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It often happens that taxpayers having VAT refund in
arrears owed by the Ukrainian tax authorities doubt whether to claim it through
the court or not to do so. The reason is that should the court find for the
taxpayer the decision will be enforced on the “first come first serve” basis*. One can assume that there is a long
line of such decisions outstanding from the previous years. So, the enforcement
of the decision can take years.
On the other hand, the taxpayer always has the
possibility to negotiate the VAT refund with the tax
authorities and to enjoy it much earlier than when passing through the
litigation. As a matter of practice, in exchange of the VAT refund the taxpayer
is required to make advance payments of corporate income tax amounting up to 50
per cent or even more of the VAT refund sought.
In view of the above, I have filed the information request
with the Ukrainian Treasury Service so as to clarify the situation surrounding
the enforcement of court decisions on VAT refund arrears. The Ukrainian Treasury
Service omitted to answer the main question being of interest to the taxpayers,
i.e. what total amount of the court decisions on VAT refund arrears is currently
outstanding. Yet they provided some information on the enforcement of such decisions
in 2010,2011 and 2012.
According to the Ukrainian Treasury Service, they
enforced 65 decisions on the total amount of UAH83.10 million in 2010, 146
decisions on the total amount of UAH266.53 million in 2011 and 21 decisions on
the total amount of UAH 46.58 million in the first quarter of 2012.
Please see below my request to the Ukrainian Treasury
Service and their response (in Ukrainian).
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