Appeal it properly or go bankrupt

Taxes are the most unloved burden for businesses. There have always been, and still are, huge problems in the relationship between business and the tax authorities in our country. There are different business associations actively fighting with the state to create a really effective mechanism of protection against abuse of power by the tax authorities. In the meantime, businesses have to be guided by the current mechanism, the current norms of the legislation of the Kyrgyz Republic.

An appeal against the decisions of the tax authorities provided for in Chapter 20 of the Tax Code of the Kyrgyz Republic will be discussed, because many people make a lot of procedural mistakes, which then cost the taxpayer a lot of money, all because it all seems simple enough at first sight.

An appeal against the decision of the tax authority can be filed with the competent tax authority, which is now the State Tax Service under the Ministry of Economy and Finance of the Kyrgyz Republic. An appeal must be filed within 30 calendar days from the day following the day of service of the decision of the tax authority to you.

In the appeal period, the tax office does not enforce its decision, and an appeal against the decision suspends its effect.

If you do not appeal against the decision within 30 calendar days or if you file a complaint after this time limit, this complaint will not be considered and the responsible tax authority will reply with a letter saying that it is not considering your complaint. The decision of the tax authority becomes fully enforceable and the debt is recognised by the taxpayer, giving the tax authority the right of undisputed collection. This means that you have exhausted all the tools to appeal against this debt and further disputes can only prolong the recovery process and no more.

A complaint must comply in form and content with the Tax Code of the Kyrgyz Republic, otherwise the authorised tax authority shall return it with reasons. The return does not prevent the complainant from re-filing the complaint within 10 calendar days following the day of receipt of the returned complaint, if errors in the original complaint have been corrected.

Note: If your complaint is left without consideration or returned by the competent tax authority, such a response is not a decision by the competent tax authority, it is a simple letter, which in essence refers to an action by the competent tax authority, which can also be appealed to the courts. Accordingly, if a claim is made against a decision on an audit and an answer to leave it without consideration or to return it, the court will not accept the claim or will dismiss the proceedings during the hearing on the grounds that the pre-trial procedure has not been passed, as the authorised tax authority has never made a decision.

It should also be noted that if there is a criminal case for understatement of tax liability, the complaint is not subject to review by the tax authorities. This means that the taxpayer has the right to bypass the pre-trial procedure and go directly to court to challenge the decision of the tax authority. In practice, however, the court, without going into such details, may simply refuse to accept the claim with the reasoning that the decision of the tax authority is not subject to separate appeal from the decision of the authorised tax authority, that a pre-trial procedure is necessary. For this reason, we always recommend that you file a complaint with the competent tax authority anyway, so that it responds that due to the existence of a criminal case, the complaint is not subject to consideration. Thus, you can attach this answer when filing a claim and let the court know that you did not skip the pre-trial procedure and took all possible measures.

The authorised tax authority generally considers a complaint within 30 calendar days, but there may be cases of extension, interruption of the period, taking into account which the total period of consideration should not exceed 90 calendar days. If the authorised tax authority does not make a decision on the complaint within this period, the complaint is considered satisfied. Based on the results of the review, the authorized tax authority must issue a decision, which must contain the mandatory requisites established by the Tax Code of the Kyrgyz Republic.

The decision of the competent tax authority may be appealed in court within 3 months from the date of its delivery to you. It is the decision of the competent tax authority, i.e. the decision of the tax authority on the inspection that is not subject to separate appeal, as the pre-trial procedure for settling the dispute is mandatory in this case, otherwise the court will simply refuse to accept the claim.

Since these are administrative legal relations, the procedure for judicial proceedings in such cases is established by the Administrative Procedure Code of the Kyrgyz Republic.

Thus, the process of appealing against decisions of the tax authorities is very time-consuming, complex in terms of compliance with all the procedural nuances. In fact, not every lawyer knows all the intricacies of these legal relationships, and if there has not been any experience of dealing with such cases, not every lawyer will be able to understand them immediately.

A very important aspect in this legal relationship is a prompt response and thorough preparation, respecting all procedural requirements set out in the Tax Code of the Kyrgyz Republic, as just one mistake in this process can lead you to bankruptcy, even though the decision of the tax authority may in fact be unlawful.