Blocking of tax invoices: in the vast majority of cases, the tax authorities lose in courts on business claims

Almost 95% of court disputes over the blocking of tax invoices are won by business representatives. However, such litigation with the tax authorities can drag on for a year or more. Managing partner of VINCO'S Attorneys at Law Maksym Pokotynskyi told about this in a commentary to UNN.

The number of applications for blocking TI is increasing compared to the period before the full-scale invasion. A lot of people are still applying for additional KVEDs - an additional KVED for each transaction. Previously, they (the tax authorities - ed.) were more loyal, but now they require an additional KVED to be opened for each transaction in the LLC. If you buy some related goods and you do not have the appropriate KVED, you will have a blocking of the TI

Pokotynsky spoke about the mechanism of administrative appeal against the blocking of a tax invoice.

"The first thing you can do is to submit an explanation to the same tax office that blocked it. The second is to file a complaint with the Main Department of the State Tax Service of Ukraine.

In our example, neither complaints nor explanations work, very rarely does a complaint have results, and explanations, in my opinion, are not an effective tool at all. The tax office that blocked the account reads these explanations and then has to unblock it.

The trend is that we all go to court," the lawyer says.

According to the lawyer, almost 90% of those entrepreneurs who applied for the service of unblocking the invoice at the stage of submitting an explanation eventually go to court.

"The situation in court is much better. The courts take the side of taxpayers - almost 95% of our court cases are successful. We unblock these tax invoices and remove them from risky taxpayers, if any.

If the tax authority does not see or does not want to see some of the documents submitted in the explanations, the court acts within the law. And if the situation with the blocking of the TI is really unreasonable, then 95% of the time it is a winning case. The only drawback of the judicial system is time. If we take Kyiv and Kyiv region, it takes a long time, more than a year. If we take the regions, it takes 3-6 months," the lawyer said.

According to Pokotynsky, a lot of appeals about blocked tax invoices come from retailers.

Recall

Blocking of tax invoices is one of the main problems that Ukrainian entrepreneurs complain about in the field of tax administration. In general, according to the Business Ombudsman Council's statistics , 57% of complaints from business representatives in the third quarter of 2023 concerned tax issues.

As business ombudsman Roman Vashchuk noted in a recent interview , the problem for business is not even the level of taxes, but the style of administration. He also added that tax and customs lose 90-94% of their cases in courts, either in the first instance or on appeal to the Supreme Court.

According to experts, this situation with the courts indicates that the tax authorities are abusing their powers, as the courts are breaking down these decisions. Some, such as economic analyst Pavlo Sebastianovych, directly calls it "schemes."

Among the main such schemes, he names fictitious exports, registration of fictitious VAT from fictitious companies, export of goods under fictitious documents with fictitious VAT and refund of real VAT, twists, blocking tax invoices, granting risky status to an enterprise and organizing shadow schemes to remove this status.

Dmytro Oleksiyenko, a member of the Taxpayers Association Board, believes that MP Danylo Hetmantsev, head of the Verkhovna Rada Tax Committee, is behind this administration policy, because no important decisions are made at the State Tax Service without his knowledge. And he actually runs the tax office through his former assistant Yevhen Sokur.

At the same time, Mr. Hetmantsev called his activities in relation to the tax service "parliamentary control." He also rejected accusations that he was taking over the powers of the executive branch, saying that he was simply helping entrepreneurs.