Notable Tax Disputes of 2023

I had a pleasure of speaking at the meeting of the Tax and Customs Law Committee of the Ukrainian Bar Association on the topic of the most notable court jurisprudence of the Supreme Court in tax disputes in 2023.

In particular, the following issues decided by the Supreme Court in 2023 came into the focus of my attention:

1) The possibility of recovering damages from the state revenues in the form of a contractual fine paid to the purchaser for the untimely registration of the VAT invoice - the judgement of the Grand Chamber of the Supreme Court dated 1 March 2023 in case No. 925/556/21 initiated by "Manufacturing enterprise "Impuls Plus", LLC on the lack of such a possibility in view of the absence of a cause-and-effect relationship between the suspension of the registration of the VAT invoice and the payment of the fine;

2) The possibility of invalidating a contract concluded between two taxpayers at the request of the tax authority - the judgement of the Commercial Court of Cassation dated 29 August 2023 in case No. 910/5958/20 initiated by the Main Department of the State Tax Service of Ukraine in the city of Kyiv on rejecting the tax authority's claim due to the fact that it did not manage to prove a violation of its civil rights and interests in the course of concluding the disputed contract by the taxpayers;

3) The deductibility for the purpose of corporate income tax of non-refundable financial assistance provided to a related company - the judgement of the Administrative Court of Cassation dated 30 May 2023 in case No. 580/3758/19 initiated by "Sokar Petroleum"LLC in favor of such a deductibility;

4) The possibility of a taxpayer to challenge its inclusion in the plan-schedule of scheduled tax inspections - the judgement of the Administrative Court of Cassation dated 4 October 2023 in case No. 480/12329/21 initiated by "Sumy Development Company", LLC stating that this is an incorrect remedy that cannot be applied; and

5) The possibility of applying the principle of stability of tax legislation - the judgement of the Administrative Court of Cassation (the entire "tax" chamber involved) dated 26 September 2023 in case No. 640/7520/21 initiated by "AERO TELECOM", LLC on the impossibility of the application of this principle.