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Mykolaiv and Kherson Oblast State Fiscal Service release UAH 90 million VAT refund

10.02.2016

Subject of Complaint: State Fiscal Service offices in Mykolaiv and Kherson

Complaint in brief: On August 26-28, 2015, the BOC received complaints from two companies of the same agricultural holding about the systematic VAT refund delays on behalf of the SFS.

The first Complainant's company from Mykolaiv had applied for a refund of UAH 27.0 million VAT in 2014, however, as of July 2015, SFS did not refund UAH 8.5 million of the stated amount.

Another Complainant's company of the stated holding from Kherson Oblast, at the time when they lodged the complaint, had UAH 31.9 million of pending VAT refund for 2014-2015. Of the stated VAT amount, UAH 19.6 million was subject to automatic refund, which the Complainant did not receive. Both Complainant companies also stated that unidentified persons offered them ‘facilitation services’ to expedite the stated VAT refund, in exchange for bribes.

Action taken: The BOC experts discovered that the information requests for refunding the Complainants’ VAT were declined by the Treasury Department due to the ‘exceeded budget allocations for VAT refund’. The BOC investigator then sent a formal inquiry to the Head of the SFS of Ukraine, emphasizing that the stated actions of the Treasury violated the current legislation and asking for the explanation and for the long-overdue VAT refund. Additionally, our investigators processed the stated complaints during the working group meeting between the BOC and the SFS, within the framework of the signed Memorandum of Partnership and Cooperation.

Result achieved: Following the BOC’s intervention, the Complainant's company in Mykolaiv received UAH 54 million of the UAH 66.7 million of the overdue VAT accrued during 2014-2015. The Complainant's company in Kherson received UAH 37.3 million of the overdue VAT for 2014 and the 8 months of 2015.