Nataliya Blazhivska, judge of the Administrative Court of Cassation as part of the Supreme Court, took part in the work of a round table on the consideration of the practice of tax disputes and significant cases and trends during the war period, organized by the Committee of Entrepreneurs on Tax Issues at the Chamber of Commerce and Industry of Ukraine.
The speaker introduced the listeners to the current practice of the Supreme Court in the field of taxation.
Thus, the judge drew attention to the resolution of the Grand Chamber of the Supreme Court of July 7, 2022 in case No. 160/3364/19 regarding the fictitious nature of transactions. In the ruling, the Court noted that it is important to take into account the actual possibility of the taxpayer to be aware of the fact that unauthorized persons are acting on behalf of the business entity declared in the primary documents. There must be evidence that a bona fide taxpayer could have verified the veracity of the relevant primary documents by legal means, and also had sufficient grounds, acting with due diligence, for justified doubts about the authenticity of the primary documents drawn up by other persons.
The Supreme Court noted that the fact of using primary documents with unreliable data to confirm the circumstances of a business operation should not automatically indicate the groundlessness of the tax accounting data. Instead, the controlling authority must prove that the taxpayer, accepting from counterparties and using certain documents for tax accounting purposes, acted unreasonably, in bad faith or without due diligence.
Nataliya Blazhivska also spoke about the decision of the Supreme Court of February 22, 2022 in case No. 420/12859/21 regarding the moratorium on inspections. In this case, the Court stated that the moratorium on conducting tax audits for the quarantine period is directly enshrined in the Code of Criminal Procedure of Ukraine. The specified norm in terms of restrictions on scheduled inspections was in force, and its effect was not suspended. The panel of judges noted that changing the terms of the moratorium can only be done by directly amending the Code of Ukraine.
Accordingly, in the presence of conflicting rules and regulations regarding the effect of the moratorium on inspections contained in the PC of Ukraine, on the one hand, and in the resolution of the Cabinet of Ministers of Ukraine, on the other hand, the regulations and rules of the PC of Ukraine are applicable.
The speaker also drew attention to the Supreme Court's conclusions, formulated in the decision of December 8, 2022 in case No. 520/9294/21, regarding guilt as an objective party to tax offenses. The panel of judges noted that the provisions of the current tax legislation define guilt as an objective aspect of tax offenses, and therefore, in order to establish its presence, the supervisory authority must prove the absence of the appropriate attitude of the taxpayer towards his illegal actions / inaction (awareness of his actions, understanding of the consequences, etc.) , namely, that the taxpayer, by committing certain actions or failing to act for which liability is provided, acted unwisely, in bad faith and without due diligence.
The judge also highlighted the position of the Supreme Court, set out in the resolution of November 22, 2022 in case No. 804/7601/16, regarding the duty of the supervisory body to conduct an on-site inspection. The court indicated that the provisions of Clause 79.5 of Art. 79 of the Criminal Code of Ukraine are dispositive and do not indicate that the controlling body must conduct a documentary on-site inspection at the request of a taxpayer instead of a non-on-site documentary inspection. However, as the courts of previous instances correctly noted, the defendant generally ignored and did not take into account such a right of the plaintiff as a tax payer, and during the trial did not provide any explanations, proper and admissible evidence regarding the reasons for not taking into account the plaintiff's request to conduct a scheduled on-site documentary inspection at the location of the accounting documentation.
Considering the fact that the conclusions of the tax authority regarding the violations established during the inspection are based solely on the taxpayer's failure to provide primary documents, taking into account the fact that the controlling authority ignored the request of the taxpayer to conduct an on-site inspection at the location of the accounting documentation, while being aware of the taxpayer's intentions of taxes to provide the relevant documents, the panel of judges agreed with the conclusion of the courts of previous instances that the defendant violated the administrative functions of power, and therefore the conclusions of such an inspection are not proper and admissible evidence of the plaintiff's violation of the requirements of tax legislation.
In addition, the speaker told the participants of the event about the legal conclusions of the Supreme Court regarding: registration of tax invoices (the resolution of the Supreme Court of December 7, 2022 in case No. 500/2237/20); exemption from payment of value added tax when importing goods necessary for the implementation of measures aimed at preventing the occurrence and spread, localization and liquidation of outbreaks, epidemics and pandemics of the coronavirus disease (COVID-19) (Decision of the Supreme Court of November 18, 2022 in case No. 580 /2947/21); the amount of the court fee, which is paid when submitting documents through the "Electronic Court" subsystem (decision of the Supreme Court of the Supreme Court of November 16, 2022 in case No. 916/228/22).