Problem issues of registration blocking of tax bills
Author: Rolan Bondarets, leading lawyer on tax issues, Finance Business Service, 15 years of experience
As it is known since July 1, 2017, the taxpayers faced the problems related to the suspension of the registration of the tax bills and the calculation of adjustments in the Unified Register of Tax Bills, as well as the refusal to register them.
The suspension of the registration of the tax bills in the Unified Register of Tax Bills and the refusal to register them became possible due to the introduction of the amendments to the Tax Code of Ukraine based on the Law of Ukraine No. 1797-VIII dated 21.12.2016 and the adoption of a number of normative acts by the Cabinet of Ministers of Ukraine and the Ministry of Finance of Ukraine.
According to the clause 5 of the Order of the Ministry of Finance of Ukraine No. 567 dated 13.06.2017, the certain features are determined, the so-called “cutting off criteria”. As the representatives of the controlling bodies assured, the compliance of the tax bill with these criteria makes it impossible to monitor it.
However, as it has turned out in practice, such “cutting off criteria” do not always work, and a certain number of the tax bills, which according to the requirements of the Order of the Ministry of Finance of Ukraine No. 567 dated 13.06.2017, should not have been monitored, still “have been blocked”.
Therefore, as the practice has shown, “cutting off criteria” do not provide 100% guarantee that the registration of a tax bill will not be suspended or it will not be refused in its registration.
This Order has also defined the criteria, which make the suspension of the registration of tax bills possible, and in the case of compliance of the tax bill with the specified criteria, its registration is suspended.
It was sufficiently forecasted that the changes in tax administration, in particular, the suspension of the registration of tax bills in the Unified Register of Tax Bills and the refusal to register them will primarily affect the enterprises of the producers and the enterprises providing the services.
This is mainly due to the fact that the risk assessment criteria are actually prescribed for the control of the quantity of goods purchased to the quantity of goods sold.
The certain expectations regarding taking into account the peculiarities on the provision of services and the implementation of production, were laid on giving the information by the taxpayers in the established form (technological card).
According to the opinion of the controlling authority, “technological card” was supposed to fill this gap. It was supposed (at least the following explanations were provided) that the taxpayer provides a “technological card” which reflects the specificity of his business, the information from such a card is entered into the database, and in the future, this information provides the opportunity to register the tax bills without any obstacles.
In practice, everything turned out to be different. The technological cards submitted by the taxpayers were not widely accepted. And only more than a month later from the start of the full operation of the updated administration system, it was explained that the submission of a technological card, as a preventive measure, does not work. The technological card can be submitted only under the “blocked” tax bill. And only in this case, the information from it may be taken into account by the controlling body. This causes significant inconveniences to the taxpayers which will be corrected only by the time and the sufficient amount of “blocked” tax bills.
If the tax bill should not have been placed under monitoring, but their registration has been suspended, then in this case the submission and consideration of еру documents regarding the legality of the formation of tax indicators should not take place.
In this case, there are two ways to solve the issue. The first one is a submission of explanations indicating that the tax bill does not meet the criteria which provide the implementation of monitoring. The second one is the application of a claim to the administrative court, with the requirements for the recognition of unlawful acts and the obligation to act.
And on giving the explanations and appealing at the court, the taxpayer should refer to the fact that in accordance with the paragraph 5 of the Order of the Ministry of Finance of Ukraine No. 567 dated 13.06.2017, the tax bill should not be monitored, and therefore the termination of the registration is unlawful.
If it was decided by the Commission of SFS of Ukraine to refuse to register a tax bill, then in this case, the study of legality of the formation of tax indicators was obviously carried out, based on the explanations and documents provided by the taxpayer.
There are two ways to appeal such decisions. The first one is an administrative appeal, the second one is a court appeal.
The administrative appeal is regulated by the Resolution of the Cabinet of Ministers of Ukraine No. 485 dated July 4, 2017.
This Decree defines: the body considering the complaints; the term for filing a complaint; the requirements regarding the form and content of the complaint; the decisions made on the results of consideration of the complaint;
Statistics indicates that the consideration of such complaints in an administrative order does not always lead to a positive outcome, and therefore the further appeal is carried out in the court.
One of the situations the taxpayers face is the suspension of registration of the tax bills, when the tax rates are determined taking into account the prepayment made under the contracts.
Such a suspension is likely to be the result of improperly prescribed criteria which are sufficient to suspend the registration of a tax bill. At the same time, the taxpayers often face the fact that, after providing the explanations and documents, the SFS decides to refuse registration of such TB / AC.
The best way out of this situation is to provide the notice, or if there is already a decision to refuse the registration, then in addition to the complaint, three main documents – it is a contract (it is desirable to highlight the clause on the prepayment), a statement from the bank (that the prepayment has arrived precisely according to this contract), explanation in an arbitrary form, in which to state briefly the essence of this economic transaction.
It should be noted that there is no universal “recipe” for all cases of the registration suspension of the tax bills. And even if the taxpayer provides all the documents and does everything as it is recommended by the controlling authority, there is no guarantee that the tax bills will be registered.
However, to make such situations less frequent and to get out of them less painful, it is necessary to decide on the sequence of steps that a taxpayer should take on the registration suspension of a tax bill or refusal to register it.
The first thing a taxpayer should do is to submit a message electronically with the explanations and / or copies of the documents to the Commission of the SFS of Ukraine. The copies of the documents and explanations should relate exclusively to that issue (that contract, that code of the goods/services), which is indicated in the receipt for the suspension of registration.
If a decision to refuse in the registration is made, then it is necessary to choose whether to appeal to the court immediately or go through the administrative appeal procedure before this. In this case, each taxpayer decides himself in which direction to move.
When appealing against the decision of the SFS commission to refuse to register a tax bill, the proof base is, in fact, the same as on appealing the tax notices-decisions. That is, it is necessary to prove the legality of the formation of tax indicators through the prism of the reality of economic operations.
Summarizing, it is possible to state the imperfection of the implemented system, and therefore the taxpayers should approach to the choice of counteragents more serious, record the results of the economic activity carefully and refer to the order of the formation of tax indicators attentively.