SFS partially drops additional payment for agricompany from Kherson Oblast

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

Subject of Complaint: The Main Department of the State Fiscal Service in Kherson Oblast, the Autonomous Republic of Crimea and the City of Sevastopol (MD SFS), the SFS of Ukraine (SFS) 
Complaint in brief: On July 5, 2018, an agricultural company from Kherson Oblast applied to the Council. The Complainant disagreed with the tax audit findings, according to which it had to pay UAH 700 k of additional payments and fines.
In early June, the MD SFS audited the company’s activities: employees onboarding, payment of individual income tax, military fees for 2015-2017, as well as a unified social contribution for 2011-2017. According to the audit findings, the MD SFS established that the company had underestimated obligations on individual income tax and military fees. The tax authority arrived at this conclusion since the lease payment for land plots leased by the company was lower than minimum lease payment established by law. In the Complainant’s view, these rules did not apply to it because the leased land plots were owned by individuals while the statutory requirement applies to lease of communal or public lands only. 
The company challenged the MD SFS decision but its objections were rejected. To establish its case, the Complainant filed an appeal to the SFS and asked the BOC for help.
Actions taken: The Council’s investigators analyzed the Complainant’s case, considering provisions of the effective legislation and case law. They sent legal opinions in support of the company’s position to the SFS. In addition, the investigators participated in the Complainant’s appeal consideration at the SFS. 
Result achieved: Following the appeal, the tax authority partially canceled tax notices-decisions worth over UAH 220 k. The Complainant plans to challenge the remaining part of penalties and additional tax accruals in court.

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