A company that is one of the leading producers of plant protection products and seeds turned to the Business Ombudsman Council regarding the tax authority’s claims about the accounting of retro discounts. As a result of these claims, the tax authority concluded that the company had overstated the amount of budgetary VAT refund by UAH 67 million and imposed an additional UAH 17 million fine.
This was not the first time the company had approached the Council with this issue. Previously, after applying for a VAT refund, the results of a documentary audit were successfully appealed to the regional tax authority through the objection procedure, which led to a repeat (second) audit being ordered. Later, with the Council’s involvement, the results of this second tax audit were successfully appealed in the administrative appeal procedure to the State Tax Service of Ukraine (STS), which again overturned the tax authority’s conclusions and ordered yet another (third) audit.
Thus, in the third quarter of 2025, the Council once again reviewed the company’s complaint regarding the third tax audit. The Council prepared an official letter in support of the complainant’s position and participated in the consideration of the complaint by the STS.
The Council once again noted the poor quality of the materials of the repeated tax audit and emphasized the uncertainty in which the company was forced to operate regarding the correct provision and accounting of retro discounts, which are an essential part of business processes and the functioning of the agricultural market.
The results of the repeated (third) audit were again overturned by the STS of Ukraine. The case was once more (for the fourth time) referred for a new audit.
The Council discussed the company’s situation with the STS of Ukraine within the framework of the Expert Group and asked that it be taken into account that multiple repeated audits on the same issue do not comply with the principles of good governance and legal certainty and constitute an excessive administrative burden for the taxpayer.
The Council proposed involving its mediators in the process of conducting the fourth audit of the company to facilitate communication between the taxpayer and the tax authority. However, this idea was rejected due to the absence of corresponding legal grounds in the Tax Code of Ukraine.
