Court supported position of tax officials on the application of fines (financial sanctions) for legislative violations

Cassation court supported the controlling body’s position on the application of fines (financial sanctions) for legislative violation of patenting, regulation of cash circulation and use of registrars of settlement operations; on the application of fines (financial sanctions) for legislative violations in production and circulation of alcoholic beverages, tobacco products and fuel.

Supreme Court testified that the plaintiff purchased fuel (excisable products) from the supplier at his own expense and became its owner under the contract terms. Regardless of the fact that fuel was delivered to the legal address of another purchaser, the plaintiff remained the owner (administrator, manager) of fuel until its sale to another purchaser.

Panel of judges formulated the following legal conclusion: business entity that carried out sale (transfer, shipment) of excisable products (goods), which are listed in Sub-paragraph 14.1.212 of Paragraph 14.1 Article 14 of the Tax Code of Ukraine, in particular, any operations on the transfer (sale, shipment) of fuel in the customs territory of Ukraine on the basis of contracts of the commission is obliged according to requirements of Sub-paragraph 212.3.4 of Paragraph 212.3 Article 212 of the Tax Code of Ukraine, to register as an excise tax payer. At the same time, the excise tax payers (within meaning of Sub-paragraph 14.1.212 of the Tax Code of Ukraine) who sell fuel (both principal and commission agent) must be registered in the controlling bodies as excise tax payers, in particular, business entity that transferred fuel according to the mediation contract (for performance of the commission contract) to another business entity – client, there was obligation to obtain license for such activity.

Therefore, Cassation administrative court as a part of panel of judges of the Supreme Court on 26.10.2023 in case № 420/11327/21 dismissed the taxpayer’s cassation appeal; decision of Odesa district administrative court as of 02.11.2021 and decision of the Fifth administrative court of appeal as of 02.02.2022 were left unchanged.