Presented for your attention is a landmark appellate court decision that holds significant importance for all fuel retail licensees.

Court Case №340/3632/25 Third Appellate Administrative Court, Resolution dated December 16, 2025 Dispute Category: Revocation of a retail fuel license due to alleged non-payment of advance corporate income tax payments.

Position of the Licensee (TOTKORN LLC)

• The retail fuel license was obtained on December 5, 2024, but actual business operations did not commence until February 1, 2025.
• The State Tax Service (STS) demanded advance tax payments from the date the license was issued, rather than from the date operations actually began.
• The regulatory body failed to conduct a desk audit (kameralna perevirka) and did not properly establish the legal fact of non-payment.

Position of the State Tax Service (STS)

• The tax authority argued that advance payments must be made starting from the month following the entry of the retail point into the Unified Register.
• For the period of January–March 2025, the STS identified an underpayment of 120,000 UAH, despite the fact that the company had paid 30,000 UAH in both February and March.
• On April 30, 2025, an “order” was issued to revoke the license (the court noted that under Law No. 3817, a “decision” to terminate the license should be adopted, not an “order”).

Position of the Court

The Appellate Court upheld the findings of the court of first instance, stating:

1. A violation of tax legislation can only be established based on the results of an official audit, not an internal memo (violation of sub-para. 75.1.1 of the Tax Code of Ukraine).
2. The licensee’s economic activity began on February 1, 2025, not on the date the license was granted.
3. The regulatory body failed to prove the fact of non-payment of the advance tax in the manner prescribed by law.The STS appeal was dismissed, and the lower court’s ruling remains unchanged.

Key Legal Finding

The revocation of a retail fuel license without conducting a desk audit and without proper evidence of non-payment of advance tax contributions is illegal.

Additionally: On January 22, 2026, the Supreme Court refused to open cassation proceedings regarding the STS appeal, finalising the legal position of the lower courts.

Why This Decision Matters for the Market

This case highlights a systemic issue: the uncertainty surrounding exactly when the obligation to pay advance tax arises, and the attempt to apply excessive sanctions against businesses without following the procedures mandated by the Tax Code of Ukraine.

FEBA consistently emphasizes:

• Fiscal instruments must be applied strictly within the limits of the law.
• License revocation must be a measure of last resort, not an automatic reaction by regulatory authorities.

A detailed analysis of this and similar cases is regularly published on the analytical channel “Wind of Tax Changes” by Tetyana Potopalska, an expert in indirect taxation who systematically handles licensing and advance payment issues for the fuel market.