Appeal against the tax notice decision. Steps and case law
Based on the results of the tax audit on the basis of the Act, the authority may decide to apply the liability of the taxpayer as a result of violations of the law, about which the business entity receives a tax notice-decision.
The TCU provides for administrative, or pre-trial, and judicial procedures for resolving disputes between the taxpayer and the SFS body.
Step 1. Analysis of violations in the Act of inspection
Regulatory requirements for the Act are established by Procedure № 727
(http://zakon.rada.gov.ua/laws/show/z1 …), so the business entity needs to check whether it has a qualification of the identified offenses in accordance with specific articles and regulations; what changes were made to the financial result, accounting, tax reporting due to violations; a list of documents that have not been submitted for verification or indication of missing primary documents that could confirm the taxpayer’s calculations; a list of documents and their copies received from the taxpayer and the grounds for such a claim. As a rule, fiscal officials do not reflect all these aspects illegally, and conclusions are formed on the assumptions of officials.
The jurisprudence has developed the position that the Act is not a statutory or binding document and is not subject to appeal. That is why it is necessary to reflect such violations in the comments and objections to the Act, which are submitted within 5 days to the tax authority that conducted the audit. The payer has the right to participate directly in the consideration of objections, and by the way, this right is often neglected, to the detriment of himself. In addition, a Business Ombudsman Council was established in 2014, to which you can apply online and receive advice and even direct physical support during the review. If the arguments provided by the taxpayer did not give the desired results, on the basis of the Act, the authorized body accepts the PPR.
The submission of objections or comments is not yet considered an appeal against the audit, but these methods of protecting the entity will be important in the subsequent stages of appealing the tax audit.
Step 2. Administrative appeal
The appeal is made by the taxpayer’s appeal to the highest level fiscal authority with a complaint about the review of the illegal decision. Adherence to the hierarchy of authorities is important in this regard, as an erroneously directed complaint to an inappropriate entity is not subject to review.
The TCU sets deadlines for filing a complaint:
-10 days from the date of receipt by the payer of the appealed decision;
-30 days from the date of receipt of the PPR, if the state body has determined the monetary obligation on grounds not related to the violation of tax legislation.
Also, for valid reasons, this period may be extended, for the reasons provided (paragraph 102.6 of the TCU) and documented, only at the written request of the taxpayer.
The term for consideration of the complaint is set at 20 days, but it can be increased to 60 by the decision of the head of the SFS, as reported by the taxpayer. During this period, the fulfillment of tax obligations is suspended until the end of the administrative appeal. If within the established terms the controlling body has not sent any decision (neither on cancellation of the decision, nor on its remaining in force), it is considered that the complaint is satisfied completely (item 56.9 TCU). However, if the entity has not received a decision, there is still no 100% guarantee of success. In the future, it may turn out that the tax office considers the monetary obligation agreed, but the taxpayer has not received a decision, so in the process of appealing the “automaticity of the decision” is proved only by the lack of evidence of sending mail by mail to the address specified in the complaint.
Step 3. Trial
Disputes concerning appeals against decisions made by the SFS body are subject to administrative proceedings. When filing a lawsuit and until the court decision comes into force, the tax liability is considered uncoordinated.
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