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SFS drops additional payment worth almost UAH 7 mn for sweets manufacturer

12.08.2019

Subject of complaint: Large Taxpayers’ Office (LTO) 

Complaint in brief: The world's leading producer of sweets approached the Council. The company disagreed with the tax audit results, according to which it had to additionally pay almost UAH 7 mn. 
 
LTO doubted the fact sweets manufacturer was actually ordering marketing services for promoting its products. In particular, in the tax authority’s view, promos were held by unidentified persons free of charge. Accordingly, Complainant's transactions with the marketing agency were treated as fictitious.

According to the company, the ground for the audit was open criminal proceedings against the marketing agency counterparty. Disagreeing with the tax authority position, the company appealed the decision in the State Fiscal Service and turned to the Council for help.
 
Actions taken: After reviewing the circumstances of the case, the investigator addressed the SFS in writing. The investigator found out the Complainant’s legal position was in line with the Supreme Court and the SFS positions based on similar cases consideration results. The Council gave a legal assessment of the Complainant’s facts and evidence and added its own arguments in support of the Complainant’s position. In particular, the Council payed attention to necessity of compliance with the taxpayer personal responsibility principle and absence of court judgments that came into force with respect to partners of the Complainant's counterparty.
 
Result achieved: The SFS accepted the Council's arguments and satisfied the company's complaint. The fines and additional charges were dropped and the case was closed successfully.