Audit of a French glass mabufacturer: what is wrong?

It is not the first time that a large French glass manufacturer has turned to the Business Ombudsman Council. Back in 2021, BOC helped the company exclude it from the risky taxpayers’ list. This time, the company disagreed with another tax audit findings. The tax authority allegedly established that the company had overestimated the VAT negative value amount included in the tax credit of the next reporting period by UAH 2 mn , as well as the budget compensation amounting to UAH 313,000. Thus, according to the STS, the company did not utilise energy resources (gas and electricity) used in the glass mass production (with simultaneous reflection of cullet formation and use) in its business activity.
The company provided all the necessary documents, but this did not help to get rid of the unjustified oppression.
The Council upheld the company’s position during the joint review of the complaint with the STS of Ukraine. The Council emphasized that the tax office did not provide a proper assessment of the economic operations of the company’s placing in property the cullet obtained in the course of production. The company confirmed that as a result of production, in addition to finished products, it received return waste (its own cullet), which was written off, but subsequently brought on charge and further remelted for finished products manufacturing. That is why it should be considered that the company used energy resources in its economic activity. The very next day after considering the complaint, the STS of Ukraine canceled tax notifications-decisions.
In general, 2023 was full of positive news for the French glass manufacturer. In a case with similar circumstances, we managed to help the company cancel tax notifications-decisions amounting to over UAH 4 mn.