Unblocking Tax Invoices in 2026: Court Practice and an Action Plan

In the coming months, we should expect a tougher approach from the tax authorities on "unblocking": as of January 30, 2026, the Supreme Court has "allowed" them to deny registration of a tax invoice to anyone who fails to respond to a notice for additional documents. Is your accounting department sure to respond to every such notice within 5 business days? Check today.

Below, we break down how SMKOR currently works, what grounds for suspension are most common, and how we build a defense using our own case study of a construction company with 32 suspended invoices.

How Many Invoices are Being Suspended in 2026 and Has it Gotten Easier?

Back in 2025, the system suspended 0.76% of submitted tax invoices; in the fall of 2025, the figure dropped to 0.39%, and after the Cabinet of Ministers of Ukraine (CMU) Resolution No. 1048 of 26.08.2025, the government promises to reach 0.2%. The resolution has been in effect since 27.09.2025 and raised the thresholds for unconditional registration: up to UAH 1 million in total monthly supply volume, up to UAH 100,000 per counterparty, and a director can now head up to five taxpayer entities instead of three.

This means that small and medium-sized turnovers have indeed started to get through without suspensions. Does this mean the problem has disappeared? Of course not. One in every eight VAT payers faced a suspension in 2025, and the flow of court cases has not diminished.

Why Exactly Was Your Tax Invoice Suspended?

First, open the notification slip and find the basis for the suspension. The entire subsequent course of action depends on it:

• The taxpayer themselves is deemed risky according to Annex 1 to Procedure (Poryadok) No. 1165, most often under the catch-all clause 8, after which all of the company's invoices are suspended;
• The transaction triggered one of the risk criteria from Annex 3, the classic here being clause 1, the so-called "product code mismatch" ("peresort");
• The invoice was submitted without an accepted taxpayer data table, and the system considers the product or service codes atypical for your business.

Each ground is "treated" differently. We do not recommend preparing a single universal package of documents for all cases: the commission reads explanations specifically tailored to its criterion.

What Does a Suspension for "Product Code Mismatch" Look Like in Practice?

Our client, a construction company specializing in monolithic and waterproofing works, had the registration of 32 tax invoices suspended for amounts ranging from UAH 50,000 to UAH 1,854,402.36. Each notification slip contained the same text: "The volume of supply of goods/services 43.99, exceeds the balance value... which corresponds to clause 1 of the Criteria for Riskiness of Operations," with "D" indicators from 11.78% to 30.49% and "Pcurrent" from 0 to 110,283.33.

Does the system see the specifics of the construction industry? No, it does not. On the "input" side, the company buys rebar, concrete, tile, and adhesive, and on the "output" side, it sells services under the DKPP code 43.99. The purchase codes will never match the supply codes. This is an industry practice, not a tax evasion scheme.

However, a clear explanation to the regional tax authority about the specifics of your business activity often leads to the "unblocking" of a tax invoice. Of course, this is provided that you have taken a high-quality approach not only to drafting the explanation but also to collecting the documents (the most complete package possible!)

What we included in our lawsuit:

1. The notification slips do not reproduce any risk criterion verbatim and do not contain a specific list of documents. The Supreme Court, in its rulings of 30.01.2020 in case No. 300/148/19 and of 20.04.2023 in case No. 380/4746/22, states: without a clear list of documents, the tax authority's request does not comply with the principle of legal certainty. That is, a denial for failing to comply with a vague request is fundamentally impermissible.

A data table with code 43.99 was submitted in advance. The "product code mismatch" under clause 1 of Annex 3 is triggered only by the simultaneous failure to meet the "1.5 rule" and the absence of the code in an accepted data table. The second condition was not met.

All 32 invoices were issued based on the "first event" rule—the receipt of an advance payment under contractor agreements, confirmed by payment instructions and bank statements in accordance with clause 187.1 of Article 187 of the Tax Code of Ukraine (TCU). An advance payment physically cannot create a "product code mismatch."

The grounds for refusal, "failure to provide documents," contradict the grounds for suspension. They suspended for a "product code mismatch" but denied registration for the taxpayer's alleged silence. Courts recognize such decisions as unmotivated.

Positive tax history? Never heard of it!

This is a separate argument that the tax authority consistently ignores. Clause 7 of Procedure No. 1165 directly provides: if a transaction meets a risk criterion, but the taxpayer has at least one indicator of a positive tax history, registration is not suspended at all.

