Client
Representative office of a foreign company (UAB “Axis Industries”), which implemented an international project under the auspices of the EBRD (installation of heat meters).
The essence of the dispute
The tax authority attempted to reduce the amount of the client’s negative VAT value (by over UAH 9 million), questioning the formation of the tax credit and classifying a significant portion of the company’s existing receivables as doubtful/unreliable due to the expiration of the term for fulfilling the obligations.
Result
Complete victory in three instances. The courts found the tax authority’s actions unlawful, confirming the legality of the client’s accounting and reporting. The Supreme Court (Administrative Court of Cassation) upheld the decision in favor of the company, setting an important precedent.
The meaning of the case
The case concerns the protection of the rights of international contractors in the implementation of large projects in Ukraine and establishes key principles regarding the limits of the powers of tax authorities in the reclassification of receivables.
The head of the litigation practice, attorney Iryna Shramko, worked on this case.