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Is your real business on a risky list? What can you do?

04.10.2019

Subject of complaint: The Main Department of the State Fiscal Service in Kyiv city (SFS) 
 
Complaint in brief: A company specializing in industrial machinery installation complained to the Council about having been unreasonably put on the risky taxpayers list by the SFS. 
 
The legislation allows fiscal authorities to attribute businesses with negative tax information to risky taxpayers list. The acquisition of such a status has extremely burdensome consequences for a taxpayer. First of all, such company’s tax invoices are likely to be “blocked”. And counterparties usually refuse to cooperate with companies having trouble with such tax invoices registration. 
 
The Council sometimes receives complaints where “risky” signs can be discerned with the naked eye. For instance, the company is registered as a titular CEO or a “mass registration” address is used. 
 
However, this complaint came from a real business. The company CEO was concerned about the situation and did not know what to do. In addition, the SFS was not quick to explain the reasons for its decision to the company in detail and argue the need for chosen actions. 
 
Actions taken: The Council asked the SFS to explain in detail why the company had been put on the risky taxpayers list. Not having received the answer on the merits, the investigator addressed the tax office again requesting to analyze whether the grounds to qualify a real enterprise as risky were sufficient. 
 
In addition, the investigator arranged and participated in a working meeting with the SFS representatives to discuss the company’s issue. As it turned out, the tax authority doubted the fact the company was located at the address of registration and received postal correspondence. During the meeting, the Complainant proved the company was indeed located at the specified address and offered SFS representatives to visit the company’s office and production facility.

He also confirmed readiness to receive a request for information from the tax authority and respond to it. 
 
Result achieved: The SFS admitted its conclusions were premature and removed the company from the risky taxpayers list. The Complainant can operate as usual again.