence). The specified court decisions are available in Useful documents, and their brief description and details are given in the table. Let's try to figure out whether such persecution really corresponds to the goals and objectives of Art. 205 of the Criminal Code of Ukraine and is really effective.

 

2.

Recall, that Art. 205 of the Criminal Code of Ukraine under the text covers only:


«[…]" the creation or acquisition of business entities (legal entities) with a view to covering up illegal activities or carrying out activities for which a prohibition exists."».

 

That is, in the text of Art. 205 of the Criminal Code of Ukraine covers only the creation of a legal entity with intentions regarding a "fictitious enterprise".».

 

According to this article, punishment is provided in the form of a fine of five hundred non-taxable minimum incomes of citizens to five thousand non-taxable minimum incomes of citizens.

 

As follows from the texts of sentences according to the data of the Unified State Register of Judicial Decisions, in fact, applied under sentences under Art. 205 of the Criminal Code in 2016-2018. fines range from UAH 2,500 to UAH 85,000, while the standard penalty (applied in 220 decisions) is only UAH 8,500.

 

Obviously, given the size of the fine, the task of preventing further crimes is not carried out, since a fine of UAH 8,500 is not an effective warning against such activities in the future.

 

3.

At the same time from the applied fines, it is seen that the investigation of criminal proceedings under the Art. 205 of the Criminal Code of Ukraine does not fulfill the tasks and to ensure the filling of the budget».».

 

So, with regard to the effectiveness of criminal proceedings under the Art. 205 of the Criminal Code of Ukraine, then in general for 2016-2018. the total amount of fines on sentences was 6 446 950 UAH. For comparison under Art. 212 of the Criminal Code of Ukraine, the fines for only 2017 amounted to 21,559,423.71 UAH, which is almost 4 times more.

 

Thus, from the point of view of ensuring the filling of the budget, the effectiveness of art. 205 of the Criminal Code is extremely low and, most likely, does not provide even compensation for the money spent on maintenance and maintenance of related activities.

 

4.

If neither the preventive function nor the compensatory function, art. 205 of the Criminal Code of Ukraine has not yet fulfilled, the question arises as to the reasons for such a widespread application of this article in practice.Despite the limited nature of the crime under art. 205 of the Criminal Code of Ukraine, only the moment when a legal entity was created in most sentences gives an assessment and further activities of such a fictitious enterprise. Such an assessment is given for a specific purpose.

 

So, as follows from the data of the Unified State Register of Court Decisions, 92 verdicts under art. 205 of the Criminal Code of Ukraine further appeared in the text of court decisions in tax disputes. If we count from the total number of convictions and agreements on recognizing guilt (368 decisions), then the percentage of sentences that later became tax evidences in disputes with other taxpayers is 25%.

 

At the same time, if judgments from which a real assessment is made to subsequent operations of a "fictitious enterprise" are seen, sometimes with a list of counterparties and a list of documents, 1 the sentences that appeared as tax evidences in disputes with other payers are 67%.

 

At the same time, real cases of using Art. 205 of the Criminal Code of Ukraine in tax disputes is in fact even greater - part of the criminal proceedings under art. 205 of the Criminal Code of Ukraine as evidence of tax authorities appears in administrative disputes even before the verdict (at the stage of interrogation protocols).

 

That is, in fact, while Art. 205 of the Criminal Code of Ukraine is used, rather, to create an artificial "evidence base" against other taxpayers.

 

5.

Apparently, Art. 205 of the Criminal Code of Ukraine is still used not for "appointment", and the amount of punishment used for such an article is not an actual "safeguard" from the continuation of "fictitious entrepreneurship" in the future. The actual use of sentences under Art. 205 of the Criminal Code of Ukraine is carried out, rather, for the artificial formation of evidence in administrative disputes with tax on other payers.

 

In this case, even laid down in Art. 205 of the Criminal Code is a legislative appointment, rather, a declarative one. Thus, the very qualification of a "fictitious enterprise" under art. 205 of the Criminal Code of Ukraine in practice also raises many questions, since, on the one hand, it is the further activity of the "fictitious enterprise" that demonstrates the intentions of the "fictitious enterprise", and not the reasoning of the person at the time of registration, while the further activity is estimated by individual articles.

 

In this connection, the question arises as to whether the feasibility of Art. 205 of the Criminal Code of Ukraine for formally drawn up in this article of the crime without real consequences and sufficient effectiveness for the budget and, accordingly, it may be worth considering the abolition of "fictitious entrepreneurship" under art. 205 of the Criminal Code of Ukraine as a criminal act as such in general?

 

The information was taken from the website: http://www.kmp.ua

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