Sergei Chaplian

There will always be a “war” of sorts between the business and tax authorities as long as these two exist. The winner is usually the one who knows the laws and practices best, who is smarter and more inventive. If the business wishes to survive under the tax pressure, it needs to learn how to actively resist tax authorities’ attempts to go beyond the law for reasons that are far from noble and certainly not for the sake of filling up the public treasury at any cost.


According to the statistics, decisions of the tax authorities are evidently unreasoned in 30% of cases. In 50% of cases, the situation can be interpreted both in favor of the taxpayer and the tax authorities. Now what must be kept in mind here is that by unclear interpretation of legislative regulations decision should be made in favor of the taxpayer. Finally, the taxpayer is obviously wrong only in about 20% of cases. Nonetheless, there is a light in the end of the tunnel even in such a situation.


As a matter of fact, if the company has no intention to fill up the budget using additionally charged taxes, it can and should use the procedure of appeal. Naturally, the odds for success are individual in each particular case. But if we consider the situation as a whole, more than half of the judgments is passed in favor of the business. This happens not always and not only because the taxpayers are right. In many ways, the taxmen are a contributing factor here, for tax inspections are often carried out in outrageously improper manner.


There was a funny case in our practice. The Tax Office performed a desk audit, having charged over UAH 2 million of additional taxes to be paid by the client. Since the latter was, unfortunately, obviously wrong and the tax authorities were obviously right, the prospects of appeal looked rather hopeless. However, giving up without a fight was not an option and the solution presented itself eventually! The point is that during the desk audit inspectors may use only figures from an audited declaration, and not any other. However, this time apart from the declaration, they have used other documents which later provided the grounds for additionally charged taxes. As can be seen from the above, there was a clear substitution of notions. Virtually, it was a remote documentary audit, but it has been formalized as a desk audit, which, in turn, makes it a serious procedural violation resulting in cancellation of tax assessment notice.


There are dozens, if not thousands, of law firms that offer services associated with appealing against tax decisions. Jusguard stands out among them, since settlement of tax disputes is our key specialty. This is what we know like the back of our hand and achieve success where the others give up.




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