Court supported the controlling authority’s position regarding legality of accrual of tax liabilities and fines from the excise tax to the taxpayer

Press service of the State Tax Service of Ukraine, published 21 June 2024 at 14:29 Chapter: News

Cassation court supported the controlling authority’s position regarding legality of adopted tax notifications-decisions, which charged the plaintiff with tax liabilities and fine (financial sanctions) from the excise tax, which is subject to assessment and payment to the budget. 

Supreme Court came to the conclusion that during new case consideration, courts should take into account above specified, investigate disputed legal relationships, primary accounting documents and establish whether the plaintiff allowed volume of sold fuel to exceed the calculated volume, according to Paragraph 232. of Article 232 of the Tax Code of Ukraine, without registering the corresponding applications for replenishment of remaining fuel amount in the System of electronic administration of fuel sales.

The court notes that accounting is obligatory type of accounting maintained by the enterprise. Financial, tax, statistical and other types of reporting that use monetary measure are based on accounting data (Paragraph 2 Article 3 of the Law of Ukraine № 996-XIV as of 16.07.1999 "On accounting and financial reporting in Ukraine").

Procedure for organizing and performing work related to acceptance, transportation, storage, release and accounting of commercial oil and petroleum products is established by the Instruction on the procedure for acceptance, transportation, storage, release and accounting of oil and oil products at enterprises and organizations of Ukraine, approved by Order of the Ministry of Economy of Ukraine, Ministry of Transport and Communications, Ministry of Fuel and Energy, State Committee on Technical Regulation and Consumer Policy № 281/171/578/155 as of 05.20.2008  (hereinafter – Instruction № 281/171/578/155).

Sub-paragraphs 4.2.5.4-4.2.5.6 Paragraph 4.2 of the Instruction № 281/171/578/155 provide that for remote control of fuel dispensers, technical means must be used that belong to the composition of specialized electronic control and cash registers entered in the State register of electronic cash registers and computer systems of Ukraine for use at gas stations. Specified means must meet technical requirements for specialized electronic control and cash registers for use at gas stations and ensure registration of funds and provision of settlement documents in a single technological cycle with release of petroleum products.

Supreme Court emphasized that after sale of petroleum products, data of counter of the total accounting of fuel dispensers, control system of fuel dispensers and registrars of settlement operations act as one unit and should not have data discrepancies of more than 0.1%. As a result, data on sold fuel according to accounting data must correspond to data of registrar of settlement operations, which is the carrier of evidentiary information about circulation of fuel at gas stations.

Along with this inventory operation in which value of calculated balance is brought to the actual availability by adding unaccounted goods in the taxpayer's accounting can be established solely on the basis of primary documents.

In turn, the turnover and balance sheet are not primary accounting documents in the sense of the Law of Ukraine "On accounting and financial reporting in Ukraine", the turnover and balance sheet is a consolidated accounting document that is actually formed on the basis of primary documents for control, generalization and regulation of data processing.

Courts stated that the plaintiff's presence of excise invoices, their registration, as well as other accounting documents are not unconditional proof of legality of the plaintiff's actions in this legal relationship in the presence of other circumstances that indicate unreliability of information in these documents.

Therefore, Cassation administrative court as a part of the Supreme Court on 28.05.2024 in case № 826/11557/18 dismissed the plaintiff's cassation appeal; decision of the District administrative court of Kyiv city as of 08.09.2022 and decision of Sixth administrative court of appeal as of 30.05.2023 were left unchanged.