Practice of court decisions in cases involving the State Tax Service

Press service of the State Tax Service of Ukraine, published 22 January 2025 at 11:06 Chapter: News

Court of appeal supported the controlling authority’s position regarding legality of adopted tax notifications-decisions in the amount of 62.2 million UAH.

Panel of judges, considering the case, established that general list of documents used during tax audit of the plaintiff is specified in Annex №4 to the audit report, which is integral part of it. Herewith, at the time of the plaintiff’s audit, primary accounting documents were never provided to the controlling authority in full.

Deciding the question of legality of applying to the taxpayer fines specified in Paragraph 120-1.2 Article 120-1 of the Tax Code of Ukraine, it should be determined whether such taxpayer committed unlawful inaction in the form of non-compiling tax invoice (which excludes the possibility of its indication by the controlling authority in the adopted tax notification-decision), or not registering already compiled tax invoice in the Unified register of tax invoices.

If at the time of detection of violation by the controlling authority, regardless of deadline missed by the taxpayer at the audit time, tax invoice was not compiled and, logically, was not registered, then these circumstances actually indicate the taxpayer’s ongoing illegal inaction, liability for which is provided for by norms of Paragraph 120-1.2 Article 120-1 of the Tax Code of Ukraine.

Court of appeal believes that by failing to fulfill obligation stipulated in the Tax Code of Ukraine, the plaintiff committed violation of tax legislation, liability for which is provided for in Paragraph 120-1.2 Article 120-1 of the Tax Code of Ukraine.

Moreover, it should be noted that the case materials do not contain any evidence of the plaintiff’s appeal to the controlling authority regarding his inability to prepare and, subsequently, register tax invoices within the time period established by the law, as a conscientious taxpayer who is aware of existence of violation on his part.

As a result, the panel of judges considers conclusions of the Court of first instance that the defendant did not provide evidence regarding existence of grounds with which the specified norm of Paragraph 120-1.2 Article 120-1 of the Tax Code of Ukraine allegedly necessarily links application of financial sanctions to such taxpayer (i.e., tax notification-decision drawn up based on the audit results by the controlling authority) to be erroneous and do not comply with norms of current tax legislation.

By the decision of Odessa district administrative court as of 30.07.2024 in case №420/6122/20, claim for recognition of actions as unlawful, recognition as unlawful and cancellation of tax notifications-decisions was partially satisfied; tax notification-decision, which imposed a fine of 15.3 million UAH for failure to register tax invoices in the Unified register of tax invoices, was canceled, and the other part of claim (claim for cancellation of decisions in the amount of 46.8 million UAH) was rejected. 

Court of appeal, by its Resolution as of 11.12.2024, overturned decision of the Court of first instance as of 30.07.2024 in respect of the satisfied claims and completely denied the plaintiff’s claim.