New Court Fees Rules ~ U-Tax Blog

Monday, September 21, 2015

New Court Fees Rules



One will pay more

Once again the rules on court fees in tax disputes have dramatically changed. One will normally pay more, or to speak more accurately, much more in court fees. The amendments to the Law of Ukraine "On Court Fees" (hereinafter - the "Law on Court Fees") have been already in force since 1 September 2015.

What is pleasing is that the tax authorities are now also liable to court fees. An exemption from court fees enjoyed by them no longer works. The exemption has been lifted, under an explanatory note to the bill concerned, to prevent the tax authorities from abusing their procedural rights by resorting to justice without any valid grounds for that, just owing to their free of charge access to court.

So, what was it and what is it going to be:

Category
Applicant’s type
Court fee rate (before the amendments)
Court fee rate (after the amendments)
Filing a claim of a property nature with a court of first instance (for example, challenging tax assessments)
Taxpayers-legal entities and governmental bodies

General rate – 2 % of the amount of the claim

Minimal rate – 1,5 MSS*

Maximum rate – 4 MSSs
General rate – 1,5 % of the amount of the claim

Minimal rate – 1 MSS*

Maximum rate – not available
Taxpayers-individuals and taxpayers-individual entrepreneurs
General rate – 1 % of the amount of the claim

Minimal rate – 0,4 MSS

Maximum rate – 5 MSSs
Filing a claim of a non-property nature
Taxpayers-legal entities, taxpayers-individual entrepreneurs and governmental bodies
Fixed rate –0,06 MSS
Fixed rate –1 MSS
Taxpayers-individuals
Fixed rate –0,4 MSS
Filing an appeal from the judgement of a court of first instance or a motion on the review of a case based on newly established circumstances

All types of applicants
50% of a rate paid at the stage of the filing the claim with a court of first instance


110% of a rate paid at the stage of the filing the claim with a court of first instance

Filing a cassation appeal from the judgement of a court of appeal
All types of applicants
70% of a rate paid at the stage of the filing the claim with a court of first instance

120% of a rate paid at the stage of the filing the claim with a court of first instance

Filing an appeal with the Supreme Court of Ukraine

All types of applicants
70% of a rate paid at the stage of the filing the claim with a court of first instance

130% of a rate paid at the stage of the filing the claim with a court of first instance


* - Minimum statutory salary (an MSS rate as of September 2015 is UAH 1,218).

Of special interest is the abolition of the rule allowing paying 10% of a prescribed full-sized court fee at the stage of the submission of a clam of property nature. Court fees with respect to such claims are nowadays payable immediately in full.

How to get an indulgence?

A significant increase in court fees, especially in respect of multimillion hryvna cases for which a maximum rate of a court fee has been canceled, forces us to think seriously of such an option as postponement, introduction of installment plan, reducing an amount or a full exemption from a court fee (Art. 8 of the Law on Court Fees).

It is hoped that courts will take a balanced approach to the application of the above instrument. Courts are granted almost unlimited discretion in this respect. The only thing a court must take into account when deciding on granting postponement, introducing an installment plan, reducing an amount or a full exemption from a court fee is the financial state of a requesting party to litigation. At the same time, the statute sets out no specific criteria for assessing such a financial state. It appears that everything fully rests on the discretion of the court.

Given the "breadth" of the statutory language, one cannot exclude the widespread exemptions of the tax authorities from court fees due to their insufficient funding. However, hopefully, the judges will show common sense and this will not occur. Otherwise everything remains as it is today. Relying on a free of charge access to justice, the tax authorities will continue their notorious practice of issuing arbitrary tax assessments and filing ill-founded appeals from court judgements.

Turning to the Unified State Register of Court Judgments, it is even now possible to find first court jurisprudence as to deferred payments of court fees at the request of the tax authorities. Up to now, this jurisprudence looks favorable for taxpayers.

In particular, in the case brought by the Municipal Enterprise "Voda Donbasu" to the Slavyansk United State Tax Inspection (http://reyestr.court.gov.ua/Review/50191807) the Donetsk Administrative Court of Appeal denied the tax authorities’ motion to defer the payment of a court fee. The court made reference to the failure on the part of the tax authorities to provide evidence in support of its poor financial situation.

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