SFS reimburses income tax overpayment for a construction company

Tax issues: Other issues Kyiv

Subject of complaint: The General Directorate of the State Fiscal Service in Kyiv (GD SFS) 
Complaint in brief: On April 25, 2018, a company belonging to the French retail group of building materials appealed to the Council. The complainant could not refund an overpayment of the income tax amounting to UAH 110 thousand. 
According to the tax return for 2014, in February 2015,  there was an overpayment of the income tax on the Complainant’s account. According to the law, a taxpayer has three years to claim the refund of excessively paid amounts. During 2017 the company applied to the SFS twice to return funds. Both times the tax authority acknowledged that, indeed, there was an overpayment, and the Complainant requested it on time. However, according to the SFS, it was impossible to refund it because the company had not been inspected for a long time – since 2011 
However, the legislation does not stipulate that the absence of inspections may be the ground for non-refund of overpayment. Therefore, the Complainant by applying to to the SFS for the third time, was entitled to such a refund. 
Actions taken: The BOC investigator has thoroughly studied legislation and case law on this issue. The company indeed  has three years to apply for and it did so. The Council also, did not agree with the SFS argument that, after the expiration of a three-year term, the Complainant totally loses the right to such a refund. This  Council’s argument was backed by the court practice, as and informed the tax authority thereof in writing. Nevertheless, the tax authority rejected a request for a refund in writing, while the Council received an ungrounded response. After that the Complainant informed the Council of his intention to apply to the court. 
Under these circumstances, the Council investigator after a two week’s break, met twice with the GD SFS management and reasonably upheld the Complainant’s position.
As a result , the Head of the SFS personally instructed his deputy and the SFS audit department to consider the Complainant’s issues. 
Result achieved: With the assistance of the Council, the parties have agreed that overpayment would be used to pay the personal income tax. On July 18, the SFS reimbursed an overpayment for the Complainant. The company that was ready to go to the court has finally proved its point. “We are extremely grateful for your professionalism and fruitful work!”, the Complainant wrote in an e-mail to the BOC investigator. 

Next case:: SFS drops an additional payment against the bank worth over UAH 28 mn