Judicial appeal against decisions of tax authorities
Judicial appeal against the decisions of the tax authorities (GFS) is a complex and time-consuming process requiring high qualifications in both tax and procedural law.
Is it really hard?
Only to start the review the taxpayer needs to prepare:
- A statement describing his position on each contested argument;
- documents that prove the taxpayer’s arguments;
- Documents confirming the procedure for pre-trial appeal;
- procedural documents required to file an application (confirmation of the payment of the court fee, notification of the tax authority on the application and other technical documents).
In complex cases, the volume of documents provided reaches several volumes, while the error in each of the documents is fraught with denial of the protection of the rights of the taxpayer. The very appearance in court also requires experience and preparation. It is no secret that the ability to present information sometimes depends on the outcome of the case.
Does it really take a lot of time and effort?
For the consideration of court cases in Ukraine, depending on the category of cases, such stages are provided:
- Preliminary hearing and administrative court of first instance;
- hearing the case in the appellate court;
- hearing the case in the court of cassation.
There may be several meetings in each phase. The latter stage is quite rare in practice – only in very complex and case-by-case cases, however, the first two stages are the absolute majority of tax disputes. The meeting is conducted under special rules of court, other than it happens in ordinary corporate disputes. If you are not familiar with these rules, you risk losing the case because of procedural errors. Are you ready to risk your money and time?
In our experience, only timely appeal to professionals allows you to cope with this task. We have the necessary experience and qualifications and will be happy to represent your interests.
We understand that there are risks of failure in every lawsuit, and we respect the right of our clients to spend their funds effectively. Before each trial, we conduct a preliminary analysis of possible judicial prospects for our clients, it is important for us that our work is as productive as possible for you, and you have decided to start a complex and lengthy legal process, having all the necessary information at your disposal.
What can be appealed?
Judicial appeal against the decisions of the tax authorities – can everything be appealed? To begin with, we note that not every action of the tax authority can be successfully appealed.
The Tax Code of Ukraine (NK) has enshrined the right of taxpayers to appeal decisions, actions or inactions of supervisory bodies (officials) in administrative or judicial order (pp. 17.1.7. Art. 17 NK, p. 56.1. Article 56 NK).
Here is an incomplete list of actions (inactions) and decisions of the state tax authorities (GNS), which can be the subject of appeal:
1) tax notices-decisions on the determination of the amount of monetary obligation of the taxpayer are appealed in administrative and judicial proceedings;
2) decisions on the seizure of taxpayer property (p. 94.11. p. 94 NK) are appealed in administrative and judicial proceedings;
3) refusal of the SNC body to accept the tax return (pp. 49.12.2. Article 49 NK) is appealed in administrative and judicial proceedings;
4) Decisions to revoke the registration of the VAT payer are appealed in administrative and judicial proceedings;
5) Orders for inspections are appealed in court;
6) tax advice set out in writing (p. 53.3. NK) are appealing the lawsuit. The court’s invalidation of tax advice is the basis for providing new advice in the light of the court’s findings.
At the same time, they are not subject to independent appeal, for example, acts drawn up on the results of tax audits. These documents only record the results of inspections, and therefore are not decisions that give rise to legal consequences.
Terms of appeal
Judicial appeal against the decisions of the tax authorities and its timing. First of all, I would like to draw attention to the time set by 86.7. Article 86 NK of Ukraine. This is the deadline for filing objections to an act (reference) drawn up (composed) on the results of the tax audit. It makes 5 (five) working days from the date of receipt of the act (reference).
The terms of the administrative appeal are settled by the Tax Code quite clearly. Thus, the initial complaint against the tax notice-decision or other decision of the state tax service body is filed with a higher body of the SNS within 10 calendar days of the receipt of the relevant decision by the taxpayer (p. 56.3. p. 56 NK).
If the tax authority has independently determined the taxpayer’s monetary obligation for reasons not related to the violation of tax laws, such a decision can be appealed administratively within 30 calendar days after receipt (pp. 56.12. art. 56 NK).
