Tax officials proved in court illegality of the company's assignment of the VAT amounts to the tax creditChapter: News

Decision of the Supreme Court as a part of the panel of judges of the Cassation Administrative Court supported position of Main Directorate of the State Tax Service in Poltava region in case No. 816/1583/15 on the unreality of business operations with the counterparties LLC "P", LLC "C", LLC "O", LLC "V" ", LLC "G", LLC "K", PP "R".

Supreme Court stated that very fact that the Claimant has tax invoices issued on the supplier’s behalf is not unconditional proof of reality of business operations with him, while for tax accounting it is the fact of delivery by the supplier that is indicated in primary documents provided by the taxpayer that matters to confirm the tax credit.

Court noted that the mere fact that at the time of case's consideration no judgments had been passed cannot refute the authenticity of explanations regarding the nature of concluded agreements and actual implementation of operations based on these agreements.

Part 6 of Article 78 of the Code of Administrative Procedure of Ukraine stipulates that the court verdict in a criminal proceeding, decision to close criminal proceedings and release a person from criminal responsibility, or the court resolution in case of administrative offense, which have entered into force, are binding on the administrative court considering the case about legal consequences of actions or inactions of a person in respect of whom judgment, resolution or court decision was passed, only in the question of whether these actions (inactions) took place and whether they were committed by this person.

Supreme Court upheld legal opinion of the court of first instance and appellate instance, in which, taking into account circumstances established in criminal cases, they came to the conclusion that product transport invoices, copies of which were submitted to the court by the plaintiff to confirm transportation of products from the contractors LLC "P", LLC "C", LLC "O", LLC "V" ", LLC "G" are not properly executed and signed by authorized persons reporting documents that testify to the fact of transportation of products from the specified business entities.

Supreme Court also took into account conclusion No. 1200 of the forensic handwriting examination on materials of criminal proceedings No. 32015170090000003, compiled on 18.12.2015, according to which signatures in tax invoices issued by the LLC "K" to the Plaintiff, in column "signature and surname of a person, who made tax invoice" were not executed by PERSON_5, but by another person.

Under such circumstances, tax invoices issued on behalf of the LLC "K" cannot be considered documents duly executed and signed by authorized persons, which prove the fact of the purchase of products and therefore assignment of the VAT amounts reflected in them to the tax credit is groundless.

As follows, tax invoices, which became basis for the tax credit formation, issued on behalf of a person who denies his participation in creation and activity of the plaintiff's counterparty, in particular, in signing of any primary documents, cannot be considered properly executed and signed by authorized person as reporting documents certifying the fact of the purchase of products and therefore it is illegal to attribute the VAT amounts reflected in them to the tax credit.