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Tax invoices worth UAH 5 mn. registered

02.03.2021

Complainee: The State Tax Service (STS)

Complaint in brief: The BOC received a complaint from a Kyiv-based agricultural company. The company complained that the STS did not enforce the court decision on VAT tax invoices registration for 2018. The company challenged the STS inaction in court, which ordered the tax authority to register the complainant's invoices on their submission dates. However, the tax authority did not enforce the court decision, which had come into force. That is why the agricultural company turned to the Business Ombudsman Council for help.

Actions taken: After examining the circumstances of the case, the investigator found the complaint substantiated. The Council recommended that the STS immediately register the company’s tax invoices. At first the tax authority assured that court decisions were already in progress of enforcement. However, when the complainant checked information in the taxpayer’s e-office, it turned out that invoices had not been registered. The BOC several times addressed the STS in writing, emphasizing the need to adhere to the rule of law, according to which a court decision that had entered into force was binding. It later cleared up that the tax authority did not register invoices due to the lack of a registration limit on the complainant's electronic SEA VAT account. Due to invoices suspension, the company's registration limit amount did decrease, but the indicator of “SExcess” in SEA VAT increased and amounted to UAH 5 mn. This amount was sufficient to register all tax invoices in accordance with court decisions. In communication with the STS, the BOC investigator noted that in such a situation, the tax legislation allows to register invoices at the expense of this indicator. At the same time, the STS representatives insisted that the registration of tax invoices at the expense of “SExcess” indicator value was impossible due to suspension of such registration by SEA VAT. In further communication with the STS, the BOC stressed that the defendant in the court decisions was not SEA VAT as an information system, but the STS of Ukraine as a public authority in charge of VAT administration. In addition, the STS of Ukraine, as the SEA VAT administrator, is able to check system algorithms and find out why SEA VAT prevents registration of tax invoices as determined by court decisions and ensure their proper implementation.

Result achieved: Finally, after ten months of complaint consideration, thanks to the effective interaction of the BOC and the STS, the latter enforced the court decision and registered the company’s tax invoices worth UAH 5 mn. The case was successfully closed.