Constitutional Court Decision
The Second Senate of the Constitutional Court issued on 26 November a decision confirming the legality of financial sanctions for the late registration of tax invoices. The complaint was filed by Andritz Hydro GmbH.
Positions of the parties
The company challenged provisions of the Tax Code, arguing the sanctions were excessive. The tax authority imposed a fine of UAH 468,000 on Andritz Hydro for the late registration of an invoice. The firm maintained that the violation was technical and did not affect the timeliness of tax payment.
Court's findings and safeguards
The Constitutional Court found that such sanctions pursue a legitimate aim — ensuring discipline in the VAT area and protecting economic security. The court concluded that a fine equal to 20% of the VAT amount was proportionate and did not upset the balance between the interests of the state and business.
At the same time, the court noted that by its nature and severity the sanction is close to a criminal penalty, so the legislator must ensure individualized liability and the presumption of innocence. The supervisory authority must prove the taxpayer's guilt rather than automatically imposing sanctions. The court did not review in this case the procedure for proving guilt and the related procedural safeguards.
- In early November, a relaxation of blocking criteria reduced the blocking rate to 0.2%.
