Business will have to pay more for the courts with government agencies. It is bad. Government agencies will also have to pay more. It is good.
Amendments to the Law of Ukraine “On Court Fee” became effective since September 1. Now a single approach to determining the rates of fee in all courts is applied, and it makes equal the courts of general, economic and administrative jurisdiction. The rates are also set only by two criteria:
- who filed a lawsuit – a legal entity or an individual;
- nature of a dispute (property or non-property).
In addition, the law envisages exclusion of public authorities from the subjects that are exempt from payment of court fee.
The amendments to the law will mostly affect the enterprises, because the rates of court fee for their claims have increased significantly. Moreover, if restriction of maximum rate is preserved in commercial proceedings (although increased from 60 to 150 minimum wages), there is no maximum rate in administrative proceedings. Thus, according to Art. 4(2) of the Law of Ukraine “On Court Fee”, when filing property-related administrative claim 1.5% of the amount of claim, but not less than one minimum wage, shall be paid.
As the Supreme Administrative Court of Ukraine noted in the letter dated January 18, 2012, No. 165/11/13-12, the category of property disputes also includes claims on declaring unreasonable additional charge of taxes and fees, accrual of penalties, etc.
Thus, when challenging the tax assessment notice of the fiscal service on additional charge of taxes and/or penalties, e.g. a plaintiff must pay to the budget a court fee of UAH 300,000 for UAH 20 mln, and this is only for filing and consideration of a lawsuit in the court of first instance. If the payer loses the case, he will have to pay 110% or UAH 330,000 for consideration of the appeal, and 120%, or UAH 360, 000 for consideration of the cassation appeal.
It should be noted that along with the increase of rates the legislator also changed the procedure for reimbursement of court fee if the court decides in favor of the taxpayer. If earlier the fee was reimbursed from the state budget, after introducing amendments the state duty twill charged directly from the government agency on account of budget allocations for this purpose. We can assume that the budget, as always, will lack funds for reimbursement of these costs that may adversely affect the rights and interests of taxpayers.
The only advantage for taxpayers is that now the fiscal authorities are not exempt from the payment of court fee and must pay the same rate. If the trial court takes the side of a taxpayer, the tax inspection will also have to pay 110% or 120% of the rate of court fee. It should be noted that the law requires the Cabinet of Ministers to ensure the relevant financing of government agencies.
Thus, we share the opinion of the draftsmen: such decision will make impossible abuse of procedural rights by public agencies, in particular in cases of unjustified recourse to the courts and irresponsible appeal against the court decisions. We believe that now officials of fiscal authorities, when planning to appeal against the court decision rendered in favor of the taxpayer, will take a more balanced approach, also taking into account justifiability of their legal position in a dispute and availability of legal grounds for revision of court decisions.
However, we should not forget that the ultimate goal of increasing the rates of court fee is still filling the budget, which as the legislators forecast should increase two times within 12 months. Accordingly, in terms of filling the budget it becomes extremely disadvantageous to end disputes in the first instance. In this regard, we assume that the courts will use the opportunity to fill the budget with additional revenues from the court fee for filing appeals and cassation appeals.