Author: Maryna Pokotylo, Partner at F&P
After receiving a tax assessment notice, most entrepreneurs are faced with a choice: file a complaint with the State Tax Service or go straight to court. The Internet is full of advice of both types. Some say: “an administrative complaint is a waste of time, the STS never reverses its own decisions”. Others: “go through the administrative procedure first, it’s free and gives additional benefits”. The truth, as always, depends on the circumstances of a particular case.
In this article, we will analyze not the general theory, but the specific logic of decision-making: in which cases an administrative complaint makes practical sense, when it is harmful, and what has changed in the position of the Grand Chamber of the Supreme Court regarding the appeal deadlines in 2025.
What happens to the money while you appeal
This is the first thing you need to understand, because it is the key to the right decision.
While the TND is under administrative appeal, the monetary obligation is considered to be inconsistent (para. 56.15 of the TCU). This means: The STS cannot collect the money by force, cannot send a tax demand, cannot apply a tax lien. The filing of a complaint automatically ‘freezes’ the execution of the tax violation notification letter.
The same thing happens when going to court: the monetary obligation remains unreconciled until the court decision enters into force (clause 56.18 of the TCU).
However, there is a critical point: there is a period of time between the completion of the administrative appeal and the filing of a lawsuit in court when the obligation becomes agreed upon. On the day you receive the STS decision on the complaint, the procedure is considered completed, and from that moment on, you have 10 business days to pay the amount – or file a lawsuit and freeze it again. If you miss this point, the STS has the right to start collecting.
Deadlines: what the Grand Chamber of the Supreme Court has changed
The issue of time limits for appealing against a tax violation notification letter has been controversial for years. The TCU contains three different provisions regulating these terms, and they do not fit together:
- CLAUSE 56.19 OF THE TCU: 1 month after completion of the administrative procedure (if a complaint was filed with the STS)
- Article 122 of the CAPU: 6 months from the date of learning about the violation of rights (if no complaint was filed)
- Article 102 of the Tax Code: 1095 days (statute of limitations)
In its ruling of 16.07.2025 in case No. 500/2276/24, the Grand Chamber of the Supreme Court put an end to the situation: clause 56.19 of the Tax Code is a special rule and has priority. That is, if you have passed an administrative appeal, you have exactly one month to file a lawsuit. Not 1095 days, not 6 months – one month. And 1095 days from Art. 102 is the statute of limitations for preserving the right, not the time limit for filing a lawsuit.
If you have not filed a complaint with the STS, you have 6 months under Art. 122 of the CAPU.
Practical conclusion: if you choose to file an administrative complaint, be prepared to file a lawsuit within a month of receiving the response. If you are not sure that you will have time, it is better to go to court immediately and have 6 months.
When an administrative complaint makes sense
You want to see the reasoning of the State Tax Service. The response to the complaint is essentially the STS’s position in writing. You will find out what they will rely on in court and will be able to prepare counterarguments in advance.
The amount is small, and the case is simple. There are cases when the STS actually cancels a tax violation notification letter at the stage of administrative appeal. Usually, these are technical errors, arithmetic inaccuracies, or situations where the inspector has gone beyond his authority so obviously that even the STS recognizes it.
You want to buy time. The administrative appeal procedure takes 20 business days (+ extension to 60 days if the STS sends a notice). All this time, the money is frozen. For businesses that need time to prepare for court or resolve other issues, this can be a tactical advantage.
When you need to go to court right away
The amount is significant, and the risk of recovery is real. If it is a matter of millions of hryvnias and you are not sure that you will have time to file a lawsuit within a month after the administrative appeal, do not take any risks. Go to court right away.
The case is complex and requires a full judicial investigation. An administrative complaint is considered by the STS without the participation of the taxpayer, without questioning witnesses, and without requesting evidence. A court is a full-fledged process where you can file a motion to request documents, engage an expert, and question STS officials.
10-day window: the most dangerous moment
Upon completion of the administrative procedure, the monetary obligation is considered settled. The taxpayer has 10 business days to pay (clause 57.3 of the Tax Code). If you do not pay and file a claim within these 10 days, the State Tax Service has the right to start collecting: send a tax claim, apply a lien, initiate the seizure of assets.
Therefore, if you have chosen the path of an administrative complaint, you need to have a statement of claim ready by the time you receive a response. Do not start preparing it, but have it ready. Otherwise, you risk finding yourself in a situation where the 10-day period expires and the claim has not yet been filed.
Objections to the inspection report: the zero stage that everyone forgets
Even before the TND, at the stage of the audit report, the taxpayer has the right to file an objection within 10 business days (clause 86.7 of the Tax Code). This stage is often ignored – in vain. An objection forces the STS to either reject your arguments (and then you see their position) or partially admit mistakes (and reduce the amount of the TND). In addition, objections document your position, which is useful both for an administrative appeal and for the court.
The ideal strategy is: objection to the act → administrative complaint (if it makes tactical sense) → lawsuit. At each stage, you should document your position and arguments in writing.
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