Court supported position of tax authorities regarding legality of collecting payment of the land tax liability

Cassation court supported position of the controlling body regarding legality of collecting payment of the land tax liability.

Courts found that the plaintiff paid monetary land tax obligations for the specified tax periods, however, funds received for payment of current tax liabilities was automatically credited by the defendant to the tax debt repayment of past tax (reporting) periods.

Supreme Court concluded that payment of tax liability by the plaintiff before the tax debt repayment, i.e. in violation of provisions of Paragraph 87.9 Article 87 of the Tax Code of Ukraine, as a result of which the tax authority credited funds for the tax debt repayment instead of the taxpayer, cannot be considered a proper payment of tax liability obligation and entails responsibility, provided for in Paragraph 126.1 Article 126 of the Tax Code of Ukraine.

That is, the analysis of Paragraph 126.1 Article 126 of the Tax Code of Ukraine proves that object of application of a fine is the repaid amount of tax debt, method of such repayment is not important (it is independent payment or crediting of paid funds by the controlling body to account of the tax debt repayment according to the sequence of its occurrence). Tax debt repayment according to provisions of Sub-paragraph 14.1.152 of Paragraph 14.1 Article 14 of the Tax Code of Ukraine is a reduction in the absolute value of amount of such debt, confirmed by relevant document.

Therefore, by ruling of the Supreme Court as a part of panel of judges of the Cassation Administrative Court as of 20.09.2023 in case № 821/167/18 cassation appeal of the controlling body was satisfied; decision of the Kherson District Administrative Court as of 16.03.2018 and decision of the Odesa Appellate Administrative Court as of 29.05.2018 was canceled and new decision was made, which rejected the claim.