Farmers from all over Ukraine complain about problems with tax audits of the licensing procedure for storing fuel for their own needs. Classics of the genre: The State Tax Service (STS) comes to them, finds minor violations in the procedure - and fines 500 thousand UAH, often blocks bank accounts. The farmers do not understand what to do next and how to act: after all, tomorrow they will go out into the field for sowing, and today they cannot buy either mineral fertilizers or seeds. We see the risk of sowing disruption in some farms. It turns out that the one who works is also beaten. Respectable farmers who work honestly, pay taxes, fled and took licenses to store fuel. As a result, we got problems.

Ivan Tchaikovsky, blog author, MP, founder of Agroprodservice

According to the tax authorities, the intensity of inspections of compliance with fuel storage licenses has tripled, and in fact, almost 2.5 thousand inspections were carried out and 267 licenses were canceled as a result. And these are only those cases that did without corruption, and how many such checks were “decided” in the shadows ?!

I worked with this problem with the main agricultural associations, and we identified 5 key issues (which our farmers face when licensing fuel) and possible ways to solve them.

Question number 1. Fuel licensing should be replaced by declaration.

During inspections, tax inspectors are guided by the provisions of the law of Ukraine on the regulation of fuel turnover, that is, the STS authorities request a large number of documents. In particular, agrarians, according to tax authorities, are subject to the requirements of the Order of the Ministry of Fuel of 20.05.2008 N281 / 171/578/155 "On approval of the Instruction on the procedure for receiving, transporting, storing, dispensing and accounting for oil and oil products at enterprises and organizations of Ukraine" (hereinafter - instructions). This order was developed to regulate the activities of enterprises in the fuel and energy complex and contains onerous regulation of enterprises with a high risk of danger. At the same time, fuel marketing / storage activities are now subject to licensing.

How do I solve this?

There were two proposals from agrarian associations:

1) cancellation of the instruction, since the licensing activity must be regulated through licensing conditions. Formally, this instruction, in principle, should not be applied, since there are no norms in the legislation for the authorities to establish the corresponding requirements. Thus, it is possible to seek its abolition through the courts, but it is more correct and logical to abolish it at the level of the executive structures of the state.

2) At the level of the law, establish that the bodies of the state tax service, when carrying out inspections for compliance with the norms of the law on the regulation of fuel turnover, have the right to check only licensing requirements and documents provided for by such licensing requirements. At the same time, there are currently no licensing requirements for a license to store fuel for own consumption. Therefore, for this type of license, it is only possible to verify the accuracy of the data specified in the application for a license.

Problem # 2. Storage containers and their certification.

The VRU made changes to the conditions for obtaining a license for storing fuel for its own needs, which entered into force in 2021. When obtaining a license, business entities were obliged to indicate the volume of all containers (both stationary and non-stationary) that are used for storing fuel. In practice, such requirements cannot be realized, because it is impossible to accurately calculate how many non-stationary containers (barrels) will be used for storing fuel. Previously, the volume requirement only applied to tanks (stationary fuel storage facilities). That is, we must understand: there used to be certain certified barrels, and we clearly knew their capacity. Now we see that different containers are used, and they do not have any certificate. To make such a certification of capacity, it takes time, resources, that is, the procedure is lengthy and financially costly.

Fuel storage tank

How do I solve this?

It is necessary to make changes regarding the non-proliferation of the requirement to indicate the volume of containers in an application for a license to store fuel for own consumption in the Law of Ukraine "On state regulation of the production and circulation of ethyl, cognac and fruit alcohol, alcoholic beverages, tobacco products, liquids used in electronic cigarettes , and fuel "(hereinafter - the law on the regulation of fuel turnover).

Problem number 3. Cancellation of already accrued penalties

The law provided for the obligation of agricultural producers to obtain a license for storing fuel for their own consumption by March 1, 2020. At the same time, for various reasons, a significant number of farmers did not manage to obtain licenses before March 1, 2020, but received them later. The prevalence of this fact was revealed by the regulatory authorities, having begun checks on business entities regarding compliance with the legislation on regulating fuel turnover. If, according to the primary documents, the tax authorities see that since March 1, 2020, the farmer has been buying fuel, but there has been no storage license, they interpret this as storing fuel without a license, regardless of whether the farmer has a license at the time of the inspection, or not. The law provides for high liability - a fine of 500 thousand UAH for storing fuel without a license or selling fuel if there is a license only for storing fuel for their own needs.

We understand what spring is for farmers - this is the sowing season, and we must quickly weed out. And everyone went to get licenses, although in the end they received fines from the tax authorities, acting according to the law.

How do I solve this?

It is necessary to abolish fines for late receipt of a license for business entities that have already received licenses at the time of the audit. This can only be realized by amending the legislation. That is, these fines for farmers should be abolished, because no one deliberately sabotaged the receipt of licenses - there was sowing, as an objective factor.

It is also necessary to establish the proportionality of the amount of the fine for storing fuel without a license with the actual volume of fuel that was stored by the relevant business entity, or the volume of storage capacity.

Problem # 4. Mixing fuels purchased from different manufacturers in one storage container

Farmers buy fuel from different manufacturers, so different manufacturers give different certificates. But when this fuel enters one storage tank, the current Tax Code treats this process as fuel production. But this is absurd: the farmer simply stores all the fuel in one container, and does not produce a new type of fuel. When an inspector comes, he shows the norms of the Tax Code law on mixing different types of fuel and fines the agricultural producer.

How do I solve this?

Amend the GCC and the law on the regulation of fuel turnover and establish that the production of fuel does not mean mixing a business entity with fuel of any type and grade, which is stored by it solely for the needs of its own consumption on the basis of an appropriate license and / or declaration of fuel storage locations in accordance with the law regulating the production and circulation of fuel.

Question number 5. Operations for refueling third-party equipment under construction contracts

Farmers who have several legal entities and carry out centralized purchases and storage of fuel will actually refuel the equipment of different legal entities, which can be considered by the STS authorities to sell fuel if they have a license only for storage for their own consumption - a fine of UAH 500 thousand. But this is also absurd. Indeed, several enterprises can have one owner. And there may be one gas station for them.

How do I solve this?

It is necessary to synchronize the norms of the GCC and the law on the regulation of fuel turnover by amending the law on the regulation of fuel turnover and establishing that the sale of fuel is not the operation of refueling the equipment of third parties under contractual agreements for the processing of land plots of the respective owner of the fuel.

Agricultural machinery

Many farmers also use the services of agricultural machinery. Sometimes, under such contracts, equipment is taken without refueling, because it is from an agricultural manufacturer. And the tax service regards this fact as a kind of implementation and fines.

Finally: I would like to advise the tax authorities to sort it out in parallel with the issue of "black" gas stations. After all, we all travel between cities or even in the city, and we see that there are often "buses" with signs "Buy / sell diesel fuel". I am convinced that their "drivers" do not pay 780 UAH for a license and also do not pay a 500 thousand hryvnia fine. Let's put things in order in this matter, because there is sold, among other things, fuel stolen from the same conscientious farmers. In the meantime, the situation with the bleaching of the fuel market looks very skewed in our country: for every missed comma, those who enter the legal field are fined, that is, honest farmers are beaten.

Ivan Tchaikovsky, MP, founder of Agroprodservice

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