The company, which is part of an international group and a leading manufacturer of wood-based panels, filed a complaint with the Council regarding tax assessments totaling nearly UAH 40 million.
The tax authority disputed the company’s application of reduced withholding tax rates under the Double Taxation Avoidance Convention with Cyprus concerning the payment of interest on a loan. The tax authority argued that the Cypriot company receiving the income was not the beneficial owner of such income, as it allegedly did not have the right to further dispose of it.
The Council participated in the company’s appeal before the State Tax Service of Ukraine and supported the company’s position, noting that the company had provided sufficient evidence of the Cypriot entity’s tax residency and of its active business operations and economic presence in Cyprus.
The Council also pointed out that financial statements and auditors’ reports supporting the company’s position were available but had not been taken into account during the audit. These arguments were detailed by the Council in an official letter to the State Tax Service of Ukraine.
As a result, the State Tax Service of Ukraine accepted the company’s position, supported by the Council, and canceled the additional tax assessments and penalties totaling nearly UAH 40 million.