Tax officials proved legitimacy of additional accrual of 16.95 million UAH in the court

Court confirmed legitimacy of tax notification-decisions for 16.95 million UAH issued by Main Directorate of the STS in Kyiv city.

Cassation Court within the Supreme Court upheld position of Main Directorate of the STS in Kyiv city and concluded that payer’s reference to the supervisory authority’s violation of audit is unfounded, as Main Directorate of the STS in Kyiv city in order to comply with current legislation, extended a period of audit to allow the payer to renew lost documents and provide them at the request of tax body. This was not done by the taxpayer.

Panel of judges noted that the Audit Act concluded that payer, in violation of Paragraphs 177.2, 177.4 of Article 177 of the Criminal Code of Ukraine, unreasonably overstated costs for 2016 and 2017, which are not documented, used not in economic activities and not associated with income. Also checking the correctness of determining the net income amount detected that the payer in violation of Paragraphs 177.1, 177.2 of Article 177 of the Tax Code of Ukraine understated income for 2016 and 2017, which led to understatement of personal income tax liability.

Cassation Court summarized that the above specified violations during formation of income, committed by the payer, led to incorrect determination of the tax credit amount, personal income tax, military levy and contribution to obligatory state social insurance, which became a basis for acceptance of the contested decisions by supervisory authority.

As follows, Administrative Cassation Court within the Supreme Court made a Decision to dismiss the taxpayer’s claim and to leave unchanged Decision of the Appellate Court on the refusal to satisfy claims for recognition of notification-decisions as illegal and their cancellation.

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