SFS drops over UAH 55 mn of additional payments for financial company 

Tax issues: Inspections by state tax and fiscal agencies Kyiv

Complainee: The Main Department of the State Fiscal Service in Kyiv (SFS)
Complaint in brief: A big financial company, one of electronic payments market leaders, approached the Council. The Complainant disagreed with the tax audit findings, according to which it had to additionally pay UAH 55 mn in taxes.
The tax authority officials stated the Complainant’s funds electronic transfer transactions were subject to VAT application. For this reason, in addition to paying the tax itself, it also had to pay a fine for late registration of tax invoices. However, such a claim could not be agreed with. The said transactions were listed as exceptions in the Tax Code as such that are not subject to VAT. The Complainant objected to fiscal inspectors’ conclusions. So, according to the company, the SFS decided to charge additional liabilities without properly analyzing the nature of disputed transactions. 
Actions taken: After examining case files, the Council upheld the company’s position. The investigator noted the transactions that were the subject of the audit were not in fact subject to VAT. Accordingly, objectively there were no grounds for additional charges and tax invoices registration.
To protect the taxpayer’s interests, the Council engaged the National Bank of Ukraine (NBU) as the relevant regulator in the discussion of the subject of complaint. NBU representatives agreed with the Complainant’s position as well as the Council’s approach.
Result achieved: Following the case consideration outcome, the STS satisfied the financial company’s complaint and dropped accrued liabilities worth over UAH 55 mn. The Complainant thanked the Council for assistance in resolving the case.

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