+ Word must be in search result. - Words must not be in search result. * Word start/end on characters before/after symbol. ""Words in quotes will be searched as phrase.

 

Yuliia Kryvomaz spoke at the online event of the Ukrainian Bar Association dedicated to recent court practice in tax dispute resolution

12 February, 2024 Chronicles and faces

On February 6, 2024, an online event of the UBA Committee on Tax and Customs Law was held. The following issues were discussed:

  • top 10 rulings of the Supreme Court in tax disputes for 2023;
  • court practice in tax cases in 2024;
  • practice of the Supreme Court regarding the right to appeal against orders on the appointment of tax audits and effects of their application by courts of first instance.

At the event, Senior of Counsel of and member of the Council of the UBA Committee Yuliia Kryvomaz focused on the Resolution as of September 8, 2021, in which the Supreme Court outlined a position on the right to appeal against orders on the appointment of tax audits. The decision is not new, however, we would expect that, following the recent resumption of tax audits, in practice, such a position will acquire special relevance, considering the practical application of this position by courts of first instance.

According to the text of the Resolution in case No. 816/228/17, the plaintiff appealed against the order on the appointment of an on-site audit, which had already been implemented at the time of the submission of the claim (the tax audit had been carried out and according to its results an audit act had been drawn up). In the Resolution, the Grand Chamber of the Supreme Court derives its conclusions precisely from the fact of admission of the tax authority to conduct an on-site tax audit.

But in addition, the Grand Chamber of the Supreme Court expresses an opinion quite harmful to judicial practice that “such a dispute is not subject to consideration under the rules of administrative procedure”.

As a result, the courts of first instance  without going into details about the factual circumstances of the case refer to the decision of the Supreme Court and note that ALL orders on the appointment of the tax audit cannot be appealed, regardless which type of audit is assigned: on-site or off-site, whether the order has already been implemented: whether the tax authority has been authorized to conduct the audit, or in principle whether the taxpayer can exercise the right to protection of his rights by non-admission (especially relevant for off-site audits), whether the taxpayer filed a lawsuit for the annulment of the order before the starting of the audit.

Does this mean the taxpayer cannot defend his rights at the stage of illegally appointment of audits and prevent further violation of his rights?

Is that not a violation of the Constitution of Ukraine?

If the taxpayer at the stage of appointment of the illegal audit cannot ensure the restoration of his already violated rights and protection of his rights against further violations by the tax authority through the appeal of the relevant order on the appointment of the audit, in such a scenario, the taxpayer is compelled to undergo a knowingly illegal audit, initiate legal disputes to appeal the results of these illegal audits, which are more costly for taxpayers and, consequently, in case the claims are satisfied, it becomes more resource-intensive for both the state and the parties involved in the dispute, as well as for the court itself.

An effective defense in the present case should be recognition of the order on the appointment of audit as unlawful and its cancellation. The refusal to initiate proceedings and, as a result, the impossibility of judicial revocation of the order on the appointment of audit violates the principle of the rule of law and contradicts the Constitution of Ukraine, which guarantees everyone the right to appeal to the court for protection, legitimizes the illegal behavior of the tax authority,  in fact forcing taxpayers into actions not prescribed by law (undergoing a knowingly illegal audit).

Yuliia’s presentation is available by the link.

Views 234

SIMILAR POSTS

Alexander Minin and Ivan Shynkarenko participated in the round table discussion “Tax and Customs Audits – Practice and Innovations” at AНK Ukraine 23 July, 2024    39

The Law on the “white business club” (which is not primarily about “white” business) regarding the level of tax payment above the industry average – for the future, and as an implicit confirmation of the illegality of this in the past 02 July, 2024    301

Is it impossible to challenge the tax audit orders even if they are issued in the absence of legal grounds? Should the taxpayer bite the bullet and tolerate the tax audit? 09 April, 2024    321

Scheduled documentary tax audit in 2024 appointed with the reference to low (compared to industry average) level of tax payment is illegal! 02 April, 2024    473

Documentary tax audits and additional accruals – within what terms are they possible now?
And what is the storage period of documents for such tax audits (because how can there be a documentary tax audit without documents)?
09 January, 2024    778

Difficulties or opportunities: an exemption from fines and penalties in case of payment of calculated tax liability amount within 30 calendar days after receipt of the tax notification-decision under subpara. 69.37 para. 69 of Sub-section 10 Section XX “Transitional Provisions” of the Tax Code of Ukraine 03 November, 2023    780

The Supreme Court is at the service of tax authorities, or how the Supreme Court abolished the tax code, making the right to a tax audit indisputable and absolute 02 October, 2023    668

“A spoonful of honey in a barrel of tar”: what positive changes have been brought about by the latest amendments to the Tax Code of Ukraine? 28 August, 2023    929

Violation of deadlines for settlement of export and import transactions: peculiarities of tax audits and liability during martial law and a little before that 14 August, 2023    615

What’s with scheduled and unscheduled tax audits from August 1, 2023?
The scope of unscheduled audits is expanded, and can a scheduled audit be conducted just because, for example, you are dealing with fuel?
02 August, 2023    602

Are you waiting for renewed audits since July 1, 2023? But they are already “here” in many aspects 04 May, 2023    2812

The season for tax audits on compliance with currency legislation in the part of settlement deadlines for export and import transactions has been opened 28 April, 2023    833

Comment