Large Taxpayer Office drops company’s technical debt

Subject of complaint: Large Taxpayer Office of the SFS (LTO)
Complaint in brief: On September 21, 2017, a global manufacturer of escalators turned to the BOC with a complaint about the LTO. The company was complaining about a tax audit certificate, according to which it was required to pay taxes and a fine of more than UAH 1.5mn.
In 2013, the company made an advance payment of profit tax that resulted in an overpayment. This, the company used to cover subsequent liabilities for March-July 2014. However, the automated SFS system calculated a debt and penalties on profit tax worth more than UAH 1.5mn. The system did not calculate the tax liabilities as being paid using the firm’s overpayment.
The Complainant objected to this approach and appealed to a major business association in 2016. With its help, the company signed an act of reconciliation with the LTO that affirmed that the Complainant had no tax liabilities before the budget. However, in 2017, the situation repeated itself, and the SFS once again saw a “technical debt” in its system. It was then that the Complainant turned to the BOC.
Actions taken: The BOC investigator participated in an administrative hearing of the complaint at the SFS office. He pointed out that the company had overpaid in 2013 and the SFS verification report in 2016 confirmed this. Specifically, the investigator appealed to the fact that the budget received appropriate tax revenues, and that a change in the algorithm for processing the taxpayer’s integrated card was not a valid reason for imposing fines on the Complainant.
Result achieved: With the assistance of the Council, this fairly commonplace situation for business was handled at the level of the SFS of Ukraine. On November 3, the Complainant informed the Council that the SFS had complied with his request and canceled the fine.