Regarding realization of the VAT payers’ rights to administrative appeal of individual decisions of regional level commissions

To the attention of the value-added tax payers regarding execution of their right to administratively appeal individual decisions of regional level commissions regarding disregarding the taxpayer's data tables and the taxpayer's compliance with the taxpayer’s risk criteria.

In connection with entry into force of Resolution of the Cabinet of Ministers of Ukraine № 574 as of 02.06.2023 "On amendments to Resolution of the Cabinet of Ministers of Ukraine № 1165 as of 11.12.2019" (hereinafter – Resolution № 1165) from 08.07.2023, Procedure for consideration of complaints was approved, in particular, regarding decisions of the regional level commissions on disregarding data tables of the value added tax payer and on compliance of the value added tax payer with the taxpayer’s risk criteria.

Before introduction of the above-specified changes in norms of Resolution № 1165, appeals in the administrative procedure were provided only for decisions of regional level commissions on refusal to register tax invoice/ adjustment calculation in Register. Currently, mechanism has been introduced that allows taxpayers to exercise right to appeal all decisions of regional level commissions in the administrative procedure.

Please note that complaint is submitted by the value added tax payer within 10 working days following day of the regional level commission’s decision.

Based on the consideration results of complaint, central level commission, within 10 calendar days from date of receipt of such complaint, makes decision to satisfy complaint and cancel decision of the regional level commission or leave complaint unsatisfied and decision of the regional level commission unchanged.

Therefore, introduction of existing administrative appeal mechanism, which operates under the statutory deadlines, completely eliminates number of lengthy court proceedings on this occasion.

We call on payers to more actively use relevant mechanisms, at the same time, paying attention to certain peculiarities of their realization. It should be borne in mind that, for example, procedure for appealing decision of the regional level commission regarding the payer’s compliance with the risk criteria, in case of a negative decision of the central level commission will force payer to go to the court (since there is no other way to exclude from risky).

That is, it is important to make maximum use of procedures at the regional level and only after they have been exhausted, decision on riskiness should be appealed to the central level commission. Regarding the data tables: after negative decision of the central level commission, the taxpayer can resubmit data table for consideration by the regional level commission with explanation and detailed description of economic activity with reference to tax and other reporting. In this way, business entities can use administrative appeals against data table denial decisions without fear of getting bogged down in litigation.

There are several advises for taxpayers, namely:

1) for operational communication, contact communication tax platforms operating in bodies of the State Tax Service; get clarifications the "hotlines" numbers; in the "Online education" section on website of the State Tax Service at the link https://tax.gov.ua/baneryi/onlayn-navchannya, familiarize yourself with information materials on the correctness of filling in the taxpayer’s data table, actions of the VAT payer in case of registration suspension of tax invoice/ adjustment calculation in the Unified register of tax invoices, etc.;

2) carefully learn decisions of the regional level commissions and conduct constant dialogue with tax authorities regarding doubts about grounds for their adoption;

3) send requests directly to tax authorities (mainly at the regional level).