KPMG Law Ukraine represented the interests of an international real estate investor in a tax dispute
The lawyers of the Tax Dispute Resolution practice of KPMG Law Ukraine successfully challenged the conclusions of the tax audit report regarding the company’s obligations to recognize the financial income from the discounting accounts payable (long-term liabilities) and amortize such discounting for each subsequent balance sheet date.
The court upheld the arguments of the KPMG Law Ukraine team, since the Ukrainian National Accounting Standards do not oblige the company, which keeps its accounting records based on the UNAS, to discount accounts payable (the long-term liabilities). Moreover, there is no methodology for such discounting. Also, in the course of the trial stage, the KPMG Law Ukraine team managed to prove that the UNAS 15 “Income” does not regulate issues on allocation of discounting income to the company. Accordingly, the tax authority made an unlawful conclusions regarding the company’s violation of UNAS 15 “Income”. In addition, the tax authority unlawfully applied the formula for the one-time payment at the end of the maturity, with a reference to the International Financial Reporting Standards and\or the International Accounting Standards, that is why such actions contradicts the provisions of the Tax Code of Ukraine and the Law of Ukraine On Accounting.
As a result, the court found that the tax notice-decisions were unlawful and should be cancelled. Consequently, the property rights of the Company were successfully defended in the court.
The project was implemented under the leadership of Konstantin Karpushin, partner, head of Transfer Pricing and Tax Dispute Resolution practice and Larysa Antoshchuk, lawyer, head of Tax Dispute Resolution practice. Also, KPMG Law Ukraine lawyers Nataliia Musiienko, Yurii Oliynyk and Arthur Horholiuk worked on this project.