Company will pay 1.5 billion UAH for violating tax legislation by the court order

Court confirmed legitimacy of tax notification-decision for 1.5 billion UAH issued by Central Interregional Directorate of the STS for work with large taxpayers.

District Administrative Court of Kyiv city upheld position of Central Interregional Directorate of the STS for work with large taxpayers and concluded that payer’s reference to the fact that he is both producer of electricity and heating energy is unfounded, as current legislation clearly stipulates that production, transportation, supply of heating energy is subject to licensing and appropriate evidence of such licensing is relevant license for heat production.

According to the Tax Code of Ukraine (TCU) for enterprises that are exempted from income tax pursuing Second paragraph of Paragraph 15 Sub-section 4 Section XX of the TCU, a necessary condition for its application is implementation of activities for the simultaneous production of electricity and heating energy using biological fuels on the basis of permissive documents for such activities.

Court considers the taxpayer’s references unreasonable to resolutions of the National Electricity Regulatory Commission of Ukraine as of 30.12.2009 № 1573, as of 20.01.2011 № 33, as of 23.12.2011 and as of 23.02.2012 № 124, as a proof that the taxpayer is both producer of electricity and heating energy, as current legislation clearly stipulates that production, transportation, supply of heating energy is subject to licensing.

Appropriate evidence of such licensing is a relevant license for production of heating energy.

Payer to confirm existence of a right to use benefits provided for in Second paragraph of Paragraph 15 Sub-section 4 Section XX of the TCU has not provided license that would give a right to generate heating energy, profits of which are subject to exemption from taxation.

Court noted that indication in the charter of any company of a list of activities or the indication of a certain type of activity as the main one is not in itself proof of the actual implementation of all these activities or implementation of a certain activity as the main one.

During the investigation of case materials, the court found that according to Certificate from the Unified state register of enterprises and organizations of Ukraine regarding the taxpayer, there is no such activity in the Classification of economic activities as production of heating energy.

As follows, District Administrative Court of Kyiv city made a Decision to completely deny an administrative claim of the SE “National Atomic Energy Generating Company “Energoatom” for recognition of tax notification-decision as illegal and their cancellation.

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