Court supported position of tax officials regarding application of fine (financial sanction) for late registration of tax invoice/adjustment calculationChapter: News

Cassation court supported the controlling body’s position regarding application of fine (financial sanction) for late registration of tax invoices/ adjustment calculations to tax invoices in the Unified register of tax invoices.

Panel of judges stated that since tax violation in the form of untimely registration of tax invoices in the Unified register of tax invoices is ongoing violation, beginning of which is a day after the last (deadline) day for registration of tax invoice, and such violation ends on the day of actual registration of tax invoice in the Unified register of tax invoices , then in case that tax invoice/ adjustment calculation was compiled during moratorium, and registered in the Unified register of tax invoices after cancellation of moratorium (i.e. after 26.05.2022), responsibility for violating registration terms of tax invoices applies for a period, in which grounds for exemption from liability ceased to exist.

At the same time, Paragraph 69.1 Sub-section 10 Section XX "Transitional Provisions" of the Tax Code of Ukraine establishes that taxpayers who have opportunity to fulfill their tax obligations in a timely manner, specifically with regard to compliance with registration terms in relevant registers of tax invoices, adjustment calculations are released from liability for the untimely performance of such obligations deadline for which falls on a period starting from 24.02.2022 until the date of entry into force of the Law of Ukraine "On amendments to the Tax Code of Ukraine and other laws of Ukraine regarding tax administration peculiarities of taxes, levies and single contribution during the military, state of emergency" provided that such payers register tax invoices and adjustment calculations in the Unified register of tax invoices by 15.07.2022.

Since, within the framework of disputed legal relationship, the plaintiff compiled tax invoices in a period from 14.02.2022 to 15.08.2022 and registered them in the Unified register of tax invoices in a period from 03.08.2022 to 02.09.2022 in violation of time limit specified by Paragraph 201.1 Article 201 of the Tax Code of Ukraine, the panel of judges of the Supreme Court agrees with conclusions of the courts of previous instances about legality of application of fine (financial sanction) by the controlling body on the basis of Paragraph 120-1.1 Article 120-1 of the Tax Code of Ukraine.

In addition, during the case consideration, the plaintiff did not prove existence of circumstances of his appeal to the tax authority with a corresponding application for fulfillment of provisions of Procedure for confirming possibility or impossibility of the taxpayer's fulfillment of obligations specified in Sub-paragraph 69.1 Paragraph 69 Sub-section 10 Section XX "Transitional provisions" of the Tax Code of Ukraine, approved by Order of the Ministry of Finance of Ukraine № 225 as of 29.07.2022, did not provide any evidence to confirm existence of such circumstances, did not define the lawsuit’s grounds.

The Supreme Court noted that the Law of Ukraine № 2876-IX as of 12.01.2023 "On amendments to Section XX "Final Provisions" of the Tax Code of Ukraine regarding renewal of restriction of stay of gambling businesses on the simplified taxation system" does not contain direct instructions on making its rules retroactive in time, and therefore its effect does not extend to the period before it enters into force. In addition, liability established by Paragraph 90 Sub-section 2 Section XX of the Tax Code of Ukraine is applied to violation committed by the value added tax payers of deadline provided for in Paragraph 89 of this Section, i.e. it is directly related to the extended registration terms of tax invoices.

Tax violation in the form of untimely registration of tax invoices in the Unified register of tax invoices is ongoing violation, beginning of which is the day after the last (deadline) day for registration of tax invoice, and such violation ends on the day of actual registration of tax invoice.

Therefore, it is impossible to extend effect of Paragraphs 89, 90 to legal relationships that have been terminated (that is, tax invoices were compiled and registered in violation of the term defined by Paragraph 201.1 Article 201 of the Tax Code of Ukraine, before amendment made by the Law № 2876-IX).

Also, to conviction of the Supreme Court, the plaintiff misinterprets provisions of Paragraph 69.2 of 69 Section XX "Transitional Provisions" of the Tax Code of Ukraine, believing that legislator allowed conduction of in-place audits only in the part of in-place audits of declarations and clarifying calculations (in case of their submission) for which application for return of budget compensation amount has been submitted.

Cassation administrative court as a part of the Supreme Court as of 06.02.2024 in case № 160/10740/23 dismissed the plaintiff's cassation appeal; decision of the Dnipropetrovsk district administrative court as of 17.07.2023 and decision of the Third administrative court of appeal as of 22.11.2023 were left unchanged.