Here is a detailed analysis of the court ruling in case No. 908/1787/25:
1. **Subject of the dispute:** Determining the lawfulness of writing off a natural person’s tax debt as bad debt within the framework of debt restructuring proceedings in an insolvency case.
2. **Main arguments of the court:**
– The court emphasized that the application of the consequences provided for in Part 2 of Article 125 of the Code of Ukraine on Bankruptcy Procedures (hereinafter referred to as the “Code”) (write-off of tax debt incurred within the last 3 years) is not automatic and cannot be based solely on a formal comparison of dates.
– The Supreme Court emphasized that debt write-off is an element of the restructuring procedure; therefore, it must take place under judicial supervision with a mandatory verification of the debtor’s financial status.
– The court is obliged to examine the bona fide conduct of the debtor, the results of the audit of their declarations, and the completeness of asset disclosure, which the courts of lower instances failed to do.
– It is important that the court must establish the moment the tax debt arose as the first day of default on the payment of an already agreed monetary obligation, rather than merely acknowledging the fact of the existence of the debt.
– The court noted that the absence of an approved restructuring plan does not exempt the court from the duty to verify all circumstances of the case, as the institution of insolvency cannot be a mechanism for the formal avoidance of obligations.
– Since the local court simultaneously wrote off the debt and requested additional evidence regarding the debtor’s assets, the Supreme Court deemed such a decision premature and not based on a comprehensive examination of the case materials.
– **Legal Precedent:** In its ruling, the court refers to the legal position set forth by the Judicial Chamber for Bankruptcy Cases of the Commercial Cassation Court on May 27, 2026, in case No. 908/1194/24, which is mandatory for consideration and clarifies the approaches to the application of Article 125 of the Code.
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 Commercial Court of Zaporizhzhia Oblast.
