STS proved in court the legitimacy of additional accrual totaling 832.45 million UAH

The Sixth Administrative Court of Appeal upheld position of the Central Interregional Directorate of the STS for work with Large taxpayers that natural gas purchased by the JSC “Ukrtransgaz” for production and technological costs should be used only for those cost items for which the planned volumes of such gas were calculated according to methods approved by the National energy and utilities regulatory commission (NKREKP).

The Court of Appeal confirmed that the taxpayer did not take into account assets received free of charge in the form of accounts payable reflecting an adjustment in the income tax declaration.

In addition, the Sixth Administrative Court of Appeal noted that the JSC “Ukrtransgaz” had no right to form a tax credit due to relationship with the counterparty, as lacking supply of products was established by a court decision in another case, which came into force.

Herewith, the Court of Appeal critically estimated the taxpayer’s argumentations regarding conduction of business operations with a number of counterparties, made a conclusion that there was no source of origin of products and unrealistic operations in time and space, which, in turn, indicates the defect of primary documents.

Decree of the Sixth Administrative Court of Appeal as of 12.04.2021 in case № 640/20596/18 stipulates that an appeal of the JSC “Ukrtransgaz” was dismissed and Decision of the Court of first instance on refusal to satisfy the claims was left unchanged.

As follows, the Cassation Court confirmed the legitimacy of issued by the tax authority tax notifications-decisions for the total amount of 832.45 million UAH.

Communicate with the State Tax Service remotely using the “InfoTAX” service