04.04.2012

OMP`s associates of litigation practice won a series of court disputes

OMP's associates successfully led a number of litigation support with tax administration and private enterprises, the result of which have taken a decision in favor of OMP's clients

  • In February 2012 OMP` attorneys under the leadership of Partner of court practice Valeriy Bitsyuk sued out approval to the fullest extent of foreign investment enterprise to the District Tax Office concerning cancellation of tax decision notices, total value is more than 2,5 million hryvnia at County Administrative Court of the city of Kyiv. The essence of the dispute lay in the fact that the District Tax Office made tax decision notices as described above due to the fact that the enterprise is thought to assign to gross expenditures expenses in connection with the payment agency services on the grounds that the latter supposedly not related to the economic activities of the enterprise. Also in connection with this enterprise has been reduced amount of tax credit on VAT. In addition, the tax inspectors withdrew from the company gross expenditures, expenses incurred by the company on leased premises for its employees.
  • At the end of February 2012 OMP` attorneys under the leadership of Partner of court practice Valeriy Bitsyuk achieved cancellation for the client's negative decision by County Administrative Court at Kyiv Administrative Court of Appeals and appellate instance adopted a new decision which abolished tax decision notices, total value is more than 38 million hryvnia, issued to foreign investment enterprise by tax authorities. According to the resolution of appellate instance, the District Tax Office due to incorrect application of substantive law (Articles 5, 7, and 11 of the Law of Ukraine "On Profit Tax", and Article 7 of the Law of Ukraine "On Value Added Tax") concluded that income tax and value added tax are undervalued by enterprise. Thus, the tax authorities considered illegal for enterprise to develop costs on amendment of carrying value of the currency after payment to the non-resident for previously delivered goods. In addition, the tax authorities came to the conclusion regarding the illegality of groundless inclusion in gross expenditure and the tax credit on VAT payments made to the dealers for the promotion of goods on the territory of Ukraine. Tax authorities considered that these expenses were not related to the economic activity of enterprise.
  • In March 2012 OMP` attorneys under the leadership of Partner of court practice Valeriy Bitsyuk won case in favor of the client to the Kyiv Administrative Court of Appeal. Thus, the Court of Appeal confirmed the legality of decisions of the District Administrative Court in Kyiv at the suit of the client to the District Tax Office on cancellation of tax decision notices on income tax of enterprise and value added tax. The total value of tax decision notices, taking into account penalties (financial) sanctions - 56 000 hryvnia. – profit tax and more than 8 000 000 hryvnia. - VAT. In this case, the claims of tax authorities have been based on the fact that the enterprise showed the amount of tax invoices in the tax credit which were received from the counterparty in a statement following the date of the invoice tax period. The courts in this case recognized the legitimacy of tax credit formation by enterprise. In addition, the tax inspectors withdrew from the gross amount expenses on counterparty, which in the opinion of the tax, is a fictitious company. Due to the fact that attorneys collected and made available to all primary court documents showing the reality of business transactions - the court came to the conclusion on insolvency of the tax claims, and in this part of tax decision notices.



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