Court confirmed legality of applying a fine in the amount of more than 1.2 million UAH for violating requirements of current legislation

Cassation court supported the controlling authority’s position regarding legality of adopted tax notification-decision, which applied to the plaintiff punitive financial sanctions (fines) in the form of fines for violation of settlement terms in the foreign economic activity and for non-fulfillment of obligations and violation of requirements of currency legislation in the amount of 1246803.28 UAH.

The Supreme Court concluded that the date of crediting foreign exchange revenue is considered to be its crediting to the distribution account. Further movement of funds from currency to the current account of the legal entity, including use of a distribution account, indicates use of funds already on the territory of Ukraine and cannot be considered primary receipt of funds as a result of execution of foreign economic contracts.

At the same time, despite the fact that in conditions of obligatory sale of foreign currency according to the law, the client does not have opportunity to use funds from the distribution account, these funds belong to the client, and operations on the receipt of foreign currency to the distribution account according to requirements of Regulations (standards) of accounting 21 are subject to accounting on subaccount 316 "Special accounts in foreign currency" provided for in the Instruction on application of Plan of accounts for accounting of assets, capital, liabilities and business operations of enterprises and organizations, approved by Order of the Ministry of Finance of Ukraine № 291as of 30.11.1999, which is intended for accounting of funds in foreign currency , which are subject to distribution or additional preliminary control, including sums of funds in foreign currency, which are subject to obligatory sale according to legislation.

Based on the above specified, the panel of judges supports conclusions of the Appellate court that the date of fulfillment of requirements of Article 1 of the Law of Ukraine № 185/94-VR as of 23.09.1994 № 185/94-VR "On the Procedure for making settlements in foreign currency" is the date of crediting funds to the plaintiff's distribution accounts in the authorized bank, and, therefore, the defendant proved legality of making such decision and proved amount of the specified penalty for violation of settlement terms in the foreign economic activity.

Therefore, the Cassation administrative court as a part of the Supreme Court on 29.05.2024 in case № 2040/8051/18 dismissed the plaintiff’s cassation appeal; decision of the Second administrative court of appeal as of 30.11.2023 was left unchanged.