Non-compliance with risky taxpayers’ criteria: tax authority reconsiders a controversial decision

1.10 VAT risky taxpayer Kharkiv region

Complainee: State Tax Service (STS), Main Department of the STS in Kharkiv region (MD STS)
Complaint in brief: The Council received a complaint from an enterprise selling electrical equipment and household appliances. The company complained about suspension of registration of the tax invoice, as a result of which the tax authority included the company in the risky taxpayers’ list. Like the majority of our complainants, the enterprise learned about it accidentally – in the personal e-cabinet of the taxpayer.
The controlling authority identified that the company complied with the risky taxpayers’ criteria due to its contractor having been involved in risky operations. There was no information on what kind of operations was mentioned. The company’s attempt to contact the representatives of the MD STS and find out the reasons for such a decision did not bring any result.
The enterprise sent additional documents to confirm the reality of transactions via the e-cabinet of the taxpayer. As is known, the complainant timely paid amount of taxes in full and was not a debtor.
Not having received a response from the tax authority, the complainant solicited help from the Business Ombudsman Council.
Actions taken: Having examined the company’s case file, the investigator acknowledged the complaint was substantiated. The Council appealed to the MD STS and asked to provide arguments on the reasons why the company was included in the risky taxpayers’ list. Apart from that, the Council asked for a more detailed examination of the documents in favor of the taxpayer’s good business practices.
Results achieved: The MD STS additionally analysed the situation, examined the submitted documents of the complainant and changed its position in regard to the enterprise’s actions. The company was excluded from the risky taxpayers’ list. The case was successfully closed.

Next case:: Construction completed — the company receives a long-awaited certificate from DABI