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Tax inspection — another error

16.09.2020

Complainee: State Tax Service (STS), Main Department of STS in Kyiv City (MD STS)

Complaint in brief: A construction company from Kyiv appealed to the Council. The enterprise rents several land plots outside Kyiv for which, according to the legislation, it pays taxes at the non-core place of registration. In June 2018, the complainant сoncluded a rental agreement for one more land plot in a different region. In the tax return clarifying the land payment for 2018, the company made a mistake, indicating the controlling authority at the main location. When the complainant found out about the mistake, it submitted a clarifying calculation to the declaration following the legislation requirements and a consultation with the MD STS official. The company also added bank statements that confirmed timely payment at the land plot location. However, as explained by the tax authorities, declaring the obligation at the main place of registration (even if the error is corrected after some time) automatically triggered a mechanism of charging penalties for late land payment at the main place of registration. The company decided to appeal against the decision of the tax authority with the support of the Business Ombudsman Council.

Actions taken: Having examined the case file, the investigator acknowledged the complaint was substantiated. Despite the quarantine restrictions, the Council managed to arrange the complaint’s consideration remotely jointly with the representatives of the complainant and the STS administration. The Council recommended the STS to ensure full, comprehensive and impartial consideration of the company’s complaint and cancel the tax decision.

Results achieved: The tax authority upheld the Council’s recommendations and satisfied the complaint of the construction company. The additional payments were dropped. The investigator successfully closed the case.