STS drops company’s fine worth over UAH 1.2 mn

Tax issues: Inspections by state tax and fiscal agencies

The Tax Service of the city of Kyiv conducted an audit of an agricultural company with foreign investment regarding correctness of accruing a budget value added tax amounts refund. Taxpayers found an overestimation of the budget VAT refund by over UAH 1 mn.
The company appealed the relevant tax notifications-decisions (TNDs) to the State Tax Service of Ukraine (STS), and immediately filed an appeal with the Business Ombudsman Council (BOC).
The BOC sent a letter to the STS asking to impartially consider the company’s complaint and take into account the arguments in support of the company. During the remote complaint review, BOC investigator drew attention to the fact that the agricultural company had the right to declare the VAT amount before the budget refund for disputed operations. The fact of the company’s purchase of corn was confirmed by the tax authority itself while analyzing subsequent supply chain of the same corn for export, and the received logistics services for transporting corn abroad were also confirmed by respective documents. In addition, BOC noted that minor deficiencies in filling out the documents should not create any tax consequences for the enterprise.
After the Council’s intervention, the STS satisfied the company’s complaint and cancelled TNDs totally amounting to UAH 1.2 mn.

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