Ilyashev & Partners Secures 10-fold Reduction in Tax Fine for Ukrainian Manufacturer

Ilyashev & Partners Law Firm has successfully challenged a fine imposed by the tax authorities on a Ukrainian polymeric equipment manufacturer following an in-house audit and secured its 10-fold reduction.

In 2024, State Tax Service officials conducted an in-house audit of a Ukrainian company regarding compliance with the procedure for registering tax invoices and calculating adjustments to such VAT invoices in the Unified Register of Tax Invoices.

During the audit, the tax authorities found that the Ukrainian manufacturer had allegedly missed the deadline for registering adjustment calculations and imposed a heavy fine. To protect its interests, the Ukrainian manufacturer sought legal advice from Ilyashev & Partners Law Firm.

Ilyashev & Partners’ tax team prepared a complaint on behalf of the Ukrainian manufacturer and challenged the tax audit conclusions and the imposition of a fine through administrative procedure. After finding out the facts of the case, Ilyashev & Partners’ attorneys collected evidence that the conclusions of the State Tax Service audit report are false and subject to cancellation.

In particular, Ilyashev & Partners’ tax team provided irrefutable evidence that:

• the tax service did not establish the actual date of receipt of the adjustment calculations from which the deadline for registration during martial law should have been calculated and also incorrectly determined the deadline for registering the adjustment calculations in the audit report;
• the State Tax Service conclusions are not supported by any evidence of the actual dates of sending the adjustment calculations by the counterparty and their receipt by the manufacturer, i.e. they are assumption-based;
• the manufacturer’s documents that refuted the audit conclusions were not taken into account by the State Tax Service in Ivano-Frankivsk region, therefore the fine imposed by the tax authorities was based on assumptions without proper evidence.

After a detailed analysis of the arguments, the State Tax Service of Ukraine accepted Ilyashev & Partners’ legal position and cancelled the tax assessment notice for penalties imposition almost in full. Ilyashev & Partners will subsequently provide legal support in challenging the false conclusions of the audit report to completely cancel the fines and establish justice.

The case was handled by Ilyashev & Partners Tax team under the supervision of Ivan Maryniuk.