A factory approached the Business Ombudsman Council with a complaint after finding itself in an atypical situation for which tax legislation and the system had no answer.
The story began in 2020 when the factory faced an unusual problem after acquiring another company (a scientific and manufacturing society). This company had the right to VAT budget refunds and the transfer of a negative value in subsequent periods, which the tax service refused.
The factory, as the legal successor of the society, appealed the decision of the state body. The court ruled the tax service’s refusal was illegal. However, after the court decision, the complainant faced problems with its practical implementation. The current legislation does not provide for the possibility of VAT refunds to a legal successor based on applications formally submitted by another taxpayer. Moreover, in this situation, there were certain technical difficulties with the correct transfer of overpayment balances between the taxpayers’ account cards.
Unable to solve the problem independently, in January 2024, the complainant turned to the Business Ombudsman Council (BOC) for help.
It turned out that the regional tax authority, where the acquired enterprise was registered, since March 2021 had ten times requested technical and legal assistance from the central apparatus of the State Tax Service (STS). However, by the end of 2023, no responses had been received from the STS. Similarly, another tax authority, where the plant is already registered, contacted the STS in October 2021 and twice at the end of 2023, but did not receive a response.
The Council accepted the complaint for consideration and submitted it for discussion to the joint Expert group with the STS.
As a result of this cooperation, a solution was found: the tax service thoroughly worked on the issue and agreed on a method to transfer the indicators to the factory’s integrated card. This meant that with BOC assistance the factory officially received the right to use the VAT overpayment.