Our client met such an indicator throughout the entire period, as seen in the Electronic Cabinet under the "Monitoring of TIs/ACs" menu. This means that the 32 invoices should not have even been subject to suspension. We attached screenshots from the cabinet to the lawsuit as separate evidence.

We recommend checking your own positive history indicators in the cabinet before each explanation and documenting them with dated screenshots. And don't rely on the commission to check this for you.

Can You Ignore Notices for Additional Documents?

Under no circumstances. The Supreme Court's ruling of 30.01.2026 in case No. 260/224/24 overturned a long-standing practice. Previously, courts considered the provision of additional documents a taxpayer's right, and it was impermissible to penalize someone for not exercising a right. This was especially true if the decision to suspend the TI registration was baseless. Now, the Supreme Court classifies the suspension of registration as a preventive measure, not a sanction, so the taxpayer is obligated to respond to the commission's request. This is unfortunate, as this approach by the highest judicial body is already leading to fewer decisions in favor of taxpayers from first-instance and appellate courts. Usually, the "unblocking" procedure for a TI is initiated by the company's accountant. Lawyers are consulted only when the sole remaining path is a court appeal. At that stage, it is not always possible to correct past "procedural" violations.

As we can see, silence is now interpreted against the business and blocks the path to unblocking even through the courts, regardless of the completeness of the initial package of explanations.

Important! Respond to every notice from the commission in writing and within the 5 business days established by clause 9 of the Order (Nakaz) of the Ministry of Finance No. 520 of 12.12.2019. It doesn't matter how absurd the demand to provide "documents regarding the involvement of subcontractors" may seem when you have only received an advance payment and work has not yet begun. Provide what you have and explain in writing why the other documents do not exist. The tax authority is now widely using the phrasing "the taxpayer did not exercise their right and did not submit additional explanations within 5 business days" in its refusal decisions.

What to Do If Your Company is Added to the 'Risky' List Under Clause 8?

First, remove the status, then unblock the invoices. As long as the risk status is active, all your TIs will be suspended, and any submitted data tables will be suspended under sub-clause 4 of clause 3 of Procedure No. 1165. Tackling individual invoices at this point is pointless.

Removing the risk status is usually not a long process and is easier than "unblocking" invoices. At this stage, taxpayers usually manage on their own. However, it is still better for the company's accountant to do this in tandem with a lawyer. If the company's accounting is in good order, the procedure can take a few weeks. In our experience, it's 2-3 weeks on average. If the accounting has been neglected, it's worth restoring the records or correcting certain deficiencies before contacting the STS authority.

The practice in 2025-2026 has been on the side of business here:

• The Supreme Court, in its ruling of 14.05.2025 in case No. 260/3479/24, confirmed that assigning a risk status must occur upon the submission of a TI/AC for registration, not "autonomously" outside the registration procedure;
• The basis can only be operations from invoices registered no later than 180 days before the date of the decision (clause 6 of Procedure No. 1165);
• Courts consistently overturn "bare-bones" decisions that simply copy the text of clause 8 without citing the tax information code from the STS Directory No. 17 of 11.01.2023 and without documentary evidence.

Submit a notice with documents to the regional-level commission; it has 7 business days to review it. If the decision isn't changed, go directly to court. We recommend not wasting months on administrative appeals of risk status decisions and not accepting informal offers to "resolve the issue": the former rarely works, while the latter creates risks far worse than the suspension.

Will a Taxpayer Data Table Save You?

It will, and this tool was strengthened as of 27.09.2025. Resolution No. 1048 introduced automatic acceptance of the data table for a taxpayer who has been registered as a VAT payer for over a year, has had at least five employees in each of the last 12 months, and whose supply volume under the declared codes exceeds 25% of their total volume.

The second innovation concerns already suspended invoices. After a data table is accepted or a risk status is removed, the TIs/ACs are subject to automatic registration under clause 6-1 of Procedure No. 1165. Furthermore, since 27.09.2025, indicators of a positive tax history are also considered when checking operations for riskiness. This means some invoices can now genuinely be "unfrozen" without any court action.

Did the commission not accept the table? Appeal it. Courts overturn non-acceptance when the decision fails to explain what specific information indicates riskiness and which activity the codes do not correspond to.

