Businesses complain of increased pressure due to SPSS

OnMarch 21, this year, the General Directorate of the NGO "Association of Taxpayers of Ukraine" held a regular, free online webinar with the participation of representatives of the Departments of the State Tax Service of Ukraine on the topic: "Algorithm of actions for removing enterprises from the "risky" category, unblocking TI/CC, acceptance of Data Tables, status of court cases on refusal to register TI/CC in the URTI".

It is pleasant to note that the event, which was initiated by the General Directorate of the Association of Taxpayers of Ukraine, was attended by more than 60 people, including CEOs, chief accountants, and financiers of the companies - members of the Association of Taxpayers of Ukraine from 15 regions of Ukraine and the city of Kyiv, namely: Vinnytsia, Dnipropetrovs'k, Donetsk, Zakarpattia, Ivano-Frankivsk, Kyiv, Kirovohrad, Lviv, Odesa, Poltava, Ternopil, Kharkiv, Cherkasy, Chernivtsi, Chernihiv and Kyiv, as well as the Chairmen of the Councils and Executive Directors of the ACUU TUO in the regions, in particular in: Dnipropetrovs'k, Zakarpattia, Lviv, Odesa, Poltava, Ternopil, Kharkiv, Chernihiv regions. The event was also attended by members of the Kyiv Chamber of Commerce and Industry.

The event was exclusively educational and awareness-raising.

As always, the event was moderated by EBA Vice President and CEO Liudmyla Gerasymenko.

The event was opened by the Vice President, CEO of the Association Liudmyla Gerasymenko, who thanked the members of the Association who, despite the difficult situation in the country, remain active members of the UCCI. "Payment of membership fees allows us to fulfill our main mission - protection and defense of the rights and legitimate interests of taxpayers - members of the Association," the moderator summarized.

Next, Liudmyla Gerasymenko turned the floor over to Nataliia Khimchuk, Head of Legal Department at the Kyiv Chamber of Commerce and Industry, PhD, who welcomed the participants of the event and thanked Vice President, CEO of the Association Liudmyla Gerasymenko for the invitation and the welcoming speech.

Lyudmyla Ger asymenko drew attention of the members of the All-Ukrainian NGO APPA to the fact that from March 1, this year, the acceptance of applications for participation in the Rating "Conscientious Taxpayers - 2023" has begun. "All information is available on our official website. I would like to emphasize that it is through the Rating that the Taxpayers Association helps the state to publicly thank and recognize the achievements of companies that faithfully fill the country's budget. Apply and win," she said.

After that, Liudmyla Gerasymenko proceeded to announce the upcoming events:

"On April 09 this year , taking into account the significant number of questions received on TP and CFC, we will hold another two-hour online webinar, the lecturer of which will be a professional, Head of Accounting and Tax Accounting and Transfer Pricing Practice of EUCON Legal Group, member of the Board of our Association Larysa Vrublevska;

OnApril 17 this year , an experienced practicing attorney Andriy Tamoshyunas will hold an event on the following topics: riskiness, blocking;

OnApril 25 this year, Anton Yanko, an expert on remuneration, taxation and personnel administration, will speak on the following topics: "Indexation, how to work in 2024, sick leave, payroll reporting in the second quarter, the nuances of submission, payroll under martial law: advantages and disadvantages".

Further, the Vice President, Director General of the All-Ukrainian NGO APPA emphasized the need for a joint discussion of current and problematic issues for taxpayers, such as non-acceptance of Taxpayer Data Tables, blocking/suspension of TI/CC, classification of taxpayers as "risky" by the Commissions on suspension of registration of tax invoice/calculation of adjustments in the URTI at the regional level, due to the fact that the General Directorate of the EBA All-Ukrainian NGO received more frequent appeals from taxpayers-members of the Association on these issues, which led to the proposal to hold a joint online webinar with the participation of specialists from the Departments of Risk Management and Legal Support of the State Tax Service of Ukraine.

Then, the speakers addressed the participants of the event:

Anna Sibirtseva, Deputy Director of the Department - Head of the Risk Operations Monitoring Division of the Risk Management Department of the State Tax Service of Ukraine. In her speech, Anna S ibirtseva highlighted the following issues:

• Exclusion of business entities from the list of risky ones;
• Algorithm for submitting a notice of submission of information and copies of documents regarding the taxpayer's non-compliance with the riskiness criteria of the taxpayer;
• The list of required copies of primary documents to be submitted by taxpayers, explanations (what information should be included in the explanation), etc.

