Court supported position of the State Tax Service regarding legality of notifications-decisions issued by tax authorities in the amount of 5.6 million UAH

Cassation court supported position of the controlling body on compliance with requirements of tax, currency and other legislation, on issues of timeliness, reliability, completeness of accrual and payment of single contribution, as a result of which tax notifications-decisions were issued for the amount of monetary liabilities of 5.6 million UAH.

In particular, ruling of the Supreme Court as a part of the panel of judges of the Cassation Administrative Court as of 20.07.2023 in case №280/2815/19 supported position of Main Directorate of the State Tax Service in Zaporizhzhia region and concluded that defining specific of economic operation is that it should cause real changes in the taxpayer’s property status. Requirement for real changes in the taxpayer’s property status of as a mandatory specific of economic operation corresponds to norms of the Tax Code of Ukraine.

The court also stated that expenses for purposes of determining financial result before income taxation, as well as tax credit for purposes of determining taxation object with the value added tax, must be actually incurred and confirmed by properly executed primary documents reflecting reality of business operations which are the basis for forming the taxpayer's tax records. Herewith, presence of formally executed (composed) primary documents and/or payment of funds cannot serve as a basis for formation of tax accounting data in the absence of the fact of acquisition of relevant asset.

Therefore, by ruling of the Supreme Court as a part of the panel of judges of the Cassation Administrative Court as of 20.07.2023 in case №280/2815/19, the cassation appeal of Main Directorate of the State Tax Service in Zaporizhia region was satisfied and the decision of the Zaporizhia District Administrative Court as of 15.01.2020 and decision of the Third Appeal Administrative Court as of 03.02.2021 was cancelled, the case was referred to the court of first instance for a new consideration.