It was my pleasure to speak at the meeting of the Committee on Tax and Customs Law of the Bar Association of Ukraine on the topic of court jurisprudence in tax litigation.
My speech was dedicated to:
1) The court jurisprudence in cases related to challenging the tax authorities' orders on appointing tax inspections in accordance with the Resolution of the Cabinet of Ministers of Ukraine (CMU) of 3 February 2021 No 89. This Resolution narrowed the scope of the moratorium on tax inspections set out for the period of the quarantine. The Resolution, among other things, allows carrying out scheduled tax inspections.
Court jurisprudence currently exists at the level of the courts of appeals at the maximum. Such cases have not yet been decided by the Supreme Court.
The court jurisprudence at the level of the courts of appeal is ambiguous. In some cases, the courts side with the taxpayers, recognizing that the CMU's resolution cannot narrow the scope of the moratorium provided for in the Transitional Provisions of the Tax Code of Ukraine. In other cases, on the contrary, the courts of appeal hold that the narrowing of the moratorium introduced by the CMU's resolution is legal. They refer to the fact that the CMU's resolution was adopted in accordance with the direct provision of the Law of Ukraine of 17 September 2020 No 909-IX (on amendments to the Law on State Budget of Ukraine for 2020).
It is interesting that, as a rule, the Sixth Administrative Court of Appeal (Kyiv) demonstrates a loyal approach to the taxpayers. The Fifth (Odessa) and Second (Kharkiv) Administrative Courts of Appeal, on the other hand, are more likely to share the logic of the tax authorities.
2) The court jurisprudence on the application of indirect methods of determining taxable income.
This court jurisprudence has emerged in recent years in connection with the attempts of the tax authorities to issue additional tax assessments to statesmen when some discrepancies are found between their official income and the value of assets in the electronic declarations.
The relevance of this court jurisprudence has greatly increased in connection with the implementation of the tax amnesty in Ukraine starting from September 2021.
The court jurisprudence in this category of cases is already present at the level of the Administrative Court of Cassation (a division of the Supreme Court) and is absolutely favourable for the taxpayers. The court finds the use of indirect methods of determining income illegal.
