Penalties for violation of the terms of foreign trade settlements during quarantine and martial law
The court of cassation upheld the position of the supervisory authority regarding the legality of the tax assessment notice, which imposed a penalty on the plaintiff for violation of the terms of payments in the field of foreign economic activity.
The court of cassation concluded that the disputed legal relations are specific and regulated by the special Law of Ukraine No. 2473-VIII dated 28.06.2018 "On Currency and Currency Transactions" (hereinafter - Law No. 2473), and the provisions of the said Law No. 2473 are applicable, in particular, in the matter of charging a penalty for violation of the terms of payments in foreign currency.
That is, in the opinion of the Judicial Chamber, if the legislator intended to exempt business entities from liability by not charging (not applying) a penalty during the quarantine (COVID-19), the relevant amendments (or restrictions in application) would have been made to the Law of Ukraine "On Currency and Currency Transactions", but no such amendments were made.
No relevant amendments were made to the Law of Ukraine "On Currency and Currency Transactions" in terms of suspension of the time limits.
The relevant time limits were not suspended by the regulations of the National Bank of Ukraine, which, in accordance with part one of Article 13 of Law No. 2473, sets deadlines for settlements under export and import transactions.
However, as noted above, the Law of Ukraine "On Currency and Currency Transactions" is a special law that regulates not the collection of taxes and fees, but the conduct of currency transactions, currency control and currency supervision, and therefore the issue of time limits and liability for their violation is regulated by the said Law, which can be amended only by amending this Law. At the same time, if the provisions of other laws contradict the provisions of the Law "On Currency and Currency Transactions", the provisions of the Law "On Currency and Currency Transactions" shall apply.
Thus, subparagraph 69.9 of paragraph 69 of subsection 10 of section XX "Transitional Provisions" of the TCU and the Law of Ukraine "On Currency and Currency Transactions", in particular Article 13, are not competing provisions, and the fact that subparagraph 69.9 of paragraph 69 was adopted later in time is not a basis for its application to disputed legal relations.
Taking into account the above, Judicial Chamber on Cases on Taxes, Fees and Other Mandatory Payments of the Administrative Court of Cassation within the Supreme Court formulates the following legal opinion.
The provisions of subparagraph 69.9 of paragraph 69 of subsection 10 of Section XX "Transitional Provisions" of the Tax Code of Ukraine, which suspends the time limits specified by tax legislation and other legislation, control over compliance with which is entrusted to the controlling authorities, do not apply to the time limits for settlements for export and import of goods, which is regulated by the legislation in the field of currency transactions, currency regulation and currency supervision.
The Supreme Court also noted that the imposition of martial law in Ukraine cannot be regarded as a force majeure circumstance for the company's failure to transfer funds for the goods delivered under foreign economic contracts to the plaintiff's accounts by a non-resident counterparty.
The case file does not contain any evidence in the form of a certificate of the authorized organization (body) of the country of location of the party to the foreign economic contract or a third country that would confirm the occurrence and termination of force majeure circumstances that caused the non-resident company to be unable to fulfill its obligations under the contract.
Therefore, the Administrative Court of Cassation within the Judicial Chamber for Taxes, Duties and Other Mandatory Payments of 23.07.2024 in case No. 240/25642/22 dismissed the plaintiff's cassation appeal; the decision of the Seventh Administrative Court of Appeal of 05.03.2024 was upheld.
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