Pre-litigation settlement of tax disputes

An administrative appeal against a tax assessment notice is the only way to challenge additional tax charges; it costs nothing and immediately halts the accrual of tax debt. But there is a catch that most advisory services fail to mention: once the State Tax Service has rejected your claim, you have only one month left to take the case to court — instead of the six months you would have had if you’d gone to court straight away.

Therefore, the decision to ‘try to reach an agreement with the tax authorities first’ should not be automatic. Sometimes a pre-court appeal is the right first step; sometimes it is better to go straight to court. The right choice depends on the strength of your arguments and on how uncompromising the position of the higher-level tax authority is.

+38 095 554-54-24 — legal advice

How to lodge a complaint

The appeal must be lodged with the higher-level supervisory authority within 10 working days from the day following receipt of the tax assessment notice (paragraph 56.3 of Article 56 of the Tax Code of Ukraine). If you miss this deadline, the right to an administrative appeal is lost; the only option remaining is court proceedings, subject to a different time limit.

The appeal is considered within 20 calendar days; the head of the authority may extend the time limit to 60 days by notifying the taxpayer in writing. If a decision on the appeal is not sent on time — it is deemed to have been upheld in favour of the taxpayer, and the tax assessment notice is cancelled (paragraph 56.9 of the Tax Code of Ukraine). It is worth being aware of this rule and monitoring it yourself: the tax authorities are not always quick to acknowledge their own inaction.

The taxpayer has the right to participate in person in the consideration of the appeal — to submit additional documents and provide oral explanations. It is worth exercising this right: a written appeal without the taxpayer being present is more likely to be unsuccessful.

The main advantage

Whilst the administrative appeal is ongoing, the financial liability is deemed unresolved. This means:

• no tax debt arises;
• accounts and assets are not frozen;
• penalties and interest are not charged on the amount being contested;
• the taxpayer is not included in the registers of unscrupulous taxpayers or tax debtors.

For a business carrying out its core activities, this is often more important than the outcome of the appeal itself: it buys time without the risk of paralysing the company’s operations.

The main pitfall

This is where the timing becomes critical. The deadline for bringing a claim to court:

• 6 months from the date of receipt of the tax assessment notice — if you have not lodged an appeal with the State Tax Service;
• 1 month from the date on which you became aware of the decision on the appeal (or the 20/60-day period for its consideration was due to expire) — if you did file an appeal.

A typical scenario we see in practice: the taxpayer lodges a complaint ‘just in case’, receives a rejection two months later, lets their guard down — and a month later forgets to take the matter to court. The time limit expires, and the court refuses to open proceedings regardless of how right the taxpayer is on the merits of the case.

A rule worth remembering: the decision on whether to lodge a complaint should be made immediately upon receipt of the tax assessment notice — bearing in mind that, following a rejection, there will be only one month left to take the matter to court.

When to go to the State Tax Service first, and when to go straight to court

A complaint is justified when:

• the breach is obvious and procedural — a calculation error, a breach of the audit procedure, or missed limitation periods. A higher authority sometimes acknowledges such matters without dispute;
• time is needed — it is important for the company that its accounts are not frozen immediately;
• the amount is small, and the legal costs are disproportionate.

It is better to go straight to court when:

• the dispute concerns the substance of the transactions — the ‘genuineness of commercial transactions’, the nullity of legal acts. In such cases, the higher authority of the State Tax Service almost always upholds the position of the lower authority;
• the amount is substantial, and a month wasted on a complaint that is known to be doomed to failure carries the risk of missing a more favourable deadline;
• security for the claim is required — suspension of the tax assessment notice is only possible through the courts.

Administrative appeal against a tax assessment notice when tax invoices are blocked

The same logic applies — only the deadlines are stricter. An appeal against the commission’s decision to refuse registration of a tax invoice must be lodged within 10 working days. At the same time, it is worth challenging the ‘high-risk taxpayer’ status — otherwise, subsequent invoices will be blocked until the main issue is resolved.

How we work

1. We analyse the tax assessment notice and the audit report — looking for both procedural breaches and substantive weaknesses.
2. We devise a strategy: whether to lodge an appeal or file a claim straight away, with a clear timeline for each subsequent step.
3. We prepare the complaint with a full body of evidence and calculations.
4. We represent the taxpayer in person during the consideration of the complaint.
5. We monitor the timeframes for consideration — and document any failure to act if the State Tax Service does not respond in time.
6. We prepare the claim in advance — so that, in the event of a rejection, we do not have to spend a month preparing it from scratch.

Cost of services

Administrative appeal free of charge — there is no state duty or fee for lodging a complaint.

Full price list · Appeals against tax assessment notices

Questions and answers (Administrative appeal against a tax assessment notice)

How long do you have to lodge a complaint with the State Tax Service?

10 working days from the day following receipt of the tax assessment notice. If you miss this deadline, your only option is to appeal through the courts.

How long does it take to consider a complaint?

20 calendar days, with a possible extension to 60 days by written decision of the head of the authority. If a response is not sent on time, the complaint is automatically deemed to have been upheld.

Does a tax debt arise whilst the appeal is ongoing?

No. The liability remains unresolved until the administrative appeal is concluded; no debt is accrued and accounts are not frozen.

What should you do if the State Tax Service rejects your appeal?

You have one month from the date of receiving the decision (or the expiry of the period for its consideration) to file a claim in court. It is best to prepare the claim in advance, whilst awaiting a response to the appeal.

Is it always worth lodging a complaint before going to court?

No. If the dispute concerns the substance of commercial transactions rather than procedure, a complaint rarely helps, and it is better to go straight to court, making full use of the six-month time limit.

Can you participate in the consideration of the complaint in person?

Yes, and it is advisable to do so: the taxpayer has the right to submit additional explanations and documents directly to the authority considering the appeal.

What documents are required for an appeal?

The tax assessment notice, the audit report, any objections to the report (if submitted), all source documents relating to the disputed transactions, and calculations.

Consulting a solicitor at Svarog regarding the pre-litigation settlement of tax disputes

Send us the tax assessment notice and the audit report — we will calculate the time limits and give you our honest opinion: whether it is worth lodging a complaint with the State Tax Service, or whether it is better to prepare a claim for court straight away, whilst the full time limit for appeal is still open.

+38 095 554-54-24 · Kyiv, 7 Khoriva Street, Office 2 (Podil) · Mon–Fri 9:00–18:00