On 20 February 2019 I was pleased to conduct a LIGA-ZAKON webinar on the topic of tax inspections in 2019.
Below is a very brief description of the new Supreme Court’s jurisprudence in disputes concerning procedural aspects of tax inspections.
It should be noted that in general the new Supreme Court adheres to the same fundamental principles that existed at the level of the court jurisprudence before:
- If an admittance procedure is provided for a tax inspection (for example, documentary on-site inspections or factual inspections), the taxpayer is entitled to refer to procedural violations by the tax authorities only when he refuses admittance of the taxmen to the conduct of the inspection and appeals from the tax authorities’ order on appointing the inspection. If the taxmen were admitted to carry out the inspection, the court does not take into account the taxpayer's reference to the procedural issues. In this case, the court has regard to the only validity/invalidity of the contested tax assessments themselves. An example of such court jurisprudence is the resolution of 13 March 2018 in case No. 804/1113/16 (http://www.reyestr.court.gov.ua/Review/72745230).
- If an admittance procedure is not provided for a tax inspection (for example, offsite documentary inspections), the courts must take into account procedural violations. They may cancel a contested tax assessment based only on the existence of procedural violations committed by the tax authorities during the appointment or conduct of the inspection. An example of such court jurisprudence is the resolution of 7 February 2018 in case No. 821/1562/16 (http://www.reyestr.court.gov.ua/Review/72324146).
Among other significant judgements of the new Supreme Court in the area of procedural aspects of tax inspections the following are worthwhile to mention:
- The ruling of the Grand Chamber dated 23 May 2018 in case No. 237/1459/17 (http://www.reyestr.court.gov.ua/Review/74475877). According to this ruling, an investigating judge’s ruling on the appointment of an inspection, although it is not clearly defined by the Criminal Procedure Code of Ukraine, may be challenged to the court of appeal.
- The resolution of the Administrative Court of Cassation of 28 August 2018 in case No. 804/19780/14 (http://reyestr.court.gov.ua/Review/76139166). According to this resolution, so as to attest the existence of a "dispute over a right" in cases concerned with the confirmation of the validity of asset freezing applied by the tax authorities, it is not enough to challenge the only order of the tax authorities on appointing the tax inspection. It is also necessary to challenge the decision of the tax authorities on imposing the asset freezing.
