KPMG LawUkraine team represented interests of a major petrol station network in Ukraine

KPMG Law Ukraine team represented interests of a major petrol station network in Ukraine in a dispute with tax authorities regarding the legitimacy of including the company in the 2019 tax audit schedule. The Court of Appeal confirmed the legitimacy of security for the Company’s claim by suspending the order to carry out the scheduled tax audit until the court decision comes into force.

Initially, the Company, when identified its inclusion in the 2019 tax audit schedule, decided to check whether there were any grounds for such scheduled tax audit. KPMG lawyers submitted attorney requests to tax authorities and the State Fiscal Service of Ukraine with regard to the grounds and criteria for Company’s inclusion in the schedule, with due consideration of Company's inherent risks. Upon analysis of responses received from the above authorities, it became clear that tax authorities scheduled the Company’s tax audit without sufficient grounds. Consequently, the Company decided to appeal its inclusion in the 2019 tax audit schedule, as the Company was unreasonably classified by tax authorities as a high- and medium-risk taxpayer. 

Furthermore, KPMG lawyers preventively submitted a motion to secure the claim with the aim to suspend tax audit, since, without such measure, it would be impossible to enforce a court decision and effectively protect the Company’s rights, given that tax audit actually performed makes impractical any further appeal with regard to such tax audit lawfulness. 

The Court of First Instance and the Court of Appel supported the Company’s position and applied security for the claim by suspending the order to carry out the tax audit. As a result, the scheduled tax audit is suspended until the related court decision comes into force, thus allowing minimization of Company's risks and protection of Company's property rights.

The engagement was performed under the leadership of Serhii Popov, partner, Tax & Legal, by LarysaAntoshchuk, attorney, head of Tax Dispute Resolution Practice, Yana Bazia and Maria Oroshan, lawyers, KPMG Law Ukraine.