State Tax Service is ready for amicable settlements in respect of the tax losses of previous years. Brief summary of the meeting with Mr.Klymenko, the Head of the State Tax Service.
Brief summary of the meeting with Mr. Klymenko, the Head of the State Tax Service, information about which appeared at official sources (at the governmental portal and on the web pages of the tax authorities in different regions of Ukraine), without any mentioning the discussion of the issue of tax losses of the previous years and verbal promises on ways of its settlement.
According to the words of Mr.Klymenko, the Head of the State Tax Service of Ukraine, amendments to the Tax Code, which entered into force on July 1, 2012, have finally settled the issues of the tax losses of previous years carried forward. Now, as per the State Tax Service’s view, the right of the taxpayers for complete carrying forward the tax losses from the 1st quarter to the 2nd quarter of 2011, including the tax losses of 2009 (80 %) and 2010, are properly prescribed in the Tax Code.
We shall remind that, as we have mentioned earlier, the adopted Law of Ukraine “On Amendments to the Tax Code of Ukraine on Improvement of Certain Tax Rules” has virtually not changed anything on this matter and the issue remains open.
That is why it was rather important to receive the confirmation from Mr.Klymenko as the Head of the State Tax Service that the issue, according to the State Tax Service, has been solved and the State Tax Service confirms the rights of the taxpayers on inclusion of the negative values of the object of taxation by the results of the 1st quarter of 2011 (considering 80 % of tax losses of 2009 and tax losses of 2010) to the expenses of the 2nd quarter of 2011. And the tax authorities agree to recognize those claims of the taxpayers to which the tax authorities don’t have any complaints to the order of tax losses formation, that is where the tax losses have been formed rightfully (under such category fall all cases of desk audit, since in the course of such audits the essence of the tax losses has not been analyzed).
Therefore, in the course of the meeting the representative of our firm has drawn attention of Mr. Klymenko to these aspects of the problem of the tax losses of the previous years, posing respective questions on the matter.
In answer Mr.Klymenko has verbally confirmed that tax authorities agree to recognize lawfulness of the taxpayers’ actions in those court disputes, which refer to “normal”, rightfully formed tax losses of previous years. In this regard, proceeding from the words of Mr.Klymenko, the State Tax Service has already prepared a generalized clarification of the issue of tax losses of previous years carried forward due to changes which is to be published in the nearest future.
The legal department of the central apparatus of the State Tax Service had already been instructed to revise the position of the tax authorities in the existing court disputes with taxpayers and developing the mechanism of recognition of the legitimacy of the taxpayers position (for instance, by the conclusion of international agreements, recognition of claims, etc.).
Considering the aforementioned, we believe that in the court one can refer to the words of Mr.Klymenko and offer the tax authorities to recognize the claims, conclude amicable agreements, etc. In case of refuse – to postpone the consideration of the dispute by the court by all possible legal means until the official explanation of the State Tax Service of Ukraine on the matter is issued.
The meeting with Mr. Klymenko has been organized by the American Chamber of Commerce in Ukraine and held today, on July 5, 2012.
The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.
Is the problem of tax losses of previous years decided? Part II
Amicable settlements in court disputes in respect of the tax losses of past periods: suggested practical measures and draft letter to the tax authorities with an offer of amicable settlement
Is the issue regarding the transfer of the negative amount of the object of taxation from the 1st quarter of 2011 to the 2nd quarter of 2011 solved?! Analysis of the provisions of the Law of Ukraine “On Amendments to the Tax Code of Ukraine on Improvement of Some Tax Rules”