Way out from risky taxpayers’ list

1.10 VAT risky taxpayer Kyiv

Complainee:  The State Tax Service (STS), Main Department of the STS in Kyiv City (MD STS)
Complaint in brief: The Council received a complaint from a construction equipment supplier. The company disagreed with the tax authority’s decision on inclusion of the enterprise in the risky taxpayers’ list. The tax authority had doubts that the company did not have employees other than its founder (both director and logistics specialist in one person), and there was no information about the purchased services and equipment. According to the STS, the company carried out “unrealistic” business transactions.
It turned out that the company, in fact, launched its operations not long ago, it had plans for its activity expansion and recently got a bank loan. The first months of work of the new entrepreneur were uneasy: in the beginning, the company did not get any profit at all. Only half a year later the company concluded agreements with clients for special equipment lease. Having found itself in the risky taxpayers’ list, the enterprise could lose its clients, and most importantly, opportunities for further development. The complainant decided to save its business with the Business Ombudsman Council’s support. 
Actions taken: The investigator examined the case file and acknowledged that the complaint was substantiated. The Council recommended the STS to exclude the company from the risky taxpayers’ list since it did not comply with the risky criteria. The subject of the complaint was raised for consideration of the working group with the participation of the STS and the Council. In order to confirm the reality of business operations the complainant submitted additional documents and explanations to the tax authority.
Result achieved: The STS examined the company’s activity more thoroughly and cancelled the decisions on the complainant’s compliance with the risk taxpayers’ criteria. The case was successfully closed.

Next case:: Court decision’s entry into force — the STS promptly registers company’s tax invoices