A well-known marketplace turned to the Business Ombudsman Council with a complaint against the tax authority, which had failed to refund an overpayment of VAT since 2021.
Tax officials had imposed a fine of UAH 6.8 million on the company for the late registration of invoices. The company paid the fine but later successfully appealed the tax notification decision in court. However, the company could not return the funds for the canceled fine, which were accounted for as an overpayment. For nearly three years, the complainant engaged in correspondence with the tax authorities, repeatedly requesting either a refund to its bank account, at least in installments, or the option to use the overpaid amount to cover tax liabilities. It was only in 2024 that the company was allowed to reallocate UAH 805,000 toward other tax payments.
The Business Ombudsman Council took the case under its control and initiated discussions on the complaint at both the central and regional levels of the State Tax Service. The central tax authority insisted that the complainant should independently transfer these funds to its account in the VAT Electronic Administration System (VAT EAS) and then withdraw them to a bank account or use them to cover VAT liabilities. However, this approach did not suit the company, as the specifics of the system could lead to the loss of its registration limit.
During a trilateral meeting between the Council, the complainant, and the regional tax office, several options for refunding the funds were developed. With the Council’s support, a compromise and optimal solution was found, allowing the company to recover its funds without negative financial consequences. The company ultimately received the remaining UAH 6 million directly to its bank account and subsequently transferred them to the VAT EAS account at its own discretion.
As a result, the business successfully regained its funds, and the Council closed the case with a positive outcome. This case once again proves that constructive dialogue with government authorities is possible.
