Subject of complaint: The Main Department of the State Fiscal Service of Ukraine in Kharkiv Oblast (SFS)
Complaint in brief: The Council received a complaint from a Kharkiv-based manufacturing company. The Complainant disagreed with the tax audit findings according to which it had to additionally pay almost UAH 700k.
The SFS questioned the reality of transactions of the Complainant with one of the contractors. According to the tax authority, the counterparty had no technical capacity and sufficient personnel to unload the cars with rubble. In particular, the SFS calculated the contractor had only 10 employees, half of whom were women. In addition, the SFS pointed out the works were performed in Kharkiv Oblast, while the counterparty was registered in Odesa.
Disagreeing with the tax authority conclusions, the company appealed its decision and asked the Council for support.
Actions taken: Having carefully studied case materials, the Council upheld the Complainant’s position and asked the SFS in writing to thoroughly and impartially consider the company’s complaint. The investigator stressed it was not the
Complainant that should defend itself but the supervisory authority had to prove violations based on facts from primary documents, reconciliations with the counterparty and examinations findings. In addition, the Council’s investigator also presented the relevant judicial practice of the Supreme Court, which testified in favor of the Complainant.
Given the fact the tax authority findings were based only on assumptions, the Complainant was able to prove the reality of transactions of unloading cars with the rubble.
Result achieved: The SFS accepted the Complainant’s and the Council’s position that the tax authority negative information on the taxpayer could not be the ground for conclusions about fictitious nature of economic transactions. Additional VAT payment worth UAH 673k was canceled. The SFS emphasized in its decision that it was the supervisory authority obligation to prove the charge was lawful.
The Complainant thanked the Council for assistance. The case was closed successfully.
