PENALTY IN TAX OBLIGATIONS. JUDICIAL PRACTICE.

The Tax Code of Ukraine (hereinafter referred to as the Tax Code of Ukraine) defines that a penalty is the amount of funds in the form of interest, calculated on the sums of tax liabilities and/or on the sums of fines (financial) sanctions that have not been paid within the time limits set by the law, but also accrued in other cases and according to the procedure provided for by the Code of Ukraine or other legislation, the control of compliance with which is entrusted to supervisory bodies.

According to clause 14.1.39 clause 14.1 of Art. 14 of the Code of Ukraine, the monetary liability of the taxpayer is the amount of money that the taxpayer must pay to the relevant budget or to a single account as a tax liability and/or other liability, the control over the payment of which is entrusted to the supervisory authorities, and/or a fine (financial) sanction imposed on a taxpayer in connection with his violation of the requirements of tax legislation and other legislation, the control of compliance with which is entrusted to the controlling bodies, as well as sanctions for violation of legislation in the field of foreign economic activity and interest.

According to clause 14.1.156 clause 14.1 of Art. 14 of the PC of Ukraine tax liability – the amount of funds that a taxpayer, including a tax agent, must pay to the relevant budget or to a single account as a tax or fee on the basis, in the manner and terms determined by tax legislation (including the amount of funds specified by the taxpayer in the tax bill and not paid within the term established by law), and/or the amount of funds generated at the expense of tax benefits that were used by the taxpayer for a purpose other than the intended purpose or in violation of the procedure for their provision established by the PC of Ukraine and/ or the Customs Code of Ukraine.

Thus, the PC of Ukraine distinguishes between the concepts of tax liability and monetary liability.

From the analysis of the specified norms of tax legislation, it can be seen that the tax liability is determined in the absence of a violation of the norms of tax legislation by the taxpayer in the tax declaration or by the controlling body in the tax notification-decision. The monetary obligation may include fines and is determined in the event of violation of tax legislation by the taxpayer independently in accordance with the procedure provided for in Article 50 of the Criminal Code of Ukraine, or by the controlling body in a tax notification-decision.

Clause 57.3 of Article 57 of the Criminal Code of Ukraine establishes that in the event of a monetary liability being determined by the controlling body on the grounds specified in subsections 54.3.1 – 54.3.6 of Clause 54.3 of Article 54 of the Criminal Code of Ukraine, the taxpayer is obliged to pay the accrued amount of monetary liability obligations within 10 working days following the date of receipt of the tax notice-decision, except for the cases when such a taxpayer initiates the procedure of appealing the decision of the controlling authority during such a period. In the event of an appeal against the decision of the supervisory authority on the accrued amount of the monetary liability, the taxpayer is obliged to independently repay the agreed amount, as well as penalties and fines, if any, within 10 working days following the date of such agreement.

According to clause 14.1.175 clause 14.1 of Art. 14 of the PC of Ukraine, tax debt is the sum of the agreed monetary obligation, not paid by the taxpayer within the period established by the PC of Ukraine, and the outstanding interest accrued in the manner determined by the PC of Ukraine.

In connection with the adoption of the Law of Ukraine No. 1797-VIII of 21 December 2016 “On Amendments to the Tax Code of Ukraine on Improving the Investment Climate in Ukraine”, which entered into force on December 1, 2017, clause 129.1 of the Code of Ukraine was presented in the following version:

“129.1. Accrual of penalties begins: