Based on the results of a scheduled inspection, the tax authority accrued an additional UAH 39 mn in taxes and penalties for a company, which dealt with liquefied hydrocarbon gas transportation.
During the inspection, the tax authorities’ main questions concerned the accuracy of tax accounting for railway wagon repair expenses. The company classified such expenses as current expenses, while the tax authorities insisted on gradually attributing repairs to expenses through depreciation of these costs.
The tax authorities also had questions about the company’s operations of purchasing materials for constructing an access railway track already in use, due to claims against suppliers.
Additionally, the tax authorities concluded that the company had delayed registering adjustments to tax invoices received from contractors.
The company filed a complaint with the State Tax Service of Ukraine (STS) with detailed argumentation, based on international accounting standards, Supreme Court case law , and the results of previous inspections.
The company also engaged the Business Ombudsman Council to assist with the appeal process. The Council analyzed the case materials, prepared and sent an official letter to the STS supporting the company’s position, and participated in the appeal review process alongside the company.
As a result of the administrative appeal, the STS cancelled nearly the entire UAH 39 mn of additional payments.
