Complainee: Main Department of the State Tax Service in Kyiv City (MD STS)
Complaint in brief: The agricultural company and the grain exporter to more than 30 countries appealed to the Council. The enterprise complained that in the course of the tax audit, the MD STS refused to provide VAT budget refund in the amount of UAH 11 mn. Such a decision was grounded on the fact that the enterprise had allegedly violated the Tax Code: for technical reasons the complainant did not indicate the amount of the VAT in a section “payment purpose” to the counterparties. Nevertheless, in the additional letter to the suppliers the enterprise clarified the VAT amount to be paid. The complainant asked the MD STS to reconsider the results of the tax audit. At this stage, the Business Ombudsman Council started investigation of the complaint.
Actions taken: The Council acknowledged the complaint was substantiated and recommended the MD STS to fully, comprehensively and impartially consider the complainant’s objections regarding the tax audit conclusions. The investigator highlighted that the current legislation does not specify the need to indicate a separate amount of VAT in the requisites of the “payment purpose” of payment orders. In particular, the fact that the complainant separately confirmed the inclusion of the VAT amount in the payment to the counterparties, was fully justified, corresponds to the norms of the current legislation and is confirmed by the explanations of the National Bank of Ukraine and the case law.
Results achieved: The MD STS implemented the Council’s recommendations. As a result, the tax authority reconsidered the audit conclusions, and the complainant received the VAT refund in the amount of UAH 11 mn. The case was successfully closed.