Anna Sibirtseva gave examples of the main reasons for classifying taxpayers as "risky", including paragraph 8 of the Procedure approved by the CMU Resolution No. 1165, and advised each taxpayer to provide explanations and copies of supporting, primary documents to the Notice of withdrawal from the "risky" category as much as possible according to an exhaustive list that will clearly confirm the reality of business transactions.

The next lecturer, Oleksandr Osavoliuk, Head of the Department for Coordination of Commissions and Identification of Tax Risks of the Risk Management Department of the State Tax Service of Ukraine, covered the issue:

• The procedure for submitting a table of data of a value added tax payer in accordance with the requirements of Procedure No. 1165;
• Correctness of writing explanations to the taxpayer's data tables (with the information that should be contained therein);
• Submission of copies of primary documents to the VAT payer's data table.

He drew the attention of the audience and gave examples of cases when the payer's data table is not taken into account, in particular: incorrect filling of the table, failure to submit explanations and copies of supporting documents or the company does not meet the criteria according to which it must submit the data table, mainly for manufacturers, and also informed about the recently adopted Law of Ukraine, which expanded the cases of interaction between the taxpayer and the supervisory authority in the video conference mode and emphasized that the amendments will be implemented in the Procedure of Resolution No. 1165 in

Another important point that Oleksandr Osavoliuk focused on was the issue of the formation of the trade margin and the riskiness of transactions in case of formation of the trade margin by more than one and a half times, as specified in the Procedure of Resolution No. 1165. The lecturer also gave examples when a taxpayer receives a decision with a request to add more necessary documents within 5 days, as provided for by Procedure No. 1165.

Liudmyla Gerasymenko asked Oleksandr Osavoliuk, as the Head of the Central Level Commission for Review of Complaints on Refusal to Register TI/CC in the URTI, Rejection of Payer Data Tables and Payer's Compliance with the "Riskiness" Criteria, about a significant number of executed court decisions, namely 7.5 thousand, on cases of obligation to register tax invoices totaling UAH 11.4 billion. UAH, of which 5.6 thousand court decisions were received in 2023, and the rest were decisions of previous periods. This statistic was cited by Danylo Hetmantsev, Chairman of the Verkhovna Rada Tax Committee, in his telegram channel.

"This is also a confirmation that the decisions made by the Chairmen or their Deputies of the Commissions were groundless and unlawful, as they were canceled in court. The point is not that the State Tax Service complied with the court decision and registered the tax invoices, albeit late. I was impressed by the number of court decisions - 7.5 thousand and their total amount - UAH 11.4 billion. How many unlawful decisions were made by regional level commissions, illegal and unreasonable, and they were clearly confirmed administratively, i.e. by the State Tax Service Commission, which you head," the moderator emphasized.

"Have you done a thorough analysis and put all these decisions on the shelves? How does it happen? A taxpayer is classified as risky, everyone knows what the consequences are, no one wants to work with them, even the contractors who have been working with them for years, because they are also automatically classified as "risky". And after an administrative appeal, which is not in favor of the payer, the first instance court rules in favor of the payers, i.e., the decisions of the Main Department Commissions are recognized as unlawful and canceled. What is the percentage and amount of 7.5 thousand lost court decisions reviewed administratively by the Commission of the State Tax Service of Ukraine, which you head?" asked Liudmyla Gerasymenko.

The Chairman of the Commission, Oleksandr Osavoliuk, replied that there are no clear statistics on such data due to the lack of possibility to conduct such an analysis.

The next speaker was Oleksandr Yakymchuk, Deputy Director of the Department - Head of the Office for Support of Disputes Concerning Refusal to Register Tax Invoices of the Legal Support Department. He highlighted the status of court cases involving appeals against decisions of commissions to refuse to register tax invoices/adjustment calculations in the Unified Register of Tax Invoices.

In particular,Oleksandr Yakymchuk noted that the courts do not accept evidence, do not take into account and satisfy claims in favor of taxpayers. He also noted that in 2023 there are still positive positions and gave examples of 6 (six) cases in which the Supreme Court and the Administrative Court of Cassation ruled in favor of the State Tax Service of Ukraine, i.e. the court agreed that the decisions of the controlling body in terms of the PCIS are legitimate.

