1. The subject of the dispute is the appeal against tax assessment notices, by which the Company’s tax liabilities for income tax and value-added tax were increased, the negative value of the income tax object was decreased, and penalties were applied for violation of settlement terms in the field of foreign economic activity and other violations of tax legislation.<\/p>\n
2. The court of cassation agreed with the conclusions of the courts of previous instances, which satisfied the Company’s claims, noting that the taxpayer has the right to form a tax credit and expenses if the business operations are actually carried out and confirmed by proper primary documents. The court emphasized that the tax authority did not provide sufficient evidence of the absence of a real nature of business operations, and references to violations of tax discipline by the taxpayer’s counterparties are not sufficient grounds for refusing to recognize the tax credit and expenses if the taxpayer acted with due diligence and was not aware of the illegal activities of the counterparties. The court also took into account the practice of the Grand Chamber of the Supreme Court regarding the individual responsibility of the taxpayer and the need for the controlling body to prove the unreasonableness, bad faith, or lack of due diligence in the taxpayer’s actions. The Court also noted that it departs from the conclusion of the Supreme Court of Ukraine, stated in the resolution of December 1, 2015, in case No. 826\/15034\/17, that the status of a fictitious, illegal enterprise is incompatible with legal entrepreneurial activity, since status in the legal sense is a list of rights and obligations of a particular subject. At the same time, no regulatory legal act in Ukraine contains a definition of the status of a fictitious enterprise.<\/p>\n
3. The Supreme Court dismissed the cassation appeal, and the decisions of the previous instances remained unchanged.<\/p>\n