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Court decision enforced: registration limit of Luhansk energy company increased by UAH 212 mn

07.09.2020

Complainee: State Tax Service of Ukraine (STS)

Complaint in brief: The Council received a complaint from an energy enterprise from Luhansk. The company complained about the fact that the STS did not enforce the court decision that had entered into force. It turned out that the tax authority did not automatically increase the company’s registration limit in the amount of over UAH 200 mn in accordance with the submitted tax declaration for June 2015. The STS argued that such an increase was made by the controlling authorities only once until July 31, 2015 while the complainant submitted the VAT declaration for June 2015 only in September 2016. It should be noted that due to carrying out business on the territory of the ATO, the complainant was able to submit the declaration for June 2015 only in August 2016. This fact was confirmed by the respective certificate of the Ukrainian Chamber of Commerce and Industry.
Back in 2018, the enterprise asked the STS to voluntarily enforce the court decision, however the controlling authority did not give any response to the complainant. Even when the decision was sent  to the Department of Compulsory Enforcement of Decisions of the State Enforcement Service Department of the Ministry of Justice, the tax service avoided  complying with the decision. In this regard, the energy company also appealed to the police, but tax authorities had not enforced the court decision in the complainant’s case for two years already. At this stage, the case consideration was commenced by the Business Ombudsman Council.
 

Actions taken: The investigator of the Council acknowledged the complaint was substantiated. The Council recommended the STS to ensure enforcement of the court decision in the complainant’s case and increase the tax amount for which the energy company is entitled to register its tax invoices. Under the Memorandum of Partnership and Cooperation between the Business Ombudsman Council and the STS, the Council brought up the complaint for consideration at the expert group meeting with the participation of the STS administration.

Results achieved: Having upheld the Council’s recommendations, the tax authority finally enforced the court decision. The STS increased the company’s registration limit for the amount of over UAH 212 mn.
“We sincerely thank the Business Ombudsman Council for the assistance provided and a consistent and professional approach in resolving the disputed issue. We hope for further cooperation in settling problematic issues that may arise in the company’s business activity in the future" thanked the complainant. The case was successfully closed.