Currency Control Penalties in Ukraine: How Businesses Can Challenge a Tax Notice

Foreign trade contracts involving Ukrainian companies are not only a matter of commercial risk. They may also trigger currency control obligations. If a foreign buyer fails to pay for exported goods, a foreign supplier does not deliver prepaid goods, or a payment deadline is missed, the Ukrainian resident company may face not only a dispute with its counterparty, but also a tax notice assessing a currency control penalty.

These cases are especially sensitive when the delay was caused by the foreign counterparty rather than by the Ukrainian business. For example, the foreign buyer may delay payment, the supplier may fail to deliver goods, logistics may be disrupted, force majeure circumstances may arise, or the parties may have a dispute over quality, quantity or documents.

This article is relevant as of 29 April 2026. Currency control rules in Ukraine may change, especially during martial law. Before making decisions in a specific case, businesses should verify the current rules of the National Bank of Ukraine and the facts of the relevant foreign trade contract.

What is a currency control penalty in Ukraine?

A currency control penalty is a financial sanction applied to a Ukrainian resident for failure to comply with the statutory deadlines for settlements under export or import transactions.

In a typical export transaction, the Ukrainian company must receive payment from the foreign buyer within the deadline established by Ukrainian currency regulations. In an import transaction, if a Ukrainian company makes an advance payment to a foreign supplier, the goods must be delivered within the applicable deadline.

The penalty is generally calculated at 0.3% for each day of delay based on the amount of unpaid funds or the value of undelivered goods. The total amount of the penalty must not exceed the amount of the outstanding debt or the value of the undelivered goods.

In practice, this means that a single problematic foreign trade contract may create a significant financial exposure for the Ukrainian company. If the tax authority identifies a breach and issues a tax notice, the company must either pay the assessed amount or challenge the decision through an administrative appeal or in court.

Which settlement deadlines apply?

The general regulation of the National Bank of Ukraine provides a baseline settlement period of 365 calendar days for export and import transactions. However, during martial law, special currency restrictions may apply, including shorter or sector-specific deadlines.

For many transactions, the applicable period has been 180 calendar days, while certain categories of goods may be subject to special rules. For example, in 2026 the National Bank of Ukraine announced an increase to 270 days for the export of certain agricultural and specialized machinery from 1 March 2026.

For this reason, before assessing the risk of a penalty, it is necessary to determine:

• the date of the export or import transaction;
• the commodity code;
• the date of customs clearance or advance payment;
• whether the transaction is below the materiality threshold;
• whether special NBU exceptions apply;
• whether documents for extending the deadline were submitted;
• whether there is a court or arbitration claim against the foreign counterparty.

An error in determining the starting point of the settlement period or applying the wrong deadline may lead to an excessive penalty and may become a ground for challenging the tax notice.

When do businesses usually receive a tax notice?

The most common situations include the following:

1. The foreign buyer has not paid for exported goods.
The Ukrainian company has delivered the goods and completed customs clearance, but the foreign buyer has failed to pay or has made only a partial payment.

2. The foreign supplier received an advance payment but did not deliver the goods.
The Ukrainian company paid under an import contract, but the goods were not imported into Ukraine within the statutory deadline.

3. The bank did not close currency control supervision.
Even if the parties have partly resolved the commercial issue, the bank may not have sufficient documents to close currency control supervision.

4. The tax authority incorrectly calculated the period of delay.
This may happen if the tax authority did not properly consider the customs clearance date, partial payment, contract amendments or documents confirming performance.

5. The company refers to force majeure but lacks evidence.
War, logistics disruptions or general economic difficulties do not automatically eliminate the risk of a currency control penalty. The company must show how specific circumstances prevented performance under the particular contract.

What should be checked after receiving a tax audit report or tax notice?

After receiving a tax audit report or a tax notice assessing a currency control penalty, the company should not limit its response to general objections. A legal and financial review of the tax authority’s calculation is required.

The company should check:

• whether the starting date of the settlement period was determined correctly;
• whether the correct deadline was applied to the transaction;
• whether partial payments or partial deliveries were taken into account;
• whether the penalty base was calculated correctly;
• whether the penalty exceeds the amount of debt or the value of undelivered goods;
• whether a court or arbitration claim against the foreign counterparty was considered;
• whether there were grounds to suspend the period due to force majeure;
• whether the tax notice is properly reasoned;
• whether the tax authority complied with procedural requirements.

Evidence of the resident company’s active conduct is particularly important. If the company sent claims, negotiated with the foreign counterparty, initiated court or arbitration proceedings, or took other steps to recover the debt, this may strengthen its position.

How to challenge a tax notice on currency control penalties

A tax notice may be challenged through an administrative appeal before the higher tax authority or in an administrative court.

