attorney, managing partner
Primary Advisors LLC
In the context of this topic, I propose to consider the current legal positions of the Supreme Court on taxation in bankruptcy proceedings. According to the author of this article, these issues are relevant due to changes in bankruptcy legislation, as well as changes in the approaches of the Supreme Court in cases of claims of tax authorities against legal entities in respect of which bankruptcy proceedings have been opened.
- Subject Jurisdiction Disputes. Bankruptcy.
There is a consistent practice of the Supreme Court on the application of the rule of law in such legal relations on this issue. In particular, the Supreme Court proceeds from the fact that the Code of Ukraine of bankruptcy procedures is special for the regulation of legal relations in connection with the initiation of a plaintiff’s bankruptcy case and classifies as monetary obligations and obligations to pay taxes, fees (mandatory payments).
For such monetary obligations, a special procedure has been established – through the consideration of a dispute in relation to such claims in a claim proceeding by the economic court, which is in charge of the bankruptcy case. At the same time, the legislation on bankruptcy issues does not distinguish between creditor claims according to the subject of their presentation: the creditor is a person of public law or the creditor is a person of private law. This procedure for filing claims against the debtor concerns the current claims of creditors. The above-mentioned practice of the Supreme Court was formed on the basis of the legal position expressed in the decision of 02/11/2021 in case No. 560/2855/20, as well as with reference to the positions of the Grand Chamber of the Supreme Court, in particular, in the decisions of 02/27/2019 in case No. 826/1866/17 and from 23.09.2020 in case No. 826/16976/16, in which the Grand Chamber noted that cases in the bankruptcy procedure belong to the jurisdiction of an arbitration court.
As for the procedure for considering the bankruptcy creditor claims of the supervisory authorities against the debtor, the procedure for their repayment is regulated only by the Code of Ukraine from bankruptcy procedures, it is clearly defined by clause 87.10 of the Tax Code. In addition, the Grand Chamber of the Supreme Court, in its judgment of 23.09.2020 in case No. 826 / 16976/16, has already expressed its position that the dispute on the collection of competitive claims in favor of the tax authority should be considered in the course of economic proceedings.
However, by a decision of 27.05.2021 in case No. 140/704/19, the Supreme Court granted the motion to transfer the case to the Grand Chamber on the following grounds: in the decision of the CAS of the Supreme Court of 29.01.2019 in case No. 0670/4698/12, which the courts applied in resolving this dispute, the court of cassation expressed a legal position, which boils down to the fact that from the moment the court issued a ruling to initiate proceedings in the case of bankruptcy of a taxpayer with the requirements of the supervisory authority that were not included in the bankruptcy claims in the case of bankruptcy, the procedure for repayment of monetary obligations provided for by the Tax Code of Ukraine is subject to application. In particular, the Supreme Court noted that the Grand Chamber has not yet expressed its position on the subject matter jurisdiction of cases on the current claims of the tax authorities after the commencement of bankruptcy proceedings.
In this context, the Supreme Court referred to the following norms of law: Clause 8, Part 1, Art. 20 of the Commercial Procedural Code of Ukraine, which stipulates that cases that fall within the jurisdiction of economic courts include, in particular, bankruptcy cases and cases in disputes with property claims against the debtor in respect of whom bankruptcy proceedings have been opened, including number of cases on disputes on invalidation of any transactions (agreements) concluded by the debtor; collection of wages; reinstatement of officials and officers of the debtor at work, with the exception of disputes on the determination and payment (collection) of monetary obligations (tax debt), determined in accordance with the Tax Code of Ukraine, as well as disputes on invalidating transactions at the request of the controlling body in the exercise of its powers determined Tax Code of Ukraine. In addition, in the context of case No. 140/704/19, the Supreme Court referred to the principle of official clarification of all the circumstances in the case, the principle of legal certainty, the principle of prohibiting the restriction of the rights belonging to the participants in the trial. These principles, in the conviction of the Supreme Court, testify in favor of considering disputes on the determination and payment (collection) of monetary obligations (tax debt) by administrative courts.
So, it will be possible to speak unequivocally about legal certainty in the issue of considering these disputes within the framework of a bankruptcy case by an economic court or according to the rules of administrative proceedings by an administrative court after the Grand Chamber has expressed its position on case No. 140/704/19.
- Subject Jurisdiction Disputes. Liquidation.
The Supreme Court, in its judgment of 08.09.2020 in case No. 320/6098/19, concluded that the dispute over the obligations of the liquidation commission to accept the creditors ‘claims of the tax authority into the register of creditors’ claims is not public law and does not fall under the jurisdiction of the administrative courts. According to the Supreme Court, the dispute should be resolved in the course of economic proceedings, since the claims relate to the fulfillment of the company’s monetary obligations to pay taxes and fees (mandatory payments) in the liquidation of a legal entity.
- On conducting an audit, determining tax liabilities after the opening of bankruptcy proceedings.
The Supreme Court, by its decision of 23.04.2020, in case No. 813/3342/16 overturned the decisions of the courts of first and appeal instances and issued a new decision to dismiss the taxpayer’s claim to cancel tax notifications, decisions and tax claims.
In this case, the courts came to the conclusion that since the decision of the economic court initiated bankruptcy proceedings and introduced a moratorium, the defendant had no legal grounds to appoint and conduct an inspection of the company declared bankrupt and calculate the penalty on the obligations, are considered extinguished.
The Supreme Court noted that the debtor was released from liability only for failure to fulfill the obligations for which the moratorium was imposed. For current obligations, the debtor is responsible on a general basis until the economic court adopts a decision to declare him bankrupt and open a liquidation procedure. To reinforce this position, the Supreme Court referred to the ruling of 10/23/2019 in case No. 2340/4157/18 as part of the judicial chamber for consideration of cases on taxes, fees, other obligatory payments of the Administrative Court of Cassation, in which the judicial chamber departed from conclusions Of the Supreme Court, set out in the decisions of 09/11/2018 (case No. 823/2240/17) and of 05/14/2019 (case No. 2340/4250/18). In addition, the Supreme Court referred to a similar legal position in the judgments of 11/06/2018 in case No. 820/17352/14 (K / 9901/8561/18), of 11/14/2019 in case No. 580/708/19 (К / 9901/22610/19), dated 11/18/2019 in case No. 2340 / 4224/18 (К / 9901/7707/19), dated 12/10/2019 in case No. 2340/4387/18 (К / 9901/30412/19).
- Consequences of opening a liquidation procedure in a taxpayer’s bankruptcy case.
In a ruling dated 12/18/2019, in case No. 808/3975 / the thirteenth Supreme Court clarified that the consequences of opening a liquidation procedure apply to all creditors’ claims, including current ones. In particular, from the date of the adoption of the decision on declaring the debtor bankrupt and the opening of the liquidation procedure, the accrual of forfeit (fines, penalties), interest and other economic sanctions for all types of bankruptcy debts shall cease. In favor of this legal position, the Supreme Court cited similar legal positions set forth in the decisions of the Supreme Court of 08/22/2019. In case No. 812 / 2468/14 of 06/25/2019, in case No. 826/22478/15.
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