Construction company loses a risky taxpayer’s status

Complainee: Main Department of the State Tax Service (MD STS)
Complaint in brief: The Council received a complaint from the company registered in Kirovohrad region. The enterprise disagreed with the tax decision on its compliance with the taxpayer’s risk criteria. The decision received by the complainant in the e-cabinet, was rather general in substance, and therefore it was unclear why exactly the tax authority considered the enterprise to be a VAT risky taxpayer.
In spite of the fact that the complainant submitted the explanations along with the relevant documents to the MD STS with the purpose to confirm the reality of itsbusiness activity, it could not achieve neither the tax decision review, nor at least getting more details on the reasons for its inclusion in the risky taxpayers’ list. Thus, the company solicited help from the Business Ombudsman Council.
Actions taken: Having examined the case materials, the investigator supported the position of the construction company and acknowledged the complaint was substantiated. The Council recommended the MD STS to objectively, comprehensively and thoroughly consider its explanations and newly submitted documents, and exclude the enterprise from the risky taxpayers’ list. Otherwise the Council asked the tax authority to provide exhaustive and substantial information on the reasons for compliance of the company with the taxpayer’s risk criteria
As the result of the MD STS processing of the Council’s appeal, it was revealed  that the real grounds for taking the decision on compliance of the construction company with the risky criteria was the fact of its absence at the registered legal address that was recorded by the MD SFS in Kirovohrad region.
After receiving this reply, the complainant repeatedly appealed to the MD STS having added copies of the Lease Agreement and the Form №20-OPP, and informed about its readiness to receive tax officials in order to prove the company’s real location. The Council, in turn, asked the tax authority to immediately update information on the complainant’s location.
Result achieved: The MD STS updated the information about the construction company’s current legal address and excluded it from the risky taxpayers’ list. The case was successfully closed within a month after the complaint was received by the Council. This became possible due to a prompt response of the tax authority to both Council’s requests.