An administrative appeal may be appropriate when the tax authority made an obvious calculation error or failed to consider certain documents. However, in complex currency control disputes, court proceedings are often more effective, especially when the penalty amount is significant, the applicable deadline is disputed, force majeure is involved, or the case is connected with a foreign counterparty’s breach of contract.

In court, the company should not merely ask to “reduce the penalty”. It should demonstrate that the tax notice is unlawful in full or in part.

Possible arguments may include:

• incorrect calculation of the delay period;
• application of the wrong settlement deadline;
• failure to account for partial payment or partial delivery;
• incorrect currency rate or penalty base;
• insufficient reasoning in the tax notice;
• lack of proper evidence of the debt used as a penalty base;
• existence of a court or arbitration claim against the foreign counterparty;
• confirmed force majeure circumstances;
• procedural violations during the tax audit.

When can a court or arbitration claim against the foreign counterparty help?

If the delay was caused by the foreign counterparty, correspondence alone may not be enough. In certain circumstances, the acceptance of a claim by a court or international commercial arbitration against the foreign debtor may affect the calculation of the settlement period and the penalty.

However, this strategy carries risks. If the claim is rejected, left without consideration, not accepted for proceedings, or the proceedings are closed without actual recovery of funds, the penalty risk may return.

Therefore, the legal strategy should be comprehensive. The company should work simultaneously with the tax authority, the bank, the contract evidence and, where necessary, the recovery of debt from the foreign counterparty.

Force majeure: why a general reference to war is not enough

Force majeure may be relevant in a currency control dispute, but only if it affected the performance of the specific contract. The company must prove not only the existence of extraordinary circumstances, but also a direct connection between those circumstances and the failure to receive payment or deliver goods within the required period.

It is a mistake to assume that any wartime, logistics or economic difficulty automatically removes the risk of a currency control penalty. The company should show what exactly prevented performance, during which period, why alternative performance was impossible, and what steps were taken to minimize the consequences.

Documents needed to challenge a tax notice

A strong challenge requires a complete evidence package, which may include:

• the foreign trade contract and amendments;
• invoices, specifications and acceptance documents;
• customs declarations;
• bank statements;
• SWIFT messages;
• correspondence with the foreign counterparty;
• formal claims and responses;
• documents confirming partial payment or partial delivery;
• documents concerning quality, quantity or damage to goods;
• force majeure certificates or supporting evidence;
• evidence of filing a court or arbitration claim;
• court or arbitration procedural documents;
• an alternative penalty calculation;
• objections to the tax audit report;
• an administrative appeal;
• a claim to the administrative court.

The earlier these documents are collected, the stronger the company’s position will be. Waiting until the tax notice is already issued may lead to missed deadlines and weaker evidence.

How to reduce the risk at the contract stage

The best protection is prevention. A foreign trade contract should be drafted in a way that allows the Ukrainian company to quickly prove its position before the bank, the tax authority or the court.

The contract should clearly regulate:

• payment and delivery deadlines;
• the list of documents confirming performance;
• acceptance procedure;
• liability of the foreign counterparty for delay;
• penalties, damages or indemnity clauses;
• claim procedure;
• jurisdiction or arbitration clause;
• force majeure confirmation procedure;
• obligation to provide documents required for currency control;
• termination and refund mechanisms.

Companies that regularly work with foreign counterparties should maintain an internal calendar of foreign trade deadlines. This helps identify currency control risks before the bank or the tax authority raises the issue.

When should a business contact a lawyer?

Legal assistance may be necessary if:

• the company has received a request from the tax authority;
• the bank has not closed currency control supervision;
• the foreign counterparty has delayed payment or delivery;
• the company has received a tax audit report;
• a tax notice assessing a currency control penalty has been issued;
• the penalty amount is significant;
• recovery of debt from a foreign counterparty is required;
• there is a risk of missing appeal deadlines;
• the company needs objections, an administrative appeal or a court claim.

If a company receives a tax audit report or a tax notice assessing a currency control penalty, it is advisable to contact a tax lawyer in Ukraine. The lawyer can review the tax authority’s calculation, assess the grounds for appeal, prepare objections, an administrative complaint or a court claim, and help build a legal position based on the documents under the foreign trade contract.

If the penalty risk is caused by the foreign counterparty’s failure to perform the contract, the company should also consider international debt recovery. In such cases, it is important not only to challenge the tax notice, but also to recover the debt or enforce the decision in the debtor’s jurisdiction.

Conclusion

A currency control penalty in Ukraine is not a minor technical sanction. It can become a serious financial risk for a business involved in foreign trade. The amount of the penalty may grow quickly, and mistakes in deadlines, documents or evidence may significantly complicate the defence.

If a company receives a tax audit report or a tax notice, it should promptly review the tax authority’s calculation, settlement deadlines, contract documents, actions of the foreign counterparty, administrative appeal options and court strategy. In complex foreign trade disputes, an effective approach usually combines three elements: challenging the tax notice, working with the bank and recovering the debt from the foreign counterparty.