Colleagues, we are sharing another illustrative decision regarding advance corporate income tax payments for fuel retail licensees — Case №160/30213/25 (court of first instance).
1. Position of the Plaintiff — TVIN, LTD LLC
The Plaintiff requested the court to:
- Annul Desk Audit Report №52429 dated Sept 23, 2025;
- Annul STS Decision №651 dated Oct 8, 2025, regarding the revocation of two licenses;
- Annul Tax Assessment Notice (TAN) №0566340411 dated Oct 13, 2025 (penalty and obligation totaling 132,000 UAH).
Arguments:
- Actual operations only commenced on Aug 6, 2025 (after signing a contract and receiving the first batch of gas).
- Prior to this date, no fuel sales were conducted.
- The double penalty (license revocation + fine) is disproportionate.
2. Position of the Main Directorate of the STS in Dnipropetrovsk Region
- As of June 1, 2025, the Plaintiff had two retail fuel points listed in the Unified Register of Licensees.
- According to the Tax Code of Ukraine (TCU), the obligation was to pay 120,000 UAH by June 20, 2025 (60,000 UAH per site).
- Payment only occurred on Aug 20 and Sept 19, 2025, confirming late payment.
- The law provides no exceptions for advance payments based on actual activity — it is charged for the mere fact of holding a license and having the site listed in the register.
3. The Court’s Position and Reasoning
The court examined the electronic evidence and established that while the payments were indeed late (by 61 and 91 days), the interpretation of the law requires a deeper look.
Regarding the Desk Audit Report:
The court refused to recognize the report as “illegal.”
- Reasoning: An audit report is not an “administrative decision.” It carries no legal consequences on its own but serves as evidence. Its validity can only be assessed within a dispute over the decisions made based on it.
Regarding License Revocation and the TAN:
The court focused on the phrasing of sub-para. 141.14.1 of the TCU: “taxpayers carrying out retail trade of fuel shall pay…” The central question: At what point is a person considered to be “carrying out trade”?
| Tax Code of Ukraine (TCU) | Law of Ukraine №3817-IX |
| Focuses on taxpayers “carrying out”retail trade. | Defines retail trade as a sequence of actions: acquisition/receipt AND further sale/release. |
The Court’s Key Accents:
- License Automated Trade: The mere possession of a license does not automatically mean trade is being “carried out.”
- Nature of the Tax: This dispute concerns corporate income tax, not excise tax. Therefore, the decisive factor is the generation of income (the start of sales).
- Advance Payment Logic: While it is a “payment in advance,” it must be linked to the existence of an activity that forms the tax base.
4. Why This Decision Matters for the Market
The court has effectively drawn a line between holding a license and actual operations. This is the first time the relationship between the TCU, Law №3817-IX, and the fundamental nature of income tax has been analyzed so clearly. The court explicitly noted that the legislator refers to “taxpayers who carry out trade,” not just “every site listed.”
What’s Next?
This is a first-instance decision, and an appeal is expected. However, it already provides a robust argumentative base for licensees who have obtained a license but have not yet physically started selling fuel.
In our current reality, time is a strategic resource, and judicial practice evolves faster than company procedures. It is vital not just to know the decisions, but to understand their practical application.
We invite you to share your view: Is the current information support sufficient for your management decisions? What consequences of such court cases are you already seeing in your operations?
For more cases like this, follow the analytical channel “Wind of Tax Changes” by Tetyana Potopalska, who provides systematic support on licensing and advance payments for the fuel market.
