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Tax invoice blocking, algorithmic failures. Ukrainian Agrarians raised their concerns

 

On April 20 a meeting of the Ukrainian agricultural producers – members of the Ukrainian Agrarian Council (UAC) and the Ukrainian of Agribusiness Club (UABC) with the Chairman of the Committee on Finance, Tax and Customs Policy of the Verkhovna Rada Danylo Hetmantsev and officials of the STATE TAX SERVICE of Ukraine took place.

Representatives of business associations came up with their solution to the existing issues the agricultural enterprise are facing.

Roman Slaston, UABC Director General, noted that the Parliament took into consideration proposal of the business owners and adopted the draft law No. 7632 On amendments to the Tax Code of Ukraine regarding Exemption from Payment of Tax on Immovable Property, Other than Land Plots, for Destroyed or Damaged Immovable Property (presented to the President for signature), However, according to him, the business owners have some questions in terms of implementation of the provision of law. In particular, we are talking about certain communities bordering the russian rederation that are still suffering from the aggressor’s shelling, but are not able to take advantage of tax benefits as they are not included in the list of areas where hostilities are possible.

We hope that this time we will succeed: those who have suffered from hostilities or occupation to be able to enjoy certain benefits which help them to get on their feet back again. But we have certain questions regarding the implementation mechanism of the provisions. On the borderlines with the russian federation, in particular in Sumy Region, with constant shelling the agricultural producers are not able to cultivate their fields. How can they pay land taxes? It is necessary to adjust the list to enable them to fall under the tax exemption mechanism, and to make sure that the real situation coincides with the list, Roman Slaston offered.

Olha Bohdanova, Counsellor to the Chairperson of the Ukrainian Agrarian Council, focused on the problem of not taking into account positive tax history when blocking tax invoices. She gave specific examples when positive history criteria do not work as they are not displayed in the payer’s account.

‘Positive history is not displayed in the account and not taken into consideration in the algorithm system of the suspension procedure software. Calculation of the adjustment is blocked. Moreover, when documents for unblocking were submitted, the tax service did not unblock, but requested more documents. The point is that what kind of paper can be requested from an enterprise paying 30% in taxes? Their list should be minimized. The committee needs to improve its consideration procedure. It is impossible for an enterprise paying 30% and more in taxes to have unblocked adjustment calculation’, Olha Bohdanova said.

Business representatives blame the tax service in invoice mass blocking. And it is not the tax service that blocks, but the algorithms. If such algorithms cause troubles, it should be fixed asap. It is not the way it should work. I was convinced that the algorithms stipulated in the provision of law should be clearly defined in the software and applied. But if one of the criteria especially in favour of the taxpayer doesn’t work, it shows the tax arrears in the taxpayer’s account which creates incapability to fulfil tax obligation’, Chairman of the Parliamentary Committee on Finance, Tax and Customs Policy Danylo Hetmantsev said..

He promised to take control over the issue.

‘The tax service not the taxpayers should be more interested in the smooth work of the system. By using these criteria, you actually cut off the law-abiding taxpayers, avoid various clarifications and negative draw backs. Let’s fine this issue as quickly as possible’, Hetmantsev added.

Other issues raised by the representatives of business included: provision of double tax notices when adjusting negative VAT values, failure to meet response deadlines by tax authorities, resumption of inspections to ensure compliance with the standard for the disabled employment in the newly de-occupied territories and penalties.

Members of the meeting came to a decision that all the indicated issues should be settled promptly in favour of the business and agreed to meet in May 2023.