In July 2010 the Parliament of Ukraine established a new period of limitation for challenging decisions of state authorities in court. In particular, the amended version of the Code of Administrative Procedure (the "Code") now provides for a one-month period of limitation for challenging tax decisions on reassessment of tax liabilities in court, compared to the previous three-year period of limitation.
The wording of the amended provisions of the Code, however, is not exactly clear, which potentially may give room for inconsistent interpretation.
To clarify the position, the Highest Administrative Court of Ukraine issued a clarification letter on September 27, 2010 whereby it confirmed that a taxpayer is allowed to contest a decision in relation to reassessed tax liabilities in court within one month of receipt of the decision by a tax payer.
Although such clarification letters are not formally legally binding and a taxpayer may attempt to plead the ambiguity of the amended wording in the Code in order to argue a longer period of limitation, in practice, the lower courts tend to follow such clarifications of the Highest Administrative Court of Ukraine.
Shortening of the period of limitation will compel tax payers to take more rapid decisions regarding whether to dispute tax authority decisions. This may in turn have greater impact on Ukrainian subsidiaries of international companies, which tend to have more complex, and thus more time-consuming, approval procedures to pursue any such disputes.
Law: Law of Ukraine On Judicial System and Status of Judges No. 2453-VI dated 7 July 2010.
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The original publication date for this article was 20/10/2010.