Document from CIS Legislation database © 2003-2024 SojuzPravoInform LLC

SURVEY LETTER OF THE SUPREME ADMINISTRATIVE COURT OF UKRAINE

of July 6, 2009 No. 982/13/13-09

About some questions of practice of the solution of cases with the assistance of bodies of the State Tax Service (on the materials considered by the Supreme administrative court of Ukraine in cassation procedure)

According to the procedure of information and for accounting during hearing of cases with the assistance of bodies of the State Tax Service the overview of the corresponding court practice of the Supreme administrative court of Ukraine is sent.

1. Correctness of forming by the taxpayer of gross expenses and the tax credit requires availability of communication of expenses of the taxpayer on acquisition of services with its economic activity which consists in intention of the taxpayer to benefit from the acquired services.

The limited liability company "G" took a legal action with the claim to state tax inspection about recognition invalid tax messages decisions.

The resolution of local court of July 26, 2006 left without changes determination of Appeal Court of October 10, 2006 in the claim for recognition invalid tax messages decisions which to limited liability company "G" determine the tax liability by the value added tax and the income tax, are refused for those reasons that is confirmed by available written proofs in case papers that the claimant to the conclusion with limited liability company "T" of the agreement on provision of consulting and marketing services of May 10, 2004 N 27/05, result of accomplishment of which became sale of products to limited liability company "B", had long economic relations with this buyer and therefore, delivery and payment of cost of products between limited liability company "G" and limited liability company "B, "according to goods issue slips and payment orders, it was performed not on agreement performance about provision of consulting and marketing services of May 10, 2004 N 27/05, and on agreement performance of purchase and sale of products, concluded between limited liability company "G" and limited liability company "B". Having estimated them. courts came to conclusion that the claimant's expenses on payment of consulting and marketing services are not connected with economic activity of the claimant and therefore are not subject to inclusion in structure of gross expenses and the tax credit in II and IV quarters 2004.

By result of review of decisions of the courts of the previous instances in cassation procedure the Supreme administrative court of Ukraine left the appealed decisions without changes, having stated the following line item.

Proving argument about illegal determination of the tax liabilities by monitoring body, the claimant referred in confirmation of gross expenses and the tax credit for the above-stated period source documents, namely: acts of acceptance transfer of the performed works (the provided services), reports on the performed work and tax delivery notes which, according to the claimant, are good cause for reconstruction of economic activity on acquisition of consulting and marketing services at limited liability company "T" in tax accounting for the income tax and the value added tax in understanding of the special tax laws.

Apparently from the conclusion of Trial and Appeal Courts about absence in actions of the claimant of causal relationship between acquisition of marketing services and receipt of economic benefit from this acquisition, the specified requirement of the procedural law by courts was observed as courts based on purchase and sale agreements of products, goods issue slips, payment orders between limited liability company "G" and limited liability company "B" were determined that at the time of the conclusion with limited liability company "T" of the agreement on provision of consulting and marketing services of May 10, 2004 N 27/05, result of which owed become identification new, other than the existing buyers of products of limited liability company "G", and actually there was finding of such buyer as limited liability company "B", the claimant already had long relations with the specified buyer.

From here follows that correctness of forming by the taxpayer of gross expenses and the tax credit requires availability of communication of expenses of the taxpayer on acquisition of services with its economic activity which consists in intention of the taxpayer to benefit from the acquired services. In the absence of the last there are no bases for reduction of taxation basis by profit and the value added tax at the expense of gross expenses and the tax credit.

2. The determining sign of liable to the value added tax economic activity is the place of provision of goods to the buyer with whose fact delivery is considered executed.

The affiliated enterprise "Ts" of open joint stock company "K" took a legal action with the claim to state tax inspection about recognition invalid the tax message decision.

Warning!!!

This is not a full text of document! Document shown in Demo mode!

If you have active License, please Login, or get License for Full Access.

With Full access you can get: full text of document, original text of document in Russian, attachments (if exist) and see History and Statistics of your work.

Get License for Full Access Now

Disclaimer! This text was translated by AI translator and is not a valid juridical document. No warranty. No claim. More info

Effectively work with search system

Database include more 50000 documents. You can find needed documents using search system. For effective work you can mix any on documents parameters: country, documents type, date range, teams or tags.
More about search system

Get help

If you cannot find the required document, or you do not know where to begin, go to Help section.

In this section, we’ve tried to describe in detail the features and capabilities of the system, as well as the most effective techniques for working with the database.

You also may open the section Frequently asked questions. This section provides answers to questions set by users.

Search engine created by SoyuzPravoInform LLC.