"Taxes are the price we pay for the opportunity to live in a civilized society".
Head of tax law practice
An expert in the practice of tax law, specializes in the protection of rights in court, corporate law.
ABOUT HOPEFUL TAX DEBT
Paragraph 101.1 of Article 101 of the Tax Code of Ukraine stipulates that a bad tax debt is subject to write-off, including fines and penalties imposed on such tax debt.
As stated in paragraph 101.2 of this article, the term “bad tax debt” means, in particular, the tax debt of the taxpayer in respect of which the statute of limitations established by this Code has expired.
Paragraph 102.1 of Article 102 of the Tax Code of Ukraine defines the statute of limitations – 1095 calendar days, and paragraph 102.4 of this article provides that if the monetary obligation is accrued by the supervisory authority before the statute of limitations specified in paragraph 102.1 of this article, the tax debt in connection with the refusal to self-repay such a monetary obligation, may be collected within the next 1095 calendar days from the date of the tax debt.
The obligation to pay a penalty is related to the obligation to repay the tax debt. As the debt itself acquires the status of bad debt, no penalty is charged on bad debt.
Therefore, in case of expiration of the 1095-day term from the date of occurrence of the tax debt, such debt is recognized as bad and is subject to write-off together with the penalty and penalties accrued on such tax debt. From now on, the tax authority has no right to take any measures to recover the amount of debt.
This conclusion was reached by the Supreme Court as a panel of judges of the Administrative Court of Cassation in its decision of 06.02.2018 in case № 807/2097/16.
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