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Agricultural company's right to budget refund worth UAH 1.3 mn confirmed

19.01.2023

An agricultural company from Chernihiv Oblast submitted all the necessary documents, including a correctly filled out tax return for a budget refund. However, the tax authority, having conducted an audit, found a violation of the law by the company when declaring a negative VAT value.  Thus, the tax authority denied the complainant the right to budget refund amounting to UAH 1.3 mn. The tax authority substantiated its decision by "the company's unbalanced policy in maintaining organizational and economic relations."

Within days after receiving the complaint, the Council prepared a letter to the State Tax Service (STS) in support of the complainant. In it, BOC noted that the tax authority should not assess the expediency of expenses, ordering certain services or goods by the taxpayer. The Council stated that the economic entity carries out its economic activity at its own risk, which means its responsibility for the effectiveness and expediency of the decisions made, it independently decides exactly what expenses it needs to bear to ensure its activity, and the right to independently choose service providers. And this factor is beyond the tax authority control. The Council asked the STS to consider the complaint in detail and impartially. As a result of the hearing with the participation of BOC investigator, the tax authority canceled the respective tax notification-decision.