In practice, taxpayers often face the problem when tax payment and tax administration issues are treated differently by different laws. When this happens, it is unclear which provision of the law should be applied in each particular situation. Thus, the Law of Ukraine "On the settlement of taxpayers' obligations with the budget and state funds" (hereinafter - the Law "On tax settlement") and the Law of Ukraine "On land payments" provide for different periods for filing applications with the tax authorities for refunds of overpaid taxes - three and two years, respectively.

 

In connection with this, one of the disputes considered by the Higher Administrative Court of Ukraine was the refund of overpaid land tax. The tax authority assessed a municipal company for additional amounts of land tax based on information from the State Land Cadastre, and this tax was paid in part. Subsequently, this basis for calculating land tax was declared null and void in court, and the land tax assessment was also declared null and void by the Commercial Court.

 

The company requested that the tax authorities refund the overpaid land tax. However, the tax authorities refused to refund the tax because the two-year term envisaged for such a repayment by the Law of Ukraine "On land payments" had already expired.

 

The company brought the case to the Commercial Court. The Court of First Instance satisfied the plaintiff's request, and the Court of Appeals left this judgment unchanged. The Higher Administrative Court of Ukraine did not change these decisions supporting their decision with the following arguments:1 In accordance with the Cooperation Procedures of the State Tax Administration of Ukraine, financial authorities and the State Treasury of Ukraine, taxes paid by mistake or overpaid taxes / duties (obligatory payments) are to be returned to the taxpayer upon the taxpayer's request, which should be submitted no later than three years following the day when the overpayment took place.

 

Also, according to the Law of Ukraine "On tax settlement," requests for refunds of overpaid taxes / duties (obligatory payments) can be submitted no later than three years following the day of overpayment or the day of receiving the right to reimbursement.

 

The Higher Administrative Court of Ukraine stated that the reference of the tax authority to the Law of Ukraine "On land payment", under which "the tax accrued by mistake could be not be refunded if more than two years had past" is ungrounded, since the tax notification under which the land tax liability was paid had been declared null and void. Thus, this provision of the Law could not be applied.

 

Thus, in this case the Higher Administrative Court supported the taxpayer's position by applying a more favorable provision of the law.

 

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