LETTER OF THE SUPREME ADMINISTRATIVE COURT OF UKRAINE

of June 2, 2011 No. 742/11/13-11

To chairmen of Appeal administrative courts

On January 1, 2011 the Tax code of Ukraine (Item 1 of the Section XIX "Final provisions" of the mentioned Code) became effective.

For the purpose of identical application of separate instructions of the Tax code of Ukraine by administrative courts and the Code of administrative legal proceedings of Ukraine the Supreme administrative court of Ukraine pays attention to it.

According to Item 44.1 of article 44 of the Tax Code of Ukraine for the purposes of the taxation taxpayers shall record the income, expenses and other indicators connected with determination of the taxation objects and/or tax liabilities based on source documents, bookkeeping registers, the financial reporting, other documents connected with calculation and tax payment and charges which conducting is stipulated by the legislation.

Forming of indicators of tax statements, customs declarations based on the data which are not supported by the documents which are determined by paragraph one of this Item is forbidden to taxpayers.

At the same time of 16.07.1999 No. 996-X_V "About financial accounting and the financial reporting in Ukraine" is determined by article 1 of the Law of Ukraine that the source document is document which contains data on economic activity and confirms its implementation.

Therefore, any documents (including agreements, delivery notes, accounts and so forth) are valid source documents only in case of the actual implementation of economic activity.

If the actual implementation of economic activity was not, the relevant documents cannot be considered as source documents for the purposes of conducting tax accounting even in the presence of all formal details of such documents which are provided by the current legislation.

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