Agro-exporter’s audit findings dropped

Tax issues: Criminal proceedings against business initiated by State Fiscal Service Kyiv

Complainee:  The Main Department of the State Tax Service in Odessa Oblast (MD STS)
Complaint in brief: The Business Ombudsman Council received a complaint from an agricultural products exporter who disagreed with tax audit findings. According to the MD STS, the company overstated the VAT, subject for reimbursement, and the VAT negative value amount included in the next reporting period amounting to UAH 542,767. The company appealed the tax authority’s conclusions and managed to cancel its decision. However, inspectors soon re-audited  the company and fined it again. This time tax officers found discrepancies in primary documents for grain storage. The company asked the BOC for assistance. 
Actions taken: The investigator examined the case file and found the complaint substantiated. The Council recommended that the State Tax Service of Ukraine ensure a full, comprehensive and impartial review of the company’s complaint. The BOC asked the tax authority to explain why it overturned the decision to reduce the VAT amount.
Among other things, the Council noted that shortcomings in documents could not be the ground for conclusions about  business transactions and did not affect the tax credit formation.
Result achieved: The State Tax Service accepted the Council’s recommendations and canceled tax audit results along with the fine. The case was closed.

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