The procedure for appealing against the blocking of registration of tax invoices in the Unified Register of Tax Invoices is regulated by Art. 201.16 of the Tax Code of Ukraine (hereinafter - TCU). The decision to refuse in the registration of the tax invoice (hereinafter - TI/calculation of the adjustment (hereinafter - CA) in the Unified Register of Tax Invoices (hereinafter referred to as the "URNI") may be appealed in the administrative or judicial way.

What is the procedure for appealing the blocking of the registration of tax invoices/calculation of adjustments?
The administrative procedure provides the filing a complaint to the State Fiscal Service of Ukraine on the decision of the Commission of the State Fiscal Serivice of Ukraine to refuse to register a tax invoice in the Unified Register of Tax Invoices, while a judicial appeal provides filing a lawsuit to the appropriate court.
We pay attention of taxpayers, that the provisions of Art. 201.16 Tax Code of Ukraine provides certain compulsory actions of the taxpayer, which must be done before applying with a complaint in the administrative or judicial proceedings.
The Tax Code notes that the taxpayer shall receive an electronic receipt from the tax authority if the registration of the tax invoice is stopped (blocked). The receipt indicates the proposal to the taxpayer to provide explanations and/or copies of documents (by exhaustive list), sufficient for the adoption of the decision by the fiscal service to register such a tax invoice/calculation of adjustments in the Unified Register of Tax Invoices (clause В.201.201.1 Tax code of Ukraine).
Written documents and/or explanations can be submitted by the taxpayer to the Fiscal Service at the place of registration of the taxpayer within 365 days, and the tax authority shall transfer them itself to the commission of the Fiscal Service of Ukraine. The Tax Code and the Code of Administrative Proceedings (hereinafter - CAP of Ukraine) do not contain provisions allowing the taxpayer to initiate an administrative or judicial appeal’s procedure without submitting appropriate explanations to the Fiscal Service in accordance with Art. 201.16.1 and 201.16.2 of the Tax Code of Ukraine. Administrative complaints and lawsuits, in our opinion, will be returned to the taxpayer with an indication that there is no object of dispute and the full procedure of appealing is not observed. Therefore, it is necessary for the taxpayer to submit explanations and additional documents to the Fiscal Service, in case of revealing his desire, to carry out the procedure of administrative or judicial appeal against actions of the tax authority which block and refuse to the register the tax invoices. After submitting explanations and additional documents, the commission of the Fiscal Service of Ukraine makes a decision on registration or refusal to register a tax invoice/calculation of an adjustment in the Unified Register of Tax Invoices.
At the taxpayer’s choice, the decision of the commission of the Fiscal Service can be appealed:
• in administrative way – to the Fiscal Service of Ukraine
• in a court.
What are the advantages of administrative appeal?
The advantage of the administrative appeal against the decision to refuse to register a tax invoice in the Unified Register of Tax Invoices/calculation of adjustments to the Fiscal Service of Ukraine is its free-of-charge. The complainant does not need to pay a court fee for filing such a complaint. But the number of positively satisfied complaints in the Fiscal Service of Ukraine remains small. Therefore, usually, after an administrative appeal, the complainants appeal to the court with lawsuit.
What procedural law applies to disputable legal relations?
The Code of Administrative Proceedings of Ukraine shall be applies to resolve a dispute with the tax authorities regarding the decision to refuse to register a tax invoice/calculation of an adjustment in the Unified Register of Tax Invoices is.
What is the jurisdiction of litigation regarding the refusal of tax authorities to register tax invoices?
Disputes regarding the appeal against blocking refusal to register tax invoice/calculation of adjustments in the Unified Register of tax invoices shall be held in the district administrative courts at the location of the claimant or at the location of the defendant (part 1 and 2, article 19 CAP of Ukraine). The right to choose the jurisdiction is determined by the plaintiff. So, if the plaintiff-legal entity situated in the Shevchenkivskyi district of Kiev, the case shall be held in the District Administrative Court of Kiev.
How properly to form a claim a in an appeal against a decision to refuse to register a tax invoice?
Attention must be paid to the provisions of Part 2 of Art. 162 of the CAS of Ukraine when formulating the claims for the appeal of a refusal (blocking) of the registration of the tax invoice/calculation of the adjustment in the Unified Register of Tax Invoices. In case of satisfaction of an administrative lawsuit the court may adopt a resolution on:
1) to cancel the unlawful decision of the Fiscal Service or any of its provisions, actions or omissions;
2) to obligate the respondent to perform certain actions;
3) to obligate the respondent to refrain from committing certain actions;
4) to recover funds from the defendant.
The court may adopt another resolution that would guarantee the observance and protection of the rights, freedoms, interests of the company and citizen, and other subjects in the sphere of public legal relations from violations by the subjects of power. As noted above, the complainant can not in appeal the block of the registration of the tax invoice/calculation of the correction (the receipt), which is sent to the taxpayer in accordance with No. 201.16.1 of the Tax Code of Ukraine. The complainant can appease the decision of the Fiscal Service to refuse to register the tax invoice/calculation of the adjustment, or the decision to register the tax invoice/calculation of the adjustment in the Unified Register of Tax Invoices.
So, the plaintiff can combine several claims in one lawsuit. If the plaintiff appealed against the decision of the tax authority to block/refuse to to register the tax invoice/calculation of the adjustment (administrative appeal preceding the judicial appeal), then the pleading part of the lawsuit may look like this:
1. Recognize the decision of the tax authority (Fiscal Service of Ukraine) to refuse to register the tax invoice as illegal and cancel it.
