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The vast majority of the decisions of the tax authorities appealed by our clients are tax notices – decisions (written notice of a supervisory body (tax authorities) that indicates the taxpayers’ duty to pay the determined sum of funds.
According to the sub-paragraph 14.1.157 of the Tax Сode of Ukraine “tax notice – decision is the written notice of a supervisory body (decision) indicating the duty of a taxpayer to pay the amount of the monetary liability determined by a supervisory body in the cases envisaged by the Code herein and other legislative acts, control over the performance of which shall be carried by the state tax authorities.
Tax notice – decision may be revoked by:
- the controlling body of higher level (two-staged procedure)
An appeal shall be lodged to the supervisory authority of the regional or interregional level at the first stage.
The decision of the supervisory authority may be appealed to the central body of the executive power which provides the formation and implementation of the national tax and customs policy at the second stage (The State Fiscal Service (ex. The Ministry of Revenues and Taxes).
- by the court decision
As a rule (80-90% cases), appealing a tax notice-decision to the supervisory body brings no positive results at all.
The main advantage of the court procedure of appeal is that the tax notice-decision remains inconsistent until the court decision comes into force. As a rule, the procedure of appeal from the first hearing to the date of delivery of the decision of the court of appeal takes from 6 to 12 months.
In addition, the indictment of a crime shall not be based on the tax notice-decision until the decision of the administrative court is ruled.
A tax written-notice decision may be appealed within 1095 days (p. 102.1 of Article 102 of the Tax Code of Ukraine)
However, we strongly recommend you contact us and appeal the tax notice-decision within ten days from the date of issuance on the following grounds.
In accordance with the s-p. 57.3. of the Tax Code of Ukraine:” If a financial liability has been assessed by the supervisory authority on the grounds specified in sub-paragraphs 54.3.1, 54.3.2.,54.3.4- 54.3.6 of paragraph 54.3 of Article 54 of this Code,
the taxpayer shall be liable to pay the assessed amount within 10 calendar days
following the date of receipt of such tax notice-decision, unless the taxpayer initiates the appeal procedure of the supervisory authority‘s decision within the said time frame (i.e. only ten days).
These grounds are
failure to submit a tax return (n. 54.3.1 of TCU);
audits of financial results , other than e-audit, if they show understating or overstating the amount of its tax liability, the amount of the budget refund and / or a negative value of the object of income taxation or negative value of the sum of VAT of the taxpayer which have been included into tax (customs) declarations;
the court's decision finding guilty a person concerned of tax evasion came into force (sb. 54.3 TCU);
audit shows that deduction of taxes from the source of payment (including tax agent) has violated the rules of calculation, deduction and payment taxes to the corresponding budgets and funds that envisaged by this Code, including the tax on income of individuals , by this tax agent (p. 54.3 .TCU).
Thus, if the appeal is not lodged within ten days from the date of the tax notice-decision issuance, the taxpayer risks that tax debt may be considered to be consistent.
According to para. 2.3. of the Order on Sending Tax Claims the tax claim shall not be sent within the terms for appeal.
Thus, a taxpayer may challenge the decision of the tax authority by filing a lawsuit and the corresponding tax notice-decision can be revoked.
Conversely, if the tax notice-decision has not been challenged, so it will be considered to be agreed and then the tax authority has the right to send a tax claim.
Agreed tax claim causes
accrual of interest and penalties;
ban on the employment of foreigners;
- prohibition of automatic VAT refund;
- compulsory enforcement of the tax claim.
The Law of Ukraine № 590 from 19.09.2013-VII establishes the payment of the court fee for filing an administrative lawsuit of material nature comprises 1.5 minimum wages (approximately 150 USD).
But only 10 percent of the court fee should be paid in advance, the remaining part will be charged according to the sum of accepted or rejected claims.
According to statistics, only 10-15 per cent of the decisions of tax authorities are successfully appealed by the administrative procedure, but filing a lawsuit has 80-90% success rate.
Do not hesitate to contact us and get rid of problems with the tax authorities.
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