BOC helps one of the world’s biggest clothing retailers avoid huge tax penalties

Tax issues: Inspections by state tax and fiscal agencies Kyiv

Subject of complaint: The Pechersk District State Tax Inspection (Pechersk STI), under the Main Department of State Fiscal Service in Kyiv 
Complaint in brief: On March 9, 2017, TOV GAP Ukraine, a subsidiary of one of the world’s biggest clothing retailers, addressed the BOC to help challenge a baseless tax notification issued by the Pechersk STI over a supposedly late submission of the company’s 2015 corporate profit tax declaration. 
The penalty for late submissions is only UAH 170, but by rejecting the Complainant’s tax report, the Pechersk STI was challenging the accuracy of GAP Ukraine’s calculations and payment of corporate profit tax for the entire accounting period, which threatened the Complainant with considerable additional penalties. 
Action taken: During his investigation of the complaint, the BOC investigator found that the SFS agency had no basis for rejecting the Complainant’s 2015 tax declaration. 
The BOC investigator then requested that the SFS ensure an unbiased administrative hearing of the complaint. Next, the investigator took part in the administrative hearing at the SFS of Ukraine. He also asked the MD SFS in Kyiv to verify whether the Pechersk STI had informed Complainant in writing about any issues with the tax declaration, in accordance with Tax Code procedures for corresponding with taxpayers.
In its reply to the BOC’s request, the MD SFS informed the Council that the Pechersk STI had not notified the Complainant about issues with GAP Ukraine’s tax declaration and had thus violated the procedure.
The BOC investigator passed this information along to the SFS to include it in making a decision in the Complainant’s case.
Result achieved: On April 14, the SFS informed the Council that the Complainant’s claim had been satisfied and the penalty dropped. This helped the Complainant to avoid possible serious fines related to the rejection of its 2015 corporate profit tax declaration. The BOC closed the case less than in a month.

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