Court confirmed legality of applying a fine for violating payment term of monetary obligation

Cassation court supported the controlling authority’s position regarding legality of adopted tax notification-decision, which imposed a fine of 10% on the rent payment for the subsoils use for extraction of natural gas to the payer for violation of payment deadline for extraction of natural gas in the amount of 1565772.67 UAH.

As established by the courts and confirmed by case materials, as a result of the plaintiff's non-fulfillment of tax liability in terms of the rent payment for the subsoil use for the extraction of natural gas, a tax debt arose.

As a general rule, the payer is responsible for improper fulfillment of tax obligation. It also follows from general provisions of Article 38 of the Tax Code of Ukraine that proper fulfillment of tax obligation is payment in full by the payer of relevant amounts of tax obligations. Therefore, the Supreme Court emphasized that release of payer from liability for violation of payment terms of tax liability does not indicate release from obligation to fulfill tax liability.

In addition, the Supreme Court drew attention to provisions of Article 30 of the Law of Ukraine "On payment systems and fund transfers in Ukraine", according to which transfer is considered completed from the moment the transfer amount is credited to recipient's account or issued to the payer in cash. Specified norm also indicates that proper fulfillment of tax obligation by initiating transfer by the payer is receipt of funds from the payer to relevant treasury account.

At the same time, the panel of judges notes that it was the taxpayer, and not relevant state authority, that had a contractual relationship with the bank, this bank in this case provided the taxpayer with relevant banking services as a counterparty under business contract for banking services. Claimant was free to choose appropriate counterparty (bank) for storage and transfer of his funds, therefore non-fulfillment of his obligations by the counterparty bank refers to commercial risks of the claimant and cannot be transferred to the state.

Under such circumstances, the panel of judges believes that in this case there are no grounds for satisfying claims.

Therefore, the Supreme Court certified that conclusions of the courts of previous instances about groundless adoption of disputed decision by the controlling authority are erroneous.

Cassation administrative court as a part of the Supreme Court on 19.06.2024 in case № 826/6809/18 supported cassation appeal of Main Directorate of the State Tax Service in Poltava region; decision of the District administrative court of Kyiv city as of 09.08.2018 and decision of the Sixth administrative court of appeal as of 19.12.2018 were canceled and new decision was adopted, which completely refused to satisfy administrative claim.