Terms for appeals against decisions of Ukrainian tax authorities after the 6th of August 2011
- Author: Andriy Buzynnyi
- Practice areas: Litigation
Legal assistance during inspections of controlling authorities
Legal representation in administrative cases
Legal service of appeal against tax violation notification letters in Ukraine
- Standardized procedures: Legal advice
- Дата публикации: 22/09/11
After a Law “On amendments to the Tax Code of Ukraine and some other regulatory acts of Ukraine related to some provisions of the Tax Code of Ukraine” entered into force on the 6th of August our firm “Pravova Dopomoga” simultaneously received a couple of similar questions regarding reforming of terms for appeals against decisions of tax authorities. This is due to the fact that the second paragraph of Section 56.18 was excluded from the Tax Code of Ukraine. Previously it provided that in case of administrative appeal procedure the term that is set for applying to court is prolonged by the period that had actually passed since the date when a taxpayer lodged a complaint against controlling body and until the date when such taxpayer received final decision of the controlling body that was made as the result of complaint consideration.
The mentioned provision along with the first paragraph of Subsection 56.18 of the Tax Code of Ukraine set three year term for appeals filing against decisions of tax authorities and created a beneficial for taxpayers clash with Subsection 59.19 of the Tax Code of Ukraine which defined one month term for appeals against decisions of tax authorities in cases when a taxpayer performed the procedure of administrative appeal. It turned out that first of all the mentioned provisions set different terms for appeals against tax violation notification letters. And secondly in accordance with Subsection 56.18 of the Tax Code of Ukraine the term of court appeal is prolonged during the procedure of administrative appeal while in accordance with Subsection 56.19 this term is not yet started during the procedure.
In order to settle this clash the High Administrative Court of Ukraine issued a letter number 203/11/13-11 dated 10.02.2011 in which it recommended courts to apply Subsection 56.21 of the Tax Code of Ukraine which in case of unambiguous interpretation make a requirement to make a decision in favor of the latter. As the result when a lawsuit about appeal against decision of tax authorities was received by court it would apply Subsection 56.18 of the Tax Code which provides more extensive term for applying to court (1095 days). At the same time in case if a taxpayer was undergoing the procedure of administrative appeal then the 1095 days would start since the moment when a decision of the controlling authority was made based on results of the appeal consideration. Later on this position of the High Administrative Court of Ukraine was upheld by the State Tax Administration of Ukraine in its letter number 6082/5/10-1016 dated 20.05.2011.
So what should be done now? At first glance settlement of clashing provisions limits rights of taxpayers that took part in the procedure of administrative appeal by setting term in one month. However in our opinion there are no grounds for such limitations.
Elimination of the second paragraph of Subsection 56.18 of the Tax Code caused a taxpayer to lose only the right to “attach” term of administrative appeal procedure to the three year term of limitation of actions. Thus this term will be started since the date when a decision that one appeals against was received despite undergoing or not undergoing the procedure of administrative appeal.
The clash between the first paragraph of Subsection 56.18 of the Tax Code and Subsection 56.19 will continue existing. The first one still provides 1095 days for appeals against decisions of the tax authorities in court while the second one – one month. And therefore taking into consideration Subsection 56.21 of the Tax Code and letter of the High Administrative Court of Ukraine number 203/11/13-11 dated 10.02.2011 allows to state that application of Subsection 56.19 of the Tax Code is not lawful. In case if a taxpayer have already undergone the procedure of administrative appeal he still has 1095 days for filing of a lawsuit. The difference is that now these 1095 days will be started since the moment when a decision that is appealed against was made and not since the moment when the procedure of administrative appeal ended.
This material was written by legal experts of law firm “Pravova Dopomoga” within practice of Taxation.