1. The subject of the dispute is the appeal of tax notices-decisions by which the Company’s tax liability for income tax and value-added tax was increased.
2. The court of cassation agreed with the conclusions of the courts of previous instances, which satisfied the Company’s claims, based on the fact that business transactions with counterparties were confirmed by proper primary documents, real changes in the property status of the taxpayer occurred, and the acquired inventory was used in its own business activities. The court also took into account that there are no court verdicts regarding the officials of the counterparties that have entered into legal force, and the existence of only initiated criminal proceedings is not proper evidence of the unreality of business transactions. The court of cassation emphasized that the controlling body did not prove that the Company acted unreasonably, in bad faith, or without due diligence in the selection of counterparties and the use of primary documents. The court noted that a taxpayer cannot be held responsible for violations of tax discipline by its counterparties if it had real expenses in connection with the acquisition of goods (works, services) intended for use in its business activities.
3. The court dismissed the cassation appeal, and the decisions of the previous courts remained unchanged.
**** The court noted that the Grand Chamber of the Supreme Court in the ruling of July 7, 2022 in case No. 160/3364/19 departed from the conclusion of the Supreme Court of Ukraine, stated, in particular, in the ruling of December 1, 2015 in case No. 826/15034/17 (No. 21-3788a15), that the status of a fictitious, illegal enterprise is incompatible with legal business activity, and therefore the business transactions of such enterprises cannot be legalized even with formal confirmation by accounting documents.
