New fines for late registration of tax invoices and adjustment calculations
New fines for late registration
Recently, business and tax authorities have been actively engaged in discussions on the proportionality of imposing huge fines for the late registration of tax invoices and adjustment calculations that are not provided to recipient.
Verkhovna Rada has addressed this issue and adopted the Law No. 466-IX. It stated the maximum fine to of UAH 1020. Subsequently, under the Law No. 786-IX as of 14 July 2020, this maximum was reduced to of UAH 510. At the same time, the issue of fines issued BEFORE the entry into force of these Laws was settled. Similar restrictions apply to fines which were issued within the period from January 1, 2017 till December 31, 2019 and have been challenged (not agreed tax liabilities). The latter means that respective tax notices-decisions are pending in administrative or judicial appeal and monetary obligations under them have not been paid.
What about the challenged fines?
The Supreme Court held that a new wording of the paragraph at issue imposes retroactive effect on the provisions governing fines charged to taxpayers during the period starting 1 January 2017 till 31 December 2019 in case if such fines are falling under the prescribed conditions.
The Supreme Court also made the following important conclusions:
- in accordance with paragraph 56.18 of the Article 56 of the Tax Code of Ukraine, monetary obligations are to be considered as challenged if taxpayer appeals to a court to declare unlawful and/or invalidate the decision of the tax authority and pending the entry of such decision into force;
- the supervising body at the place of registration of the taxpayer shall recalculate the amount of the fine in accordance with updated legal thresholds and shall send to such taxpayer a new tax notice-decision. The previous tax notice-decision shall be considered as the canceled (revoked);
- for the purposes of this paragraph, the legislator has established a separate definition of challenged monetary obligation, which is different from the general one. Thus, the monetary obligation is considered as the challenged one during the entire court appeal procedure without restrictions on the instance in which the dispute is pending;
- the mandatory condition for the existence of a challenged obligation is the absence of payment of such obligation.
And what should be done if the “old” tax notice-decisions (TND) are being appealed, but new ones had been issued and the fine was paid already? It is advisable to:
- Submit explanations with proof of payment under the new TND;
- Submit a motion to dismiss the appealing claims;
- Communicate with the tax authorities on the cancellation of the “old” TND.
Details can be found in the Resolution of the Supreme Court as of 01 September.2020 in the case No. 340/1857/19
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