The company mistakenly paid over UAH 1 million to the account for corporate profit tax on income paid to non-residents, although it had no such tax liabilities. The business repeatedly submitted applications to the tax authority requesting that the funds be transferred to the correct account — for payment of corporate profit tax.
The tax authority stated that the correctness of the payment of tax on income paid to non-residents could only be verified during a documentary audit. The business was ready to undergo such an audit and officially applied to the tax authority to have it conducted in order to resolve the issue with the transfer of funds. However, the tax authority only informed the company that it had been included in the audit schedule, without addressing the transfer of funds on the merits. Over four months, the company repeatedly contacted the tax authority with applications, trying to resolve the issue on its own, but to no avail.
The Business Ombudsman Council reviewed the complaint and pointed out to the tax authority that the law does not make an audit a mandatory condition for transferring mistakenly paid funds. Under Article 43 of the Tax Code of Ukraine, a taxpayer has the right to determine the direction of such transfer.
The Council also initiated a joint online meeting with the company and the tax authority. During the meeting, the Council emphasized that, in addition to the fact that an audit is not a mandatory condition for transferring the funds, a long wait would lead to the depreciation of a significant amount, which was in the interests of neither the business nor the state.
Following the Council’s intervention, the tax authority nevertheless conducted the audit earlier and found no violations. On the Council’s recommendation, the company resubmitted its application to transfer the funds.
As a result, over UAH 1 million was transferred to the correct account for payment of corporate profit tax.
