Greetings. As a lawyer with many years of experience, I have analyzed the court decision you provided. Here is a detailed analysis:
1. **Subject of the dispute:** Contestation by a taxpayer of tax authority decisions regarding the additional assessment of corporate income tax and VAT due to the alleged lack of reality of business transactions with a counterparty that exhibited signs of being fictitious.
2. **Court’s arguments:**
– The Court, referring to the position of the Grand Chamber of the Supreme Court, officially departed from the previous practice that automatically declared transactions with “fictitious” enterprises invalid.
– The Court emphasized that a court verdict against an official of a counterparty under Article 205 of the Criminal Code of Ukraine is not, in itself, unconditional proof of the unreality of transactions for the taxpayer.
– The determining factor for the Court must be the examination of the actual movement of assets, the existence of primary documents and their substantive content, rather than merely the formal status of the counterparty.
– A taxpayer cannot be held liable for the actions of their counterparty if they did not personally enter inaccurate information into documents and had no objective possibility to verify the supplier’s integrity.
– The lower courts erred by limiting themselves solely to referencing the verdict in the criminal case without properly examining the primary documents and the factual feasibility of performing the transactions.
– Since key primary documents referred to by the parties were absent from the case files, the Court concluded that it was impossible to reach a decision without their detailed examination.
3. **Court decision:** The Supreme Court set aside the decisions of the courts of first and appellate instances and remanded the case for a new trial to the court of first instance for a full and comprehensive clarification of the circumstances.
