Court confirmed legality of adopted tax notifications-decisions

Cassation court supported the controlling authority’s position regarding legality of adopted tax notifications-decisions, which imposed financial sanctions on the plaintiff for violating requirements of Sub-paragraph 230.1.2 Paragraph 230.1 Article 230 of the Tax Code of Ukraine.

Resolving this dispute, the courts took into account that according to the content of provisions of Sub-paragraph 80.2.5 Paragraph 80.2 Article 80 of the Tax Code of Ukraine, actual audit can be carried out in case that the controlling authority performs functions defined by legislation in the production and circulation of alcohol, alcoholic beverages, tobacco products and fuel.

The Supreme Court emphasized that performance of functions defined by legislation in the production and circulation of alcohol, alcoholic beverages, tobacco products and fuel is independent circumstance with which the legislator associates the controlling authority’s right to conduct actual audits of business entities and does not require presence and/or receiving, according to procedure established by the law, information about violations of legislative requirements. In this case, the fact of entrusting the controlling authority with monitoring compliance with legislation in relevant sphere of legal relations (production and circulation of alcohol, alcoholic beverages, tobacco products and fuel) is sufficient.

Therefore, the specified legal norms allow actual audit of the taxpayer, including performance of the controlling authority’s functions, defined by legislation in the production and circulation of alcohol, alcoholic beverages, tobacco products and fuel, which by virtue of provisions of Article 16 of the Law of Ukraine "On state regulation production and circulation of ethyl alcohol, cognac and fruit alcohol, alcoholic beverages, tobacco products and fuel" are assigned to the defendant.

The Supreme Court also stated that handing a copy of order on actual audit to a person who, at the audit time, was carrying out settlement operations, even though he held position of the operator-refueler of automobile gas stations, is a proper compliance by the controlling authority with provisions of Article 81 of the Tax Code of Ukraine, which provided the defendant with opportunity to start actual audit.

Cassation administrative court as a part of the Supreme Court in case № 120/14178/23 as of 22.10.2024 dismissed the plaintiff’s cassation appeal; decision of the Vinnytsia district administrative court as of 20.11.2023 and decision of the Seventh administrative court of appeal as of 22.02.2024 were left unchanged.