Long fight for data tables: a story of Odesa company

Tax VAT invoice suspension Odesa region

The Odesa company, which manufactures various products from polyethylene and polypropylene, complained to the Business Ombudsman Council that the regional tax office did not accept the tax payer’s data table.

The complainant has been submitting data tables since the end of 2022, but the Commission of the regional level under the STS in Odesa region (Commission of the regional level) refused to accept them each time for various reasons. In particular, in the first refusal to take into account the data tables, tax officials indicated that the types of activities given in the table did not correspond to the company’s existing fixed assets. Later, the reason for the data table non-acceptance was existing tax information, which indicates that the company carries out risky operations. In the last refusals, the Commission of the regional level referred to paragraph 14 of the Decree No. 1165, which contains a general provision on the need to submit a table of data with an explanation, which indicates the type of activity, with reference to the tax and other reporting information of the tax payer.

While processing the company’s complaint, the Council turned to the communication platform of the STS in Odesa region and organized a meeting with its responsible officials. As a result of the meeting, it was found that the reason for not accepting the complainant’s data tables was the negative VAT value and the lack of payment of income tax. The tax office reported that the prerequisite for taking into account the data tables is that the company must show positive dynamics in paying the specified taxes within the next 3 months from the date of the meeting.

The complainant provided the Council with an explanation and the supporting documents specifying thst the negative value of VAT had a justified origin, namely formed due to the import of production equipment and raw materials for the production of goods.

2 months later after the meeting with the regional STS office, the company showed positive dynamics in reducing the negative value of VAT,  and following the Council’s recommendations the complainant resubmitted the data tables. However, based on the results of their examination, the regional tax office once again refused to accept them, this time the reason was that the company cooperated with a supplier, which, in the opinion of the STS, was a risky one. The complainant explained that cooperation with this counterparty took place long before it was recognized as risky. Therefore, such a situation clearly demonstrated the problem of virality of the risky status of tax payers, that a whole chain of other supposedly risky tax payers can be artificially spun through one risky counterparty.

Since at that time the administrative appeal of decisions concerning non-acceptance of data tables had already been introduced, the Council recommended the complainant to use this opportunity. At the same time, previously (before the company submitted a complaint to the central level commission), the Council decided to discuss the complainant’s situation at the meeting of the Expert group with the State Tax Service of Ukraine (STS of Ukraine).

Considering that at the meeting with the STS, the latter had no objections about the complainant’s activities, the company, following the Council’s suggestion, appealed to the central level commission about the tax decision on non-acceptance of data tables.

The result was ultimately positive – the STS satisfied the company’s complaints and accepted the data tables. In addition, the complainant informed the Council that, after BOC involved in solving its problem, its tax invoices were registered with no obstacles. In particular, the company revealed that while the Council was supporing the company and investigating the case,  it managed to register invoices for UAH 2.2 mn.

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