Contents
- What is unblocking tax invoices
- Types (stages) of unblocking a tax invoice
- Unblocking tax invoices in administrative procedure
- Unblocking tax invoices in court
- Unblocking tax invoices: why choose WINNERLEX
- Where to start unblocking a tax invoice with WINNERLEX
- What legal services does WINNERLEX provide to unblock the registration of tax invoices
- What documents are required to unblock tax invoices
- The cost of unblocking tax invoices
What is tax invoice unblocking?
Tax invoice unblocking is a comprehensive legal service provided to taxpayers and aimed at the administrative and/or judicial cancellation of tax authority decisions to suspend the registration of a tax invoice (TI)/adjustment calculations (AC) or to refuse to register a TI/AC in the Unified Register of Tax Invoices (URTI).
Tax lawyers of WINNERLEX successfully provide the TI unblocking service within the framework of tax practice to our clients in Kyiv, Kyiv region, Dnipro, Kryvyi Rih, Zaporizhia, Kharkiv, Odessa, Lviv, Zhytomyr, Cherkasy, Chernihiv, Kirovohrad, Mykolaiv, Kherson, Vinnytsia, Rivne, Lutsk, Uzhgorod, Sumy and other cities of Ukraine.
Why is it necessary to unblock a tax invoice?
Blocking tax invoices can have a number of negative consequences.
First of all, blocked tax invoices worsen relations with counterparties, who cannot receive a tax credit and thereby suffer financial losses. In addition to refusing further cooperation, a blocked TI can result in the recovery of losses or penalties in favor of the counterparty or underpayment by the counterparty of part of the cost of goods/services, in cases where this is provided for by the contract.
Regarding relations with the state, it should be noted such possible consequences of blocking the registration of tax invoices as penalties. Thus, if a blocked TN is not registered in the Unified State Register of Tax Invoices within 365 days, the tax authority may impose a fine in the amount of 50% of the amount of VAT liability specified in such an invoice.
Therefore, unblocking a tax invoice is necessary to avoid the listed problems.
Types (stages) of unblocking a tax invoice
Unblocking a tax invoice can be carried out both administratively and in court.
The administrative procedure involves unblocking a TI/AC without going to court, by submitting relevant documents to the tax authority and is usually used at the initial stage.
Judicial unblocking of tax invoices should be resorted to only if the administrative procedure has not achieved its result.
So from this point of view, the administrative procedure is the first, and the judicial procedure is the second stage or stage of the process of unblocking a tax invoice.
Unblocking tax invoices in administrative procedure
The administrative procedure for unblocking tax invoices is used primarily when the registration of a tax invoice is suspended and involves the preparation and submission of explanations to the tax authority by the taxpayer. In the event of a subsequent refusal to register a TI/AC, an appeal may be filed against the relevant decision of the tax authority. At this stage unblocking a tax invoice is the most economical solution for the client.
The pre-trial procedure for unblocking tax invoices allows you to avoid lengthy litigation, preserve the taxpayer’s reputation and quickly regain control over financial transactions. It is important to know that timely submission of documents and correct execution of explanations or complaints can significantly speed up the unblocking process.
When unblocking a tax invoice the most important thing is to legally correctly provide information about the legality and reality of the business transaction. But at the same time, a formal collection and description of documents is not enough. An even worse idea is to use template forms of explanations or complaints.
The information in the explanation or complaint must be presented in compliance with legal norms, with an analysis of specific transactions and with an overview of potential tax risks. Documents prepared for the purpose of unblocking tax invoices without involving tax lawyers may not only be ineffective, but also provoke negative consequences. Among them are the classification of the enterprise as risky (with corresponding consequences for counterparties), unscheduled inspection, losses in courts or even criminal proceedings. This may happen because the tax inspectorate interprets the received data not in favor of the payer due to errors or contradictions in the documents.
The effectiveness of the administrative procedure for unblocking TI is evidenced by the fact that at this stage the tax lawyers of WINNERLEX achieve unblocking of tax invoices/correction calculations in more than 95% of cases.
As an example of our practice of unblocking TI in a pre-trial procedure, we can cite a situation when we unblocked a client, an importer of technological equipment classified as risky according to item 8 of Risk Criteria, VAT invoices of more than 1 million hryvnias without going to court. This was the result of a package of documents professionally drawn up by our lawyers and a complaint against the decision to refuse registration of NN to the Central Level Commission (learn more).
