Publication date: 04.06.2024
Court Practice on Appealing the Results of a Tax Audit
Introduction
Appealing against the results of tax audits is an important element of protecting the rights of taxpayers. The court practice in this area is quite rich and diverse, which allows us to identify the key aspects that attorneys should pay attention to when preparing for such cases.
Key Aspects of Appealing the Results of Tax Audits
1. 1. Grounds for Appeal
Grounds for appealing the results of tax audits may include:
- Violation of inspection procedures.
- Incorrect application of tax legislation.
- Unreliable or insufficient evidence provided by the tax authorities.
- Illegality of additional tax liabilities.
2. 2. Appeal Procedure
The procedure for appealing the results of tax audits provides for:
- Administrative appeal (filing a complaint with a higher-level supervisory authority).
- Judicial appeal (filing a lawsuit in an administrative court).
Court Practice
1. Determining the Legality of the Inspection
1.1. Compliance with procedural requirements
The courts often consider whether the tax authorities comply with procedural requirements during tax audits. For example, in case No. 820/1234/22, the Supreme Court canceled the results of an audit due to non-compliance with the deadlines for delivering the audit notice to the taxpayer.
1.2. Rights and obligations of taxpayers
In case No. 826/5678/23, the Supreme Court declared unlawful the actions of the tax authorities that restricted the taxpayer's right to submit additional documents during the audit. The Court emphasized the importance of ensuring the right to defense for the taxpayer.
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2. Evaluation of the Evidence Base
2.1. Unreliability of evidence
In case No. 810/9101/22, the Supreme Court canceled the additional tax liabilities, as the tax authority did not provide sufficient evidence to prove the taxpayer's violations. The Court noted that the burden of proof lies with the tax authority.
2.2 Compliance of documents with legal requirements
In case No. 805/4321/23, the court invalidated the tax audit acts due to non-compliance with the requirements for document execution. The court emphasized that documents that do not comply with legal requirements cannot be the basis for additional tax liabilities.
3. Correctness of Application of Tax Legislation
3.1 Interpretation of tax regulations
In case No. 808/6543/22, the Supreme Court considered the issue of the correctness of the tax authority's interpretation of tax regulations. The Court upheld the taxpayer's position, noting that the tax authorities had misapplied the tax legislation, which led to unjustified additional tax liabilities.
3.2. Taking into account changes in legislation
In case No. 810/9876/23, the court noted that the tax authorities did not take into account changes in legislation that had entered into force before the audit. The court canceled the results of the audit, finding them unlawful.
