Court recognized legality of charging fines to the payer for late registration of tax invoices

Cassation court supported controlling body's position regarding legality of decision, which fined the plaintiff for late registration of tax invoices.

Supreme Court stated that from 27.05.2022, legislative provisions regarding moratorium (suspension) of application of punitive (financial) sanctions (fines) for a period of quarantine, which applied to legal relations regulated by Paragraph 52-1 Sub-section 10 Section XX "Transitional Provisions" of the Tax Code of Ukraine (hereinafter – Code).

Law of Ukraine № 2260-IX as of 12.05.2022 "On amendments to the Tax Code of Ukraine and other laws of Ukraine regarding peculiarities of tax administration of taxes, levies and single contribution during military, state of emergency" amended Sub-paragraph 69.9 of Paragraph 69 Sub-section 10 Section XX "Transitional Provisions" of the Code.

According to the new version of this norm, for taxpayers and controlling bodies , expiration of terms determined by tax legislation and other legislation, control of compliance with which is entrusted to the controlling bodies the passage of time was stopped, except for compliance with registration terms of tax invoices, adjustment calculations to them in the Unified register of tax invoices, submission reporting, including reporting provided for in Paragraph 46.2 Article 46 of the Code, on the payment of taxes and fees by taxpayers.

Sub-paragraph 69.1-1 was added to Paragraph 69 Sub-section 10 Section XX "Transitional provisions" of the Code from May 27, 2022. According to the new provisions of this Sub-paragraph, value added tax payers are obliged to ensure, within terms established by Sub-paragraph 69.1 of this Sub-section, registration of tax invoices and adjustment calculations in the Unified register of tax invoices, deadline for registration of which falls within periods specified in Sub-paragraph 69.1 of this Sub-section and clarify (bring into line) tax credit declared by payers on the basis of primary (settlement) documents available to the payer, taking into account data of tax invoices and/or adjustment calculations registered in the Unified register of tax invoices.

Law of Ukraine № 2836-IX as of 13.12.2022 "On amendments to the Tax Code of Ukraine and other laws of Ukraine on promoting restoration of energy infrastructure of Ukraine" (entered into force on 03.01.2023) stipulates that Sub-paragraph 69.1 is set out in the new version, in particular, according to Clauses 3 – 5 taxpayers who have opportunity to fulfill their obligations in a timely manner are exempted from responsibility for late fulfillment of such obligations in relation to:

registration in the Unified register of tax invoices by such payers of tax invoices and adjustment calculations, date of which falls on a period from February 1 to May 31, 2022, provided that their registration is ensured not later than July 15, 2022;

registration in the Unified register of tax invoices of consolidated tax invoices and/or adjustment calculations to such consolidated tax invoices, date of which is compiled in a period from February 1 to May 31, 2022, made according to operations specified in Paragraph 198.5 Article 198 and Paragraph 199.1 Article 199 of the Code, provided that their registration is ensured not later than July 20, 2022.

In view of the above specified, legal regulation of disputed legal relations, the panel of judges of the Supreme Court notes that the taxpayer is released from responsibility for late registration of tax invoices during the moratorium period, introduced by Paragraph 52-1 Sub-section 10 Section XX "Transitional provisions" of the Code, namely from 01.03.2020 to 26.05.2022.

Therefore, if tax invoices/adjustment calculations were compiled by the payer in a period from February 1 to May 31, 2022, and were registered in the Unified register of tax invoices in violation of deadline after July 15, 2022, the controlling body has grounds for applying fine (financial sanctions) according to Paragraph 120-1.1 Article 120-1 of the Code.

At the same time, it should be taken into account that legal situations related to the possibility or impossibility of registering tax invoices during the martial law are essentially identical both with respect to tax invoices compiled starting from February 2022 and those that were compiled earlier, but were not registered in a time due to extraordinary circumstances – the Covid pandemic and martial law.

Cassation administrative court as a part of the Supreme Court of 12.03.2024 in case № 160/13661/23 dismissed the plaintiff’s cassation appeal; decision of the Dnipropetrovsk district administrative court as of 28.08.2023 and decision of the Third administrative court of appeal as of 13.12.2023 were left unchanged.