How to Unblock a Tax Invoice That Was Issued with an Error?

In our case, one of the invoices, TI No. 7, was mistakenly issued for UAH 360,000 on an actual advance payment of UAH 91,700.33. The tax authority refused to register it. So what now, is the error "stuck" forever? Not at all.

The Supreme Court, in its ruling of 05.12.2019 in case No. 820/5360/17, noted: "tax legislation does not establish a procedure for actions if an error occurs during TI registration... The erroneous tax invoice is suspended: you must complete the registration procedure, and then issue an AC (Adjustment Calculation)."

This means an adjustment calculation under clause 192.1 of Article 192 of the TCU can only be submitted for a registered invoice. Therefore, first, you must secure registration, and only then correct the amount via an AC. An error in the invoice itself is not grounds for refusal.

Where to Start in the First few Days After a Suspension?

1. Open the notification slip in the Electronic Cabinet and identify the grounds for suspension: taxpayer criterion, transaction criterion, or absence of the code in the data table.

2. Check the company's status on the "risky" list. If the status is present, work on removing it first.

3. Gather a document package specific to the transaction: contract, payment instructions, bank statement, expense invoices or acts of acceptance, documents on your own resources and staff, etc.

4. Submit an explanation through the Electronic Cabinet within 365 days per clause 6 of the Ministry of Finance's Order No. 520, but don't delay: every day of suspension is a frozen tax credit for your buyer.

5. Respond to every notice for additional documents within 5 business days, in writing, explaining why certain documents do not exist.

6. After a refusal, file an appeal with the central-level commission within 10 business days or file a lawsuit with the administrative court immediately.

We recommend listing the attached documents in detail in your explanations with their requisites, dates, and numbers, rather than just using the phrase "documents attached." And don't send the commission "everything under the sun": a package not tied to the criterion from the notification slip is read by the commission as a lack of a clear position.

How Long Does a Lawsuit Take and What Does it Cost?

Judicial "unblocking" takes from 6 to 18 months, including the appeal, which the tax authority almost always files. The situation is difficult in Kyiv and the surrounding region. Due to the high caseload of the courts, an appeal can take even longer. The court fee for one non-pecuniary claim in 2026 is UAH 3328; in our case with 32 invoices, the total sum is just over UAH 100,000 (the limit of 10 subsistence minimums does not apply here).

Formulate your claims correctly: to declare the refusal decisions unlawful and cancel them, and to oblige the State Tax Service of Ukraine to register the invoices with their actual submission date. Why the STS of Ukraine, and not the regional office? Because the register, according to sub-clause 14.1.60 of clause 14.1 of Article 14 of the TCU, is maintained by the central body. The Supreme Court, in its rulings of 03.11.2021 in case No. 360/2460/20 and of 28.04.2023 in case No. 640/24227/19, confirmed that obliging the registration of a TI is not interference in the tax authority's discretionary powers.

A successful lawsuit also returns court costs at the expense of the respondent's budgetary allocations.

FAQ

How much time is there to provide explanations after an invoice is suspended?

365 calendar days from the date the tax liability for the invoice arose. But the deadline for responding to a commission's notice for additional documents is different—5 business days—and since January 2026, missing it virtually guarantees a loss.

Can you go to court without an administrative appeal?

Yes. Without an administrative appeal, the deadline to file a lawsuit is 6 months from the day you learned your right was violated. After an administrative appeal, the deadline is shortened to 3 months.

What happens if the invoice is not unblocked?

Your buyer will not receive their tax credit and will likely choose a different contractor next time. Additionally, the risk of your company being added to the "risky" list increases, after which all your invoices will be suspended.

Will the invoice be registered if the 365 days have passed?

Yes, based on a court decision. The registration date is considered the date specified in the decision or the day it comes into legal force, according to clauses 19-20 of Procedure No. 1246 of 29.12.2010, and the invoice is registered by the STS of Ukraine regardless of the register's technical limitations.

Do you need to pay a court fee for each invoice separately?

You pay for each contested refusal decision as a separate non-pecuniary claim. A claim to cancel a decision, along with the derivative claim to oblige registration of the invoice, is paid as a single claim.

Don't wait until suspended amounts start to damage your relationships with clients. Identify the reason for the suspension, respond to every notice from the commission within the 5-day period, and build a strong evidentiary basis for each transaction.