The company “E” appealed to the court with an administrative claim to the Joint State Tax Inspectorate (hereinafter – JSTI), in which asked to cancel the tax notices-decisions (hereinafter – TND), issued as a result of a documentary scheduled on-site inspection of another taxpayer. Substantiating the claim, the plaintiff notes that the challenged TNDs do not comply with the requirements of applicable law, violate the rights and legitimate interests of the plaintiff, and therefore, the latter asked to cancel them. The courts satisfied the claims. JSTI filed a cassation appeal.
Arguments of the case
In deciding the case, the court was guided by the following:
- one of the arguments of the controllers was a reference to the act of the district STI in Odessa on the results of the counter-reconciliation with the plaintiff’s counterparty and the act of the district STI in Kharkiv on the impossibility of counter-reconciliation with another counterparty of the plaintiff. According to the tax authority, this indicates the lack of real nature of business transactions between the plaintiff and these counterparties and as a consequence – the overstatement of the plaintiff’s costs taken into account to determine the object of taxation of income tax and tax credit;
- systematic analysis of the provisions of item 73.5 of Art. 73 of the Tax Code, items 6, 7 of the Procedure for conducting counter-reconciliation by the State Tax Service, approved by Resolution of the Cabinet of Ministers No. 1232 of December 27, 2010, as well as the Procedure for registration of documentary inspections on compliance with tax, currency and other legislation approved by STS Order No. 984 of December 22, 2010, confirms that the counter-reconciliation is to compare the primary accounting and other documents of the business entity (in this case the plaintiff) with the data of the taxpayer (auditee), in order to document business relations with the taxpayer, as well as confirmation of relations type, volume and quality of transactions and calculations carried out between them, to determine their reality and completeness of reflection in the account;
- counter-reconciliation of business entity may be carried out by the tax authority only in relation to the relationship with a particular taxpayer (for which a basic audit is conducted, during which there is a need to initiate counter-reconciliation) and only if the tax authority has primary documents or such documents are submitted by the taxpayer on the obligatory written request of the tax authority. At the same time, the judgments of the tax authority on the correctness of the taxpayer’s payment of taxes and fees on the indicators of business transactions reflected in the tax reporting can be specified only in the act of inspection or certificate of counter-reconciliation. The current legislation does not provide for the reflection of such judgments in the act on the impossibility of reconciliation, which should indicate only the circumstances that caused such impossibility.
Resolution of the Supreme Court of Ukraine of September 14, 2021 in case No. 820/11305/15: to dismiss the cassation appeal of the State Tax Service of Ukraine.
