Administrative appeal of decisions on disregarding data tables and payer’s compliance/non-compliance with risk criteria

Press service of the State Tax Service of Ukraine, published 27 December 2023 at 14:00 Chapter: News

Value-added tax payers should note that mechanism for administrative appeal of decisions of regional-level commissions regarding the disregard of data tables and taxpayer’s compliance with risk criteria is in effect from July 8, 2023.

VAT payer must file a complaint within 10 working days following the day of regional level commission's decision.

Based on consideration results of the complaint, the central level commission, within 10 calendar days from the date of receipt of such complaint, makes a decision to satisfy the complaint and cancel decision of regional level commission or leave the complaint unsatisfied and decision of regional level commission unchanged.

Currently, the above-specified administrative appeal mechanism is gaining popularity as it avoids lengthy litigation.

There are also a number of usage peculiarities of mechanisms for appealing decisions of regional level commissions. In particular, in procedure of appealing decision of regional level commission regarding the payer’s compliance with risk criteria, in case of decision to refuse to satisfy the complaint by the central level commission, the next step for the payer can only be to appeal to the court (as there is no other way to exclude from risky). That is, from the point of view of effectiveness of protection of business interests in matters of risk, it is important to make maximum use of procedures at the regional level, and only after their exhaustion, decision on risk should be appealed to the central level commission.

As for data tables, there are no such peculiarities, because even if the central-level commission has refused to satisfy the complaint, the taxpayer can resubmit data table for consideration by regional-level commission with explanation and detailed description of economic activity with reference to tax and other reporting. In this way, business entities can use administrative appeals against data tables denials without fear of getting bogged down in litigation.

In any case, after receiving refusal to satisfy payer’s demands, it is extremely important for the payer to establish complete list of grounds for making such decision by the controlling body in order to choose the most effective ways to protect own rights or to correct errors in activities. For this it is recommended to:

1) carefully learn decisions of commissions of the controlling bodies and to eliminate reasons that became the basis for their adoption. On web portal of the State Tax Service, familiarize yourself with informational clarifications on the correctness of filling in the taxpayer's data tables, recommendations for preparation of explanations and supporting documents, actions of the VAT payer in case of registration suspension of tax invoice/ adjustment calculation in the Unified Register of Tax Invoices, etc. https://tax.gov.ua/baneryi/onlayn-navchannya;

2) communicate with the controlling bodies in case of doubts about the grounds for their decisions, to send requests directly to territorial bodies of the State Tax Service (mainly questions arise at the regional level) to receive a comprehensive answer about the grounds and reasons for making such decisions;

3) operational communication, turn to communication platforms (for civil society institutions and business associations) and receive clarifications by telephone hotlines.