SFS cancels taxes and penalties for UAH 630 mn, additionally charged to a machine-building plant

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

Subject of complaint: State Fiscal service (SFS), Large Taxpayers Office (LTO) 
Complaint in brief: On 30 March 2018 a leading Ukrainian machine-building company approached the BOC because it did not agree with additional taxes and fines charged by the SFS worth UAH 630 million. 
In early March, the LTO conducted a tax audit of the company, based on which the SFS increased the Complainant’s profit tax liability on assets by almost UAH 300 mln. and charged a penalty of UAH 285 mln. for violating payment procedure for foreign economic activity. In addition, the factory had to pay more VAT and profit tax. 
In late March, the company challenged the tax audit results and appealed to the BOC. 
Actions taken: Having studied case materials, the BOC investigator sent a letter to the SFS. He presented the legal position of the Council and asked the tax authority to consider the Complainant’s arguments The investigator also participated in a hearing of the Complainant’s case at the SFS. 
Result achieved: With the involvement of the Council, on 25 May the SFS cancelled taxes and penalties for UAH 630 mln., which were additionally charged to the plant, but left in force the additionally accrued corporate income tax liability for UAH 17 mln., which the company plans to appeal in court. 

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