A company operating in the wholesale food trade sector had its negative VAT amount reduced by nearly UAH 18 million by the tax authority following an unscheduled non-site audit. Later, based on the results of a desk audit, the tax authorities issued another decision, referring to an alleged arithmetic (methodological) error, and effectively confirmed the claim for the same amount.
The tax authority justified its conclusions by alleging that the taxpayer failed to provide documents in response to the supervisory authority’s requests. However, the business insisted that it had not refused to cooperate — the problem was that the taxpayer did not receive the tax authority’s requests in a manner that would have allowed it to respond in time.
The company had chosen electronic correspondence through the Electronic Cabinet, but the tax authority acted inconsistently: some documents were sent by mail, while others were delivered through the Cabinet. At the same time, the supervisory authority did not provide proper evidence that the documents had been served on the taxpayer in the prescribed manner. The business also emphasized that one of the earlier decisions was already being appealed, so using it as an “indisputable basis” for new conclusions was premature.
The Council contacted the central office of the State Tax Service and clearly set out its position: before drawing conclusions about a “failure to provide documents,” the tax authority must prove that it duly notified the taxpayer and served the documents in accordance with the electronic format chosen by the taxpayer. The Council also stressed that new assessments cannot be based on a decision that is still under appeal. To protect the complainant, the Council sent an official letter and joined the administrative review.
As a result of the administrative appeal, the tax service revoked the decision to reduce the negative VAT amount and upheld the company’s complaint.
