UAH 1 mn of additional payments for car showroom of the capital rescinded

Tax issues: Inspections by state tax and fiscal agencies Kyiv

Complainee: State Tax Service of Ukraine (STS Ukraine), Main Department of STS in Kyiv City (MD STS)
Complaint in brief: The Council received a complaint from Kyiv сar showroom. The company did not agree with the results of the tax inspection, as a consequence of which additional payments were imposed. According to the decision of the MD STS, given the clarifying calculation to the tax return for 2017, the complainant paid UAH 1 mn less in taxes.
In 2016 Kyiv City Council reduced the land tax. In particular, the government approved the new valuation procedure of the land tax in Kyiv that came into force in 2017. The tax amount for the land plots rented by the complainant respectively decreased. As long as the company made a mistake in the tax return for rent in 2017, it submitted an additional document with a correct calculation. 
Nevertheless, in the course of the inspection, the MD STS disagreed with the fact that in 2017 and 2018 the car showroom had to pay smaller amounts than a year earlier. However, in accordance with the extracts from the technical documentation that the complainant received in August 2018, the tax amount in fact decreased compared to 2016. Therefore, the tax authority obliged the enterprise to return unpaid UAH 700k to the budget and additionally imposed over UAH 300k of sanctions. The car showroom solicited help from the Business Ombudsman Council.
Actions taken: Having examined the complaint materials, the investigator of the Council upheld the position of the enterprise.  In the letter to the STS, the Council asked to ensure a full, comprehensive and impartial consideration of the company’s complaint.
The investigator had ascertained that the change of the normative monetary valuation of land plots in Kyiv entered into force by the decision of local authorities, and not since the receipt of the extract from technical documentation by the complainant.
Results achieved: The STS of Ukraine upheld the Council’s recommendations and dropped additional payments for the enterprise. The investigator successfully closed the case. 

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