Tax Litigation

Many regulations of tax legislation in practice applied by regulatory authorities are not in favor of taxpayers that can cause significant financial losses for the company.

The basis of the dispute with tax authorities (currently - territorial authorities of the Ministry of Incomes and Fees) usually is the result of inspection of the company on correctness of calculation and payment of taxes, duties and other obligatory payments.

Quite often persons who make the inspection commit a number of violations at its initiation and implementation without observing current legislation of Ukraine on the inspection procedures exceeding its powers. Unfortunately it is a quite common situation when tax conclusions of the inspection do not correspond to the actual state of the records of the company, contain errors in calculations (both logical and arithmetic) and incorrect conclusions as a result of the application and interpretation of legislative regulations. Sometimes territorial authorities of the Ministry of Incomes and Fees try to take over functions that apparently are not typical for them. In particular, tax authorities recognize invalid economic treaties on the result of inspection. Such decisions are made in contravention of due court procedure violating the principle of the presumption of validity of lawfulness of powers and obligations of tax authorities to act within the limits set by current legislation of Ukraine only.

According to Article 56 of the Tax Code of Ukraine in the case if the taxpayer considers that the regulatory authority determined the amount of monetary obligation incorrectly or made any other decision contradicting the legislation or extending beyond the powers of governing authority established by this Code or other laws of Ukraine, he has the right to appeal to regulatory authority of higher level with claim for review of this decision.

If the client is not satisfied with the result of appeal decision of regulatory authority in administrative procedure, the next step is litigation of decision in court.

Litigation of decision, acts or inaction of tax authorities and their officials can be applied without the use of pre-trial (administrative) procedures for appeal.

An important point in the process of litigation of decision of regulatory authority in the court is that in accordance with regulations of tax legislation of Ukraine in the case if the taxpayer applies to the court with the claim for invalidation of decision of regulatory authority, monetary obligation is considered to be not consented and amounts of tax obligation extra charged by tax authorities are not to be recovered from the taxpayer to the date when court decision enters into force.

Lawyers of Law Net company have extensive successful experience defending the rights and interests of clients in disputes with tax authorities both in court and administrative proceedings and in particular provide the following services:

  • preparing the taxpayer for the tax inspection and its support;
  • choice of tactics of behavior of the taxpayer in the process of tax inspection;
  • development of strategies for resolution of the dispute;
  • providing oral and written consultations during the tax inspection;
  • participation of lawyers in negotiations with the persons conducting the inspection;
  • preparing objections to the inspection;
  • appeal against decisions of regulatory authority in administrative proceedings by filing claims to regulatory authorities of higher levels;
  • appeal against decisions of regulatory authority in court.

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