We have important information for you regarding the widespread cases of imposing fines for violating the deadlines for settlements within foreign economic activity (FEA)!
As our recent projects show, plenty of our the clients receive decisions from the tax authorities on imposing fines for violating the 180-day settlement deadline for export transactions of goods and services, established by the National Bank of Ukraine.
As evidenced by the audit reports, which have already become the subject of our research and subsequent appeals, the tax authorities impose sanctions even in cases where the settlements were made within due deadlines. In their justification, the tax officials point out shortcomings they identified while reviewing bank statements.
Such shortcomings may include the failure to specify the details of the foreign economic activity contracts in the payment purpose, which, according to the tax authorities, makes it impossible to identify the connection between the payment and the contract; making of payments by the non-residents from a bank account not specified in the contract; and other insignificant mistakes or errors made by the non-resident when filling out the payment document.
Although the likelihood of successfully appealing against such fines is usually very high in the cases of our clients, we believe it is necessary to warn all those conducting business with the non-residents and draw your attention to the following recommendations from us:
• Carefully review the provisions of FEA contracts regarding the procedure and deadlines for settlements;
• Specify in the FEA contracts or additional agreements the requirement to indicate the contract and invoice details in the payment documents;
• Check the accuracy of the payment details of the parties specified in the FEA contracts;
• Ensure that the FEA contracts specify the mandatory settlement through and to the payment details listed in the contracts.
Author: Vasyl Klym, Attorney-at-Law and Partner at ArtesLex
10.09.2024
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