Addressing Oleksandr Yakymchuk: "I can't agree with you, you mention isolated cases. Only 6 (six) decisions in favor of the supervisory authority for the whole of 2023 out of 7.5 thousand decisions in favor of taxpayers is 0.08%. Perhaps it pleases your service that, in particular, they won a lawsuit for UAH 53 million, and we are talking about UAH 11.4 billion! I would also like to tell you that I have analyzed the content of more than one court decision in favor of taxpayers, which clearly states that the Defendant, i.e. you, not the taxpayer, did not submit to the court documentary evidence of the tax information available to the Main Department of the State Tax Service, which indicates the presence of signs of risky transactions by the taxpayer (plaintiff), and became the basis for the regional level commission to make decisions on the compliance of the plaintiff with the criteria of the taxpayer's riskiness. In accordance with Article 255 of the Code of Administrative Procedure of Ukraine, the court decision comes into force. Why do you, the representatives of the Legal Support Department of the State Tax Service of Ukraine, and in accordance with what regulatory documents, continue to file without complying with the decision of the Administrative Court? Is there any internal order or instruction? Why am I asking so meticulously? I understand that this is your right, but someone has counted how much court fees and duties have been collected from the State Tax Service! I'm not even talking about reimbursement of legal aid. Although the courts are reluctant to approve lawyers' reports, practice shows that there are already such reimbursements. I'm not talking about the salaries of your Department's lawyers who handle such "losing" cases. These are all expenses from the state budget," emphasized Liudmyla Gerasymenko.

Addressing the tax authorities, the moderator said: "I urge you not just to get together today and talk, because I, for example, have not heard any answers from you, Oleksandr (Yakymchuk). I want you to understand the consequences of being categorized as "risky", because no one wants to work with them later, even contractors who have been established for years, because they are also automatically categorized as "risky". We have all the enterprises of the real sector of the economy in the Association."

Next, Liudmyla Gerasymenko addressed the participants with the following words: "Dear tax colleagues. Please hear me as a representative of the public. The years 2020-2021 and 2022-2023 will definitely go down in history as the years of business "survival", because even the most powerful enterprises have adjusted their business plans and have become a real challenge for small and medium-sized businesses. I never tire of publicly repeating to everyone that it is high time to change the rules of the game and to embark on a dialogue between the regulatory authorities and business, that we all need to reduce the "degree of tension" and that we should not treat taxpayers as "criminals" at the slightest suspicion. All of you are well aware that today Ukraine is going through difficult times and it is simply impossible to win the war without the functioning of business. Business, by paying taxes, provides the country with resources to continue its defense. However, instead of support, business says that the tax authorities have increased pressure. Studying the documents of our members and your decisions, I can tell you that, unfortunately, this is true in most cases. The EBA will continue to insist on the introduction of personal liability, in particular, of the Chairmen or Deputy Chairmen of the Commissions, depending on who made an unlawful decision regarding the taxpayer to classify it as a "risky" taxpayer, block TI/CC or reject the Data Tables, by appealing to the legislative and executive authorities. We have already made a big step in this direction. We have already received the Proposals prepared at our request by the professors of the Department of Administrative Law and Administrative Activity and the Department of Tax Law of the Yaroslav Mudryi National Law University regarding amendments to the current legislation in terms of applying personal liability of officials of the controlling authorities for unjustified and illegal decisions on classifying taxpayers as "risky", blocking/stopping the registration of tax invoices/adjustment calculations, etc. I am sure that if the Chairman of the Commission or his Deputy signing an unreasonable, illegal decision is aware of personal responsibility, he will think about it carefully. And then the business will have fewer problems," emphasized Vice President and CEO Liudmyla Gerasymenko .

At the end of the event, EBA Vice President and CEO Liudmyla Gerasymenko thanked the lecturers:

Anna Sibirtseva, Deputy Director of the Department - Head of the Risk Operations Monitoring Division of the Risk Management Department, Oleksandr Osavoliuk, Head of the Commission Coordination and Tax Risk Identification Division of the Risk Management Department, and Oleksandr Yakymchuk, Deputy Director of the Department - Head of the Dispute Resolution Division for Refusal to Register Tax Invoices of the Legal Support Department for the informative and useful information for the participants of the event and Larysa Dontsova, Deputy Director of the Legal Support Department.

Liudmyla Gerasymenko also thanked the specialists of the General Directorate: Lesia Kashpur, Victoria Bespalova, David Alkhanishvili for the quality preparation and organization of the event.

Concluding the event, Liudmyla Gerasymenko assured all the participants that taxpayers - members of the NGO "Association of Taxpayers of Ukraine" can always count on the support of the General Directorate, her personal support and wished everyone peace, peace, bright hopes, confidence in the future and a speedy Victory!