Author: Anastasia Holovatyuk, Lawyer at F&P
For many entrepreneurs, the suspension of tax invoice registration comes as an unpleasant surprise. You have made a real business transaction, drawn up a tax invoice, sent it for registration in the Unified Register of Tax Invoices, and received a receipt of suspension. Your buyer cannot form a tax credit, and you face a fine for late registration. At the same time, you have not committed any violation.
This situation is widespread. According to the State Tax Service, in 2024, about 1.4% of all invoices were stopped, and by the beginning of 2025, this figure had dropped to 0.9%. It may seem like a small amount, but for a particular business that has had an invoice for several million hryvnias blocked, statistics are little consolation. Let’s analyze how the system works and what to do at each stage.
How the SMKOR system works: why your invoice was stopped
The Risk Assessment Criteria Monitoring System (RACS) checks each tax invoice automatically at the time of submission for registration. The procedure for this check is defined by the Resolution of the Cabinet of Ministers of Ukraine No. 1165 dated 11.12.2019 (as amended, the most recent ones are Resolution No. 1187 dated 18.10.2024 and No. 1048 dated 26.08.2025).
The waybill goes through several stages of verification. First, the system checks whether it falls under the criteria for unconditional registration (clause 3 of Order No. 1165). For example, if the volume of supply in the current month is less than UAH 1 million, the invoice is usually registered automatically. If not, the system checks the payer for compliance with the risk criteria (Annex 1) and the transaction for compliance with the risk criteria of the transaction (Annex 3).
If the payer or the transaction meets at least one risk criterion, the registration is suspended. However, there is an exception: if the payer has a positive tax history (meets the indicators from Annex 2), the suspension does not occur even if the transaction risk criterion is triggered.
In practice, the most common cases where invoices are suspended are in such cases:
- The payer has recently been registered as a VAT payer
- The volume of the transaction is significantly higher than usual for this payer
- The supplier shows signs of risk (even if you are not aware of it)
- The VAT payer data table is missing or not accepted
- The transaction falls under the risk criteria for UKTZED or DKPP codes
Step 1: Receive a receipt – analyze it
A suspension receipt is not a sentence. It is the beginning of the procedure. The receipt should indicate which criterion was triggered, the calculated values of the indicators, and the STS’s proposal to provide explanations and documents. Read it carefully: your further strategy depends on which criterion was triggered.
There are often situations when the receipt contains a general wording without specifics – “meets the criterion of riskiness of transactions” without explaining which one. This may already be grounds for appeal, as the Supreme Court has repeatedly stated that the decision of the supervisory authority must be motivated with specific grounds.
Step 2: Submit explanations and documents
You have the right to submit an explanation with copies of documents confirming the reality of the transaction. The deadline is 365 calendar days from the date of suspension, but you shouldn’t delay: your counterparty is waiting, and the penalty for late registration is calculated from the first day of the delay.
What to submit: contract, acts, invoices, bill of lading, payment orders, certificates, specifications – anything that proves that the transaction actually took place. The limit is 100 files, each up to 2 MB, in PDF, PNG or JPG format.
Practical advice: don’t limit yourself to the minimum. Attach warehouse documents, photos of the goods, and correspondence with the counterparty. The more evidence of reality, the less likely you are to be rejected. However, the explanations should be clear and structured, not a chaotic set of files.
Step 3: VAT payer data table
If you have not yet submitted a data table, submit it along with your explanations. The table informs the State Tax Service about the types of your activities and the range of goods/services. If the table is accepted, a significant part of your invoices will continue to be registered without stopping.
However, there is a caveat: the percentage of rejections of the tables remains high. According to the State Tax Service, in December 2024 it was 52.2%, in February 2025 it dropped to 38.7%. That is, almost every third table is returned. Most often, the reason is insufficient detail in the explanations or inconsistency of the NACE/ NACE codes with the actual activity. If the table is not accepted, it can also be appealed.
Step 4: Commission decision – refusal or registration
Your invoice, together with explanations and documents, is reviewed by the commission of the supervisory authority. The review period is 5 business days (clause 44 of Procedure No. 520). The commission makes one of two decisions: to register or to refuse.
If you are denied, it is important to analyze the decision. The Supreme Court has consistently supported the position that the decision to refuse must be motivated. Wording such as “failure of the taxpayer to provide copies of primary documents confirming the information specified in the TI/CA” without specifying which documents are missing is grounds for reversal in court. This is a well-established position, which is confirmed by numerous rulings of the Supreme Court.
Step 5: Administrative appeal
A complaint against the decision to refuse can be filed with the STS within 10 business days (clause 56.3 of the TCU, taking into account the peculiarities of martial law). The complaint is submitted in electronic form. It may be accompanied by documents – but no more than 100 files.
To be honest, the chances of satisfying the complaint at this stage are slim: The STS rarely overturns the decisions of its own commissions. But this step has a tactical value: first, you record your position, second, you exhaust the pre-trial procedure (although it is not mandatory), and third, you receive an official response, which can then be used in court.
Step 6: Filing a lawsuit with the administrative court
Judicial appeal is the main tool of defense. A lawsuit is filed with the district administrative court. If you have passed the administrative procedure, the deadline for filing a lawsuit is 1 month after the completion of the administrative appeal. If you did not go through the administrative procedure, the deadline is 6 months.
In the statement of claim, you should ask to recognize the decision to refuse as unlawful, cancel it and oblige the State Tax Service to register the tax invoice in the Unified Register of Tax Invoices. The court evaluates not only your documents, but also the legality of the commission’s actions: whether the decision was motivated, whether specific grounds were provided, whether the procedure was followed.
The practice of the Supreme Court is quite positive for taxpayers. The court has repeatedly stated that the controlling authority must specifically indicate which documents are missing or which information is unreliable. General wording is not a proper motivation for refusal.
When to hire a lawyer
At the stage of submitting explanations and documents, many entrepreneurs do it on their own or with the help of an accountant. And that’s fine – if the transaction is simple, the documents are in order, and you already have experience with this procedure.
But if you are denied and the case goes to court, it’s a different story. Preparation of a statement of claim, formulation of claims, justification of interim relief, representation in court – all this requires legal expertise. A mistake at this stage can cost you not only a blocked invoice, but also a fine for late registration.
We specialize in tax disputes and have experience in appealing against decisions of the State Tax Service commissions, both administratively and in court. If your invoice has been suspended or you have received a refusal, send us a receipt and the commission’s decision. We will analyze the situation and tell you which strategy is optimal in your case.
Do you have a similar situation? Send us your documents and we will analyze your prospects for free.
Phone: +38 093 722 56 33
Email: fo@fedoryshyn.com
