For a long time, specialists of our Law Firm have been providing comprehensive assistance to Clients in the field of unblocking tax invoices and adjustment calculations, hereinafter referred to as “TI” and “AC” respectively. In addition, experience has been gained in appealing decisions of the State Tax Service of Ukraine on the taxpayer’s compliance with risk criteria. It should be noted that we recommend and focus Clients’ attention on a comprehensive approach to issues that arise when Clients calculate value added tax.
Our Clients who use legal outsourcing services know that the very first step to correctly accounting for tax liabilities is to use systematic and preventive measures aimed at forming a proper tax reputation of the business. We recommend taking such measures in order to minimize the likelihood of a taxpayer being classified as a person who meets the risk criteria. These measures also reduce the likelihood of suspension of registration of TI/AC. As experience shows, in most cases, it is the improper use of the aforementioned preventive measures that ultimately leads to the so-called blocking of TI/AC.
A. Suspension of registration of tax invoices and adjustment calculations and submission of explanations
However, due to various reasons, as well as due to the opaque and ambiguous mechanism for suspending the registration of TI/AC, which does not exclude the human factor on the part of the State Tax Service authorities, almost all business entities from time to time encounter the above phenomena of suspension of registration of tax invoices and adjustment calculations.
In this case, a more optimal and correct solution would be for the payer to engage a competent lawyer at the stage of preparation for submitting explanations, additional explanations, legal analysis of documents and information that will be submitted to the regional-level commission to make a decision on registration of TI/AC.
It is extremely important at this stage to clarify the real reasons for blocking TI/AC, as well as the reasons for classifying the taxpayer as a person who meets the risk criteria, if this has happened.
Early involvement of a specialist in the legal field will ensure the formation of an appropriate legal position, which will contribute to both increasing the likelihood of registering the TI/AC and the stage of providing explanations, and will create the necessary conditions for a successful subsequent appeal of the decision, in the event that the regional commission makes a decision to refuse to register TI/AC.
B. Administrative and judicial appeal of decisions of regional-level commissions
In administrative proceedings, taxpayers have the right to appeal the decision of the regional commission on the taxpayer’s compliance with the risk criteria, the decision to refuse to register TI/AC, as well as the decision to disregard the taxpayer’s data table. Despite some skeptical assessments regarding the need to file complaints against the specified decisions of regional commissions, as a general rule, we consider it desirable and useful to form and submit substantiated complaints together with the relevant documents. Complaints in administrative proceedings allow you to form a position for the legal protection of the taxpayer’s interests, provide an opportunity to collect and prepare appropriate evidence of the illegality of the decision made by the commission in advance, and also allow you to protect the taxpayer’s rights in the pre-trial resolution of the dispute.
The legislation establishes a period of 10 business days for the taxpayer to file the above-mentioned complaints, which follow the date of adoption of the relevant decision by the regional-level commission.
At the same time, all the above-mentioned decisions of regional-level commissions can be appealed in court within the terms specified by the Code of Administrative Procedure of Ukraine. Thus, for judicial appeal of decisions that were appealed by the taxpayer in administrative procedure, a three-month period is established from the date of delivery to him of the decision on the results of consideration of his complaint. If the decision was not appealed in administrative procedure, the taxpayer has the right to use the six-month period for judicial appeal from the moment he learned or should have learned about the violation of his rights, freedoms and interests.
As the experience of protecting Clients’ rights shows, the judicial mechanism for appealing decisions of regional-level commissions is much more effective, even taking into account the long terms of consideration of claims by the courts.
C. Enforcement of court decisions on appeals against decisions of regional-level commissions
The vast experience of appealing decisions of regional-level commissions shows that the State Tax Service of Ukraine very often, without any legal grounds, delay or ignore the need to execute a court decision.
In order to properly execute court decisions and truly protect the rights of taxpayers, the Firm’s lawyers ensure their forced execution, including by bringing to justice officials of the State Tax Service of Ukraine who have committed unlawful inaction.