A complaint filed in accordance with the deadlines stipulated by the Tax Code suspends the taxpayer’s performance of the monetary obligations defined in the disputed decision, from the day of filing the complaint until the day of completion of the administrative appeal procedure. During this time, the amount of the monetary obligation is considered inconsistent, and tax requirements are not sent.
The day of filing a complaint is considered to be the day of the actual receipt of the complaint by the relevant supervisory authority, and in the case of it being mailed, the date of receipt by the post office from the taxpayer of the postal service with a complaint, which is specified in the notice of delivery or on the envelope.
The deadline for filing a re-complaint with the top tax authority is also 10 calendar days following the day of receipt of the decision on the outcome of the complaint (p. 56.6. p. 56 NK). If this period is missed, the complaint is not considered and is returned to the taxpayer with the reasons for the return.
The terms of the judicial appeal are not so clearly settled.
The total period of judicial appeal is set by Article 99 of the Code of Administrative Procedure of Ukraine (CAS). It is 6 (six) months from the day a person has learned or should have known about the violation of his rights, freedoms or interests. At the same time, part five of the same article sets a one-month period for judicial appeal of the decision of the subject of power, on the basis of which a demand for recovery of funds can be declared.
At the same time, article 99 of the CAS stipulates that in order to protect the rights, freedoms and interests of a person, both the CAS itself and other laws may set different deadlines for recourse to the administrative court, which, if not otherwise established, is calculated from the day a person has learned or should have learned of the violation of his rights, freedoms or interests.
Such special deadlines, which have an advantage in application over the general terms of the CAS, establishes the Tax Code. But even here there were no conflicts. Without going into details, we note only that the various rules of the Tax Code differently regulate the timing of appeals against decisions of tax authorities. On the basis of which the deadline for appealing to the court to appeal against the decision of the State Tax Service can be 1095 days from the date of receipt of such a decision, regardless of whether or not the person has exercised his right to pre-trial settlement of the dispute through administrative appeal.
Consequences of the pass
Judicial appeals against decisions of tax authorities may not be effective. Thus, an administrative claim filed after the expiry of the statutory deadlines remains without consideration unless the court on the application of the person who filed it finds no grounds for the renewal of the term, as defined (Article 100 CAS).
There is one more circumstance that cannot be ignored. Paragraph 56.18. Article 56 of the NC of Ukraine explicitly stipulates that when the taxpayer appeals to the court with a claim to invalidate the decision of the supervisory body, the monetary obligation is considered uncoordinated until the day of the court decision comes into force. Oddly enough, it is here that the catch is hidden.
When does the judicial appeal against the decisions of the tax authorities end? According to 56.17. Article 56 of the Ukrainian National Committee of the Administrative Appeal process is completed, in particular, by the day following the last day of the deadline for filing a complaint against a tax notice-decision or any other decision of the supervisory body in case such a complaint was not filed within the specified time frame, as well as the day the taxpayer received the decision of the State Tax Administration of Ukraine. In the same page 56.17. Article 56 of the NC of Ukraine states that the day of completion of the administrative appeal procedure is considered to be the day of the agreement of the tax payer’s monetary obligation.
Paragraph 57.3. Article 57 of the NC of Ukraine stipulates that the taxpayer is obliged to pay the accrued amount of the monetary obligation within 10 calendar days following the day of receipt of the tax notice-decision, except when during such a period such a taxpayer begins the procedure of appealing the decision of the supervisory body. In the event of an appeal against the decision of the supervisory body on the accrued amount of monetary obligation, the taxpayer is obliged to repay the agreed amount, as well as penalties and penalties, if they are available within 10 calendar days following the day of such agreement. In the case of non-payment of tax obligation within the specified time frame, there is a tax debt.
It is obvious that it is very difficult to return from the budget the previously paid (recovered) money. And a judicial appeal against the decisions of the tax authorities may not help. It’s not a panacea. Therefore, one advice can be given: to appeal tax notices to the court or within 10 days of receipt of the relevant decision, or, in the case of its administrative appeal, without waiting for the completion of the administrative appeal procedure.