Do you need to write an explanation or complaint to a blocked tax invoice? Click on the button below, leave your contact information and we will contact you promptly. Or call the numbers indicated on the site.
Unblocking tax invoices in court
In some situations, the tax authority refuses to unblock a tax invoice based on the results of the administrative procedure. This, in particular, applies to enterprises classified by the tax authority as so-called “risky”. In such a case, the decision of the tax authority to refuse to register a tax invoice can and should be appealed in court by filing a corresponding claim with the administrative court.
When considering such a case, the court first examines the documents and explanations that were initially submitted to the tax authority to unblock the TI. Therefore, it is very difficult to correct errors made when submitting explanations or complaints about the decision to suspend the registration of tax invoices in court. This emphasizes the importance of the stage of administrative appeal of blocking the TI/AC. That is why tax dispute lawyers at WINNERLEX begin to form the correct legal position and strategy of the taxpayer in the event of a trial already at the stage of explanations and complaints to the tax authority.
Based on the results of the consideration of the claim, the administrative court may declare the tax authority’s decision to refuse to register the tax invoice unlawful and cancel it, as well as oblige the tax authority to register the tax invoice in the Unified Register of Tax Invoices (URTI).
Sometimes the tax authority delays in voluntarily implementing a court decision to register a tax invoice. In such a case, the court decision may be subject to enforcement.
Unblocking tax invoices: why choose WINNERLEX
Tax lawyers of WINNERLEX have extensive experience working both in tax authorities and in judicial protection of business. We know the algorithms of tax authorities’ work and keep our finger on the pulse of judicial practice development.
Managing Partner of WINNERLEX Anna Vinnichenko is the author and leading practitioner of workshops on unblocking tax invoices, minimizing tax risks of contracts, tax optimization and tax audit support, both for business and lawyers.
All this allows us to successfully protect clients’ interests when unblocking tax invoices.
An additional advantage of working with WINNERLEX is the status of a bar association, which allows, when winning a dispute in court, to recover from the tax authority in favor of the client the funds spent on legal services in full or in part.
Where to start unblocking a tax invoice with WINNERLEX:
If you have a problem unblocking a tax invoice, you can send us a message via the feedback form directly from this page or via a messenger convenient for you, or call us at the phone numbers listed on the site.
After contacting and studying the documents you have, tax lawyers from WINNERLEX will promptly provide you with a preliminary consultation on the possibility and prospects of unblocking a tax invoice, as well as inform you of the cost and approximate terms of the relevant stages of the process.
After talking with our lawyers, you will have no doubts about their experience and professionalism.
What legal services does WINNERLEX JSC provide to unblock the registration of tax invoices:
- Legal consultations on unblocking tax invoices
- Submission of lawyer requests to the tax service
- Preparation of explanations for blocked tax invoices
- Compiling a list of necessary documents that must be provided to the tax authority for the registration of a specific tax invoice
- Appealing the decision on compliance with risk criteria
- Appealing in administrative and/or judicial proceedings against decisions of the State Tax Service Commission on refusal to register tax invoices
- Support of enforcement proceedings for the forced execution of court decisions on the obligation of the tax service to register TI
- Appeal to the administrative court to establish judicial control over the implementation of a court decision on the obligation of the State Tax Service to register tax invoices
- Preparation and submission of complaints to the Business Ombudsman Council regarding the illegal blocking of tax invoices.
What documents are required to unblock tax invoices:
In each individual case, tax lawyers at WINNERLEX determine which documents must be submitted to unblock a tax invoice with explanations, a complaint or a statement of claim, taking into account the features of a specific economic transaction and the specifics of the enterprise’s activities.
In general, usually, in order to unblock tax invoices, an enterprise must provide the following documents to the tax authority:
- regarding a specific economic transaction: powers of attorney, foreign economic contracts, agreements; warehouse documents (inventory lists), including invoices, acceptance and transfer acts of goods (works, services) taking into account the presence of certain standard forms and industry specifics, invoices; settlement documents and/or bank statements from personal accounts, primary documents regarding the supply/purchase of goods/services, storage and transportation, loading, unloading of products; documents confirming the conformity of products (quality certificates, declarations of conformity, certificates of conformity), the availability of which is stipulated by the contract and/or legislation;
- regarding the specifics of the economic activity of the enterprise: order on the appointment of the director / chief accountant; constituent documents; staffing list; documents indicating the presence of own / leased fixed assets; availability of vehicles; availability of permits (licenses, permits); information on the submission of the table of data of the value added tax payer, form -20 OPP; information on the main buyers / sellers; payment of taxes, etc.
