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Only one month for challenging tax assessment notices after the administrative procedure: new position of the Supreme Court
Deloitte, Kyiv, Ukraine,
Dec 11, Fri, 2020
The Supreme Court at the Trial Chamber has abandoned the position on the application of the rule of law in cases related to taxes, duties and other compulsory payments in its Resolution of 26 November 2020 in case No.500/2486/19 (hereinafter, the Resolution) as well as in similar legal relationships.
Under the previous legal position, which has been applied for nearly 10 years, the deadline for a taxpayer to file a claim to the administrative court, including after exhaustion of the administrative appeal procedure, was 1095 days from the date when the relevant ruling was obtained by a taxpayer.
Legal opinion of the Supreme Court:
Para. 56.19 of Art. 56 of the Tax Code of Ukraine that establishes a one-month term for challenging tax assessment notices (TANs) after the end of the administrative appeal procedure is specific with respect to Part 4 of Art. 122 of the Code of Administrative Court Procedure of Ukraine and para. 56.18 of Art. 56 of the Tax Code of Ukraine. This provision has priority in tax disputes and regulates issues related to challenging in courts the tax assessment notices and other decisions of regulatory authorities on the accrual of monetary liabilities, provided that the plaintiff has previously exhausted the pre-trial dispute resolution procedure (administrative appeal).
According to the court, the right to initiate a dispute on the lawfulness of tax assessment notices and/or other decisions of the regulatory authority on the accrual of monetary liabilities can not objectively exist for 1095 days, as such duration violates the principle of legal certainty as one of the main elements of the rule of law, and fails to support the purpose and objectives of the tax system.
The full text of the Resolution has not been released yet. However, it will be available in the Unified State Register of Court Decisions.
Press release of the Supreme Court is available at: https://supreme.court.gov.ua/supreme/pres-centr/news/1036868/.
New terms will apply to the cases that are already being considered by the courts, with no appealable decisions made.
Provisions of Parts 3 and 4 of Art. 123 and para. 8 of Part 1 of Art. 240 of the Code of Administrative Court Procedure of Ukraine entitle the court to leave the claim without consideration at any stage of the legal process if the court determines that the deadline for filing an appeal is missed, and the plaintiff (taxpayer) does not specify valid grounds for renewing the missed deadlines. The court will determine the validity of such grounds independently.
Moratorium on documentary and factual audits remains in force (except in some cases, such as filing of appeal by a taxpayer, reorganization and liquidation of a taxpayer, certain types of physical audits, etc.).
The moratorium ends on the last day of the month in which the quarantine ends.
Deloitte's lawyers are ready to provide you support and assistance at all stages of the tax audits and challenging of the tax audit results, and to answer your questions.