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UAH 10 mn returned to company’s account 

02.01.2020

Complainee: The State Fiscal Service of Ukraine (SFS) 
 
Complaint in brief: A transport company complained against the SFS, which failed to comply with the court decision to renew the registration limit amounting to over UAH 10 mn.
 
The local tax authority cancelled the complainant’s registration as a VAT payer, due to enterprise allegedly not being located at the specified address. At the time of the complainant’s registration cancellation, there was over UAH 10 mn on his electronic account. These funds disappeared from the complainant’s account in the VAT electronic administration system. A month later, the complainant’s registration as the VAT payer was renewed by the tax authority, yet the funds were not returned to the account. 
 
The complainant appealed to court. The administrative court obliged the SFS to return UAH 10 mn to the enterprise’s electronic account – it was the tax amount the Complainant was entitled to register tax invoices for. 
 
However, even after the court judgment entered into force and was subject to enforcement, the SFS was in no hurry. According to the complainant, the SFS ignored all the written appeals of the company for six months. The complainant even applied to the State Enforcement Service (SES) to enforce the court decision. The SES initiated enforcement proceedings based on the complainant’s application, however to no avail. Feeling desperate about solving the problem on its own, the company sought the Council’s assistance. 
 
Actions taken: The Council recommended in writing that the SFS enforce the court decision - to return funds to the company’s account. In reply thereto the response was: “The court decision will be enforced in accordance with the established procedure and its enforcement mechanism”. However, no specific actions or payments in favor of the complainant were made. The Council’s investigator had to bring the case file to the consideration of the SFS Expert Group and the Council. 
 
Result achieved: It worked, the SFS accepted the Council's arguments. The complainant informed the tax authority had finally enforced the court judgement. The funds were returned to the company’s electronic account in full. The case was closed successfully.