Cost of unblocking tax invoices
The cost of unblocking a tax invoice depends on the complexity of the case and the volume of documents confirming the business transactions for which the tax invoices were blocked.
The cost of unblocking tax invoices is fixed in the contract concluded with each client and on the basis of which payment for services and further work is made.
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Types of legal assistance in unblocking tax invoices |
Service price (from)* |
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Explanations for a blocked tax invoice |
from 2 000, 00 UAH |
|
Appeal against the decision of the regional level commission on refusal to register TI to the State Tax Service of Ukraine with explanations |
from 2 000, 00 UAH |
|
Appealing the decision of the regional level commission on refusal to register TI in the administrative court (full support in one court instance) |
from 15 000, 00 UAH |
|
Explanations for the taxpayer data table |
from 3 000, 00 UAH |
|
Application for exclusion of a taxpayer from the list of risky taxpayers |
from 5 000, 00 UAH |
Practice experience: 19 years
Specialization: litigation support, tax, customs and antitrust practices, agricultural law, IT and M&A
Practice experience: 21 years Specialization: support of economic, civil, labor and administrative disputes, energy
Practice experience: 11 years Specialization: tax, customs and corporate disputes, support of inspections, contractual activities
Practice experience: 6 years
Specialisation: business and civil law, tax and customs practice, corporate law, registration and reorganisation of business
Practice experience: 11 years Specialization: support of economic, civil, labor and administrative disputes, inspections
After receiving a receipt on the suspension of registration of a tax invoice in the Unified Register of Tax Invoices, the taxpayer has the right to submit to the regulatory authority through his electronic office the relevant written explanations and a package of documents that will confirm the reality of the economic transaction that resulted in the formation of the tax invoice.
The taxpayer has the right to submit in electronic form information (explanations) and copies of documents confirming his non-compliance with the criteria for the riskiness of the taxpayer. Based on the results of consideration of the specified information (explanations) and copies of documents, the regional commission sends a response decision within a period not exceeding 7 business days.
When submitting explanations or a complaint, we recommend providing the maximum package of documents: after all, there is extensive case law according to which failure to provide all necessary documents during pre-trial settlement is grounds for refusing to satisfy claims for unblocking tax invoices.
- A value-added tax payer has the right to submit to the supervisory authority his written explanations regarding the business transaction that resulted in the formation of a tax invoice, with the mandatory provision of supporting primary and other documents.
If, after suspending the registration of a tax invoice, including as a result of considering the taxpayer’s explanations and documents, the tax authority has made a decision to refuse to register a tax invoice, the taxpayer may appeal such a decision administratively to the Central Level Commission within 10 business days or directly to the administrative court.
- If the Central Level Commission has left the complaint against the decision to refuse to register a tax invoice without satisfaction, then in this case the decision to refuse to register a tax invoice can be appealed to the administrative court.
contracts with annexes (specifications, additional agreements to them), on the basis of which business transactions were carried out, as a result of which tax invoices were formed, the registration of which was suspended;
powers of attorney, which formalize the authority of persons receiving products in the interests of the taxpayer to carry out the transaction;
primary documents on the supply/purchase of goods/services, storage and transportation, loading, unloading of products, warehouse documents (inventory descriptions), including invoices, acceptance and transfer certificates of goods (works, services), expense invoices;
settlement documents or bank statements from personal accounts;
documents confirming product conformity (declarations of conformity, quality certificates, certificates of conformity).
The regional commission must consider the submitted application and copies of documents regarding the exclusion of a taxpayer from the list of risky enterprises within seven working days from the date of their receipt and make an appropriate decision. If the commission does not make an appropriate decision within these seven working days, the taxpayer must be excluded from the list of risky enterprises.
The taxpayer’s presence on the list of risky enterprises does not completely prevent the unblocking of his tax invoices. But it should be understood that the tax authority will not register tax invoices for a “risky” enterprise on its own. To do this, you will need to go to court and prove the illegality of the tax authority’s decision.
One of the numerous examples where we proved to the court that the tax authorities had no grounds to block the personal income tax of our client, who was recognized as “risky” under clause 8 of the Criteria, can be found at this link.