2. To oblige the tax authority (Fiscal Service of Ukraine) to take actions on registration (to register) of the tax invoice/calculation of the adjustment in the Unified Register of Tax Invoices.
The court fee is paid for each claim separately in the amount of one living wage per one person, on January 1 of the current year (currently 1,600 hryvnyas). So, if the court fee for one claim is 1,600 hryvnyas, then for two claims in one lawsuit 1600 * 2 = 3200 hryvnyas. A separate claim must be: 3. To recover all court expenses from the defendant. For the last claim, as a rule, the fee shall not be paid.
What if the tax authority (Fiscal Service) does not adopt a decision to register or refuse to register the tax invoice/calculation of the adjustment?
According to paragraph 201.16.3 of the Tax Code of Ukraine, the decision to register or refuse to register the tax invoice/calculation of the adjustment in the Unified Register of Tax Invoices shall be adopted and sent to the taxpayer within five working days following the day of receipt of explanations and documents. Sometimes, there are cases when the commission of the Fiscal Service fails to make a decision on refusal of registration or registration of a tax invoice/calculation of an adjustment in the Unified Register of Tax Invoices. The claims in the lawsuit in such a case shall be: 1. Recognize the inactivity of the tax authority (Fiscal Service) for not adopting a decision on the base of given explanations and additional documents on the registration of the tax invoice/calculation of the adjustment in the Unified Register of Tax Invoices is unlawful. 2. To oblige the Fiscal Service of Ukraine to adopt a dicision on the base of the explanations which were submitted by the taxpayer in accordance with the terms determined by law.
Who should act as the respondent in the case of appealing against the decision to refuse to register the tax invoice/calculation of the adjustment?
The respondent in the case must be the Fiscal Service of Ukraine, because the decision on refusal to register a tax invoice is made by a commission of the Fiscal Serive of Ukraine. We recommend to involve in the case the State Tax Inspectorate of the relevant district as a co-defendant or a third party, because the court decision shall be carried out by the State Tax Inspection of the district.
What documents must be submitted to the court together with the lawsuit?
The Ministry of Finance of Ukraine, by its Order No. 567 from 13.06.2017, approved "An exhaustive list of documents sufficient for making a decision on the registration of a tax invoice/calculation of adjustments in the Unified Register of Tax Invoices." We recommend to file the following documents indicated in this list to the court as evidences:
contracts, including foreign economic contracts, with attachments, correspondence with counterparties;
contracts, power of attorney, acts of the taxpayer's governing body;
primary documents for the supply/purchase of goods/services, storage and transportation, loading and unloading of goods, warehouse documents (inventory records), including invoices/invoices, acts of acceptance and transfer of goods (works, services), taking into account the existence of certain typical forms and branch specificity, invoices;
settlement documents, bank statements from personal accounts;
documents confirming the conformity of products (declaration of conformity, quality certificates, certificates of conformity), the availability of which is stipulated in the contract and/or legislation.
Additional evidence (documents) must be sued in order to win a case of refusal to register a tax invoice/calculation adjustment?
Except for the documents specified in the clause "B" of Art. 201.16.1 of the Tax Code of Ukraine, it is desirable to attach documents characterizing the company's activity in general:
availability of employees (copies of labor books, copies of employment contracts);
availability of assets on the balance sheet: computers, vehicles, tables, other production equipment;
availability of other similar contracts/contracts (for similar amounts, goods, services), as well as confirmation that such contracts/contracts have already been executed (contracts, certificates of work performed, consignment note, tax invoice, for example, the purchase of consumables: cement, sand, wood, other, letters, preliminary contracts that will confirm the intention of the party execute the contract);
availability of rented premises, other.
To some extent, it is possible to draw an analogy with the evidences that shall be submitted when appealing against the tax notice-decisions and recognizing transactions as "insignificant". Evidence’s base will help the plaintiff to refute the position of the fiscal service in the court regarding "risky" operations, prove the reality of the economic activity of the enterprise and the business transaction, on which the tax invoice is registered. Separately, it is desirable to prove that the service or goods that the buyer bought from the plaintiff, he needed for his activities (for example, a construction firm buys a stone and sand). Confirmation of this may be an extract from the Register of the companies indicating the types of activities, as well as a list of buyer's documents that confirm its economic activities, purchasing power, and not fictitiousness.
When will the tax invoice be registered?
According to the paragraph 201.16.4. Of the Tax Code of Ukraine, a tax invoice/calculation of an adjustment, the registration of which in the Unified Register of Tax Invoices was stopped, is registered on the day of occurrence of one of the following events:
a) a decision was made to register the tax invoice/calculation of the adjustment in the Unified Register of Tax Invoices;
b) a court’s decision to register the relevant tax invoice/calculation of the adjustment in the Unified Register of Tax Invoices became valid.
Thus, a positive decision of an administrative court that has entered into legal force which satisfied the lawsuit to oblige the State fiscal service to take actions to register a tax invoice/calculation of an adjustment (register) in the Unified Register of Tax Invoices is the basis for such registration. The decision of the district administrative court comes into force after the expiration of ten days for its appeal. If the decision of the court was not appealed, then it takes into effect on the eleventh day after its adoption (the date of the decision is not counted). If in the case the party filed an appeal, the decision of the court of first instance shall enter into legal force on the day of the declaration of its decision by the court of appeale.
Artem Sereda
Tax adviser
allTax
legal and tax adivers