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ArcelorMittal : Commentary of ArcelorMittal Kryvyi Rih on the court authorization of the Security Service of Ukraine to conduct a search at the enterprise

10/26/2020 | 11:10am EST
Commentary of ArcelorMittal Kryvyi Rih on the court authorization of the Security Service of Ukraine to conduct a search at the enterprise
Kryvyi Rih, October 20, 2020 Some Ukrainian media outlets spread information that on October 13, the Shevchenkivskyi District Court in Kiev decided to grant permission to the Security Service of Ukraine to conduct a search in Arselormittal Kryvyi Rih. As a law-abiding taxpayer and business entity, the company always works closely with all law enforcement agencies.

According to media reports, law enforcement officers accuse ArcelorMittal Kryvyi Rih of tax evasion and understatement of mandatory payments for land in 2015-2019. The SBU has already carried out investigative actions at the enterprise on the basis of the decision of the Shevchenko District Court of Kiev, related to tax payments. The company categorically rejects unfounded accusations, and in this regard, we want to clarify the following.

Last year, the Office of Large Taxpayers carried out a planned audit of the enterprise regarding compliance with tax, currency and other legislation for the previous 4 years. According to the results of the audit, the controlling body increased the tax liabilities of ArcelorMittal Kryvyi Rih by UAH 7.9 billion.

The procedure for conducting such inspections and registration of their results, provided for by the legislation, gives the taxpayer the right to submit objections to the inspection act within the prescribed period. The company exercised this right, and later also appealed the decisions received to the State Tax Service of Ukraine. As a result of an impartial consideration of the complaint filed in the manner prescribed by the current legislation of Ukraine, the additional liabilities were halved - to UAH 3.5 billion.

Subsequently, ArcelorMittal Kryvyi Rih went to court. At the moment, two court cases are open, the proceedings on which have not been completed. At the same time, Article 212 of the Criminal Code of Ukraine, which appears in the court decision, provides for tax evasion with an obligation already established by the court to pay them. Prior to the entry into force of the court decision, additional tax charges are considered inconsistent, and the company is not obliged to pay them. These are the norms of the current legislation of Ukraine, with which representatives of law enforcement agencies should be well acquainted. We emphasize that the fact of canceling a part of additional charges in the administrative procedure established by law cannot be considered a crime.

According to the results of the audit of the Office of Large Taxpayers, one of the largest additional charges ArcelorMittal Kryvyi Rih received in relation to the rent for subsoil use. The conclusion of the tax inspectors was based on the allegedly incorrect determination of the object of the rent by the enterprise. At the same time, the superior tax authority supported the company's argumentation. Moreover, the judicial practice adheres to a similar position in a similar category of cases. In particular, the courts of various instances in their decisions indicated that the object of the rent is the mineral raw material - iron ore. For example, the relevant decisions were made in favor of the main industrial enterprises of Krivoy Rog: PJSC "YUGOK", PJSC "InGOK", PJSC "TsGOK", PJSC "SevGOK". Thus, the applied methodology for calculating the rent at ArcelorMittal Kryvyi Rih is justified.

ArcelorMittal Kryvyi Rih is one of the largest taxpayers in Ukraine. In 2015-2019, that is, over the past five years, the company paid more than UAH 40 billion in taxes and fees to the budgets of all levels, including UAH 1.8 billion - this is the rent for the extraction of iron ore and UAH 2.1 billion - tax (payment) for land. The total amount of taxes and fees paid for 9 months of 2020 amounted to UAH 4.8 billion. The company systematically pays all taxes and fees in full, as provided for by the current legislation, and at the same time, even in the most critical periods for the industry, invests in production development and eco-modernization. Therefore, unfounded accusations about the possible underestimation of the amounts of taxes paid cause us significant concern and indicate pressure on a foreign investor,

Disclaimer

ArcelorMittal Kryvyi Rih PAT published this content on 20 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 October 2020 16:09:00 UTC


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