When can the contract for the recognition of electronic documents be terminated?

The courts of Ukraine considered the case on the claim of the company to the State Tax Inspectorate with the demand to recognize the unlawful unilateral termination of the contract on recognition of electronic documents for submission of reports and to renew the possibility of filing by electronic means in an electronic form of tax reporting.

The local, appellate, and later Supreme Courts decided to satisfy the claim and ordered the STI to renew the contract.

According to the Supreme Court, within the limits of the controversial legal relationship, the law establishes exceptional cases which give the STI authority the right to terminate the contract unilaterally, namely if the taxpayer:

- did not provide a new, strengthened public key certificate instead of the canceled;

- changed the place of registration.

The reason given by the tax authorities is that the plaintiff's absence at the tax address is not sufficient reason for the unilateral termination of the relevant contract, since it does not indicate the absence of a taxpayer at the registered office (change of place of registration).

Moreover, the Supreme Court recalled that Art. 651 of the Civil Code provides the right of the court to terminate an agreement on the demand of one party in the event of a material breach of its terms by the other party and in other cases established by the contract or by law. At the same time, such violation is considered essential, as a result of which the other party to the contract is largely deprived of what it counted upon its conclusion (the decision of the Supreme Court dated 19.12.2018 on the case № 821/561/17).

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