SFS approves classification of equipment and drops additional payment to sweets manufacturer 

Tax issues: Inspections by state tax and fiscal agencies Sumy region

Subject of complaint: Large Taxpayers’ Office of the SFS (LTO) 
Complaint in brief: On November 13, 2018, a Ukrainian company, belonging to the group of the world’s largest chocolate products, cookies and sweets producer appealed to the Council. The Complainant did not agree with the tax inspection conclusions. 
In 2016, the company purchased a cookies packaging machine and imported it, according to the imported goods classification, at a zero duty rate. The equipment started running, products appeared on shelves.
However, in two years, the LTO decided to carry out an inspection whether the classification of equipment was performed correctly. Insisting on the fact that the packaging machine had to be imported at a rate of 2%, the tax authority additionally charged UAH 140k to the company in taxes. 
Disagreeing with the tax authority conclusions, the company appealed them in the SFS of Ukraine and turned to the Business Ombudsman Council. 
Actions taken: The Council’s investigator analyzed the case materials and upheld the Complainant’s position in writing. In addition, he participated in the consideration of the case at the SFS of Ukraine. During the hearing, the parties agreed that the Complainant would provide tax authorities with additional documents and cookies packaging process photos confirming correct classification of goods. 
Result achieved: Having received the mentioned documents and photos, the SFS of Ukraine accepted the position of the company and dropped the additional payment. The case was closed successfully.

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