Tax burden (sometimes also: tax efficiency, payment level, tax return) is the ratio of the amount of taxes paid to the income or turnover of the enterprise.
There is no such term as a normative one in the Tax Code of Ukraine (hereinafter referred to as the TCU), however, in practice, regulatory authorities use it when assessing the payer's performance indicators.
When a “low” tax burden becomes a risk
In this material under the wording «"tax burden below average by more than 50%"» This deviation is understood when the payment level indicator is less than 50% from the average (i.e., it is half the average or more). The comparison is made with the average indicator in the relevant industry for the last four quarters. A similar approach is applied not only to income tax, but also to VAT and other taxes.
Average indicators for comparison are taken from the analytical resource of the State Tax Service of Ukraine “Industry Analytics” - https://tpd.tax.gov.ua/analytics, where they are updated monthly and determined regardless of the region - exclusively by the main KVED of the enterprise.
IN Order of the Ministry of Finance dated 02.06.2015 No. 524 «On approval of the Procedure for forming a plan-schedule for conducting documentary scheduled audits of taxpayers» It is envisaged that risk criteria are calculated automatically based on reporting and other State Tax Service databases.
Additionally, it is worth considering that in 2025, the State Tax Service clarified approaches to risk analysis (in particular, through the detailing of risk characteristics and the use of risk codes). Among the indicators that can be taken into account in risk analysis:
- discrepancy between VAT reporting and EPR;
- significant increase in operating costs;
- disagreements with counterparties;
- absence of a company at the tax address, etc.
What can an understated tax burden lead to?
Main risks:
- Getting into the documentary review plan.
- Tax inquiries with a requirement to provide an explanation for discrepancies or "atypical" indicators.
- Suspicions of minimization schemes or tax evasion.
- Declining trust from the regulatory authority and a weaker negotiating position during inspections or disputes.
- Access restrictions to "white business" support programs or to simplified procedures.
How to calculate the tax burden?
To assess compliance with the criteria, you need:
- Go to the link https://tpd.tax.gov.ua/analytics.
- Enter the enterprise's KVED code (main KVED).
- Review the values of indicators for the relevant industry, including: average salary, income tax payment level, and VAT payment level.
We calculate the load
Income tax
The calculation is made using the formula (%):
PN with PnP = (PnP / D) × 100%, where
PnP (profit tax) – the amount of profit tax (lines 06, 06.1–06.4, 08, 10, 12, 15 of the income tax declaration);
D (income) – line 01 of the income declaration.
Although compliance with the average indicator is voluntary, regulatory authorities can monitor it both for payers who seek to meet the "white business" criteria and for other payers.
For example: (profit tax is 313,800.00 UAH of tax / income of the income tax payer is 38,145,634.00 UAH) * 100% = ≈ 0.82%.
According to industry analytics, the average indicator for your KVED is 3.24.
Therefore, the enterprise's indicator is less than 50% from the average (0.82.3% < 3.24 × 0.5), that is, half the average and more, which falls under the criterion “below average by more than 50%”.
Conclusion: it is advisable to analyze the reasons for the deviation, think about future explanations/evidence of the reality of operations and resources (primary, personnel, assets, logistics, economic sense of costs). Weigh all the pros and cons“
VAT
Calculation of the VAT payment level indicator (%) - shows what proportion of the declared volume of supply (excluding VAT) was actually the amount of VAT payable according to the declaration.
VAT PN = (VAT amount payable / Volume) × 100%, where
VAT amount payable – the sum of lines 18 (line 18 B) of VAT tax returns;
Volume (declared volume of supply (excluding VAT) for all transactions (at rates 20%, 14% and 7%)) – the sum of lines 1.1 A, 1.2 A, 1.3 A of VAT tax declarations.
For example: 400,000 UAH VAT payable / 20,000,000 UAH income excluding VAT = 2%.
In the example, it is 2%, meaning that for every 100 UAH of supply (excluding VAT), we had 2 UAH of VAT to pay.
To assess risks, the indicator is compared with the average value for the main KVED for the last four quarters (according to data https://tpd.tax.gov.ua/analytics). If the enterprise value is less than 50% from the average, this may require additional analysis of the reasons for the deviation and preparation of explanations.
Important! The indicator itself does not prove a violation, but if it deviates significantly downward, it may trigger inquiries or inspections.
If, according to the results of the calculations, your tax burden differs significantly from the average indicators according to your KVED or there are risk “signals” (discrepancies with the Unified State Register of Economic Activities, atypical cost dynamics, problematic counterparties), it is advisable to conduct tax planning and prepare a reasoned position with documentary confirmation.
Auditors and lawyers of AF ZEUS provide advice on tax planning, tax risk analysis and support during inspections — contact us to receive a practical action plan for your situation.
