The deadline for the first appeal depends on the type of appeal procedure:
-
Administrative procedure: An appeal may be filed within 10 business days following the date of receipt of the tax assessment notice.
-
Judicial procedure: As a general rule, the lawsuit may be filed within (i) three months - where the taxpayer has used an administrative appeal procedure or (ii) within six months following the date of receipt of the tax assessment notice (if the administrative procedure has not been invoked). the six-months term is disputable due to a controversy in the Tax Code of Ukraine that suggests that if the tax notice is not contested within 10 business days, the additional tax assessment and penalties (if any) are deemed to be accepted by the taxpayer and must be settled. The taxpayer is not precluded from subsequently challenging the tax notice within the six-month period. If, however, the tax notice is contested within 10 business days following the receipt thereof (including if such is issued after the completion of the administrative procedure), the tax and penalties payment obligation does not arise until the matter is resolved in court.
-
Taxpayers are free to proceed with either an administrative or a judicial appeal procedure.
-
By applying to the court, a taxpayer automatically loses the right to an administrative appeal.
-
For the administrative appeal procedure, it could take up to 120 calendar days (which may be final in the case of a successful decision in favor of a taxpayer).
-
For the judicial appeal procedure, the time for reaching a final national decision may vary and depends on the courts' and judges' workload. The Administrative Procedural Code provides for a "reasonable term" for a case to pass all court instances and reach a final decision. In practice, reaching a final decision may take years. From our practice, it takes up to seven years to obtain the cassation court decision in extreme cases.
- Start: Both the tax authorities and taxpayers are entitled to initiate a mutual agreement procedure (MAP). Taxpayers have the right to present a MAP case within 1095 days from the date the tax assessment becomes "agreed" (e.g., not challenged following the results of the tax audit).
If so allowed by the applicable tax treaty, both resident and non-resident taxpayers may initiate a MAP in Ukraine.
Ukrainian residents are also allowed to initiate a MAP in Ukraine should they believe that a foreign State taxes them contrary to the provisions of the applicable tax treaty with Ukraine (provided it is allowed by the MAP procedure of the relevant tax treaty).
Upon receipt of the application from the taxpayer, the competent authority has 60 business days for deciding whether or not to commence a MAP.
- Conduct of the proceedings:
National appealing procedures cannot coexist with the MAP.
Once a MAP has commenced, the tax assessment notice will be suspended.
The law does not prescribe an overall timeframe of a MAP.
- Completion of proceedings: Once a MAP is completed, the decision is binding on the tax authorities.The taxpayer may not reject a MAP decision and/or appeal it via an administrative procedure. Instead, the taxpayer is entitled to appeal such a decision with the relevant administrative court in Ukraine.
- Other actions: Taxpayers have the right to stop the MAP at any stage by lodging a special application to the competent tax authority.