The tax authority enforces court decision in favor of private entrepreneur

Tax issues: Other issues Kyiv

Complainee: The Main Department of the State Tax Administration in Kyiv city (MD STS in Kyiv) 
Complaint in brief: A private entrepreneur from Kyiv, engaged in legal activities and paying considerable taxes amounts to the local tax office, turned to the Business Ombudsman Council. The tax authority refused to comply with the court decision, which canceled the private entrepreneur’s debt worth UAH 180 k. It is interesting that due to failure to enforce the court decision the entrepreneur actually could not officially conduct his activities and respectively pay taxes to the budget. 
The way how the complainant’s debt appeared is a separate story. Back in his day, the entrepreneur, when paying taxes, transferred money to the bank on time and in full. However, further the bank went bankrupt failing to transfer money to the tax authority. The case-law in such cases is in favor of the taxpayer – if he submitted payment orders to the bank, it is considered that he has fulfilled his obligations to the budget. 
Therefore, in July 2017, Kyiv City District Court (Court) obliged the tax authority to amend the private entrepreneur’s personal single tax account card to show a single tax in the mount of UAH 180 k. The decision came into force in May 2018. 
However, the tax authority was in no hurry. The Complainant had to seek help from the BOC.
Actions taken: The Council’s investigator asked MD in writing asked the MD STS in Kyiv and the STS to take comprehensive actions to enforce the court decision. However, the STS replied it was not obliged to enforce the court decision because it was not a party to the Complainant’s administrative case. The MD STS in Kyiv also tried to find formal grounds for refusing to enforce the decision. 
The Council held a meeting devoted to this issue with the MD STS in Kyiv representatives and the Complainant.
The Council also brought up the private entrepreneur’s case for consideration of the expert group meeting with the STS representatives. The STS stated they had no technical capability to enforce the decision, but the supervisory authority was working on developing the corresponding tool. 
Result achieved: In March 2020, the STS informed the Council in writing in the Complainant’s debt is not accounted any more. With the Council’s facilitation, the private individual managed to defend his legal rights and avoid re-payment of UAH 180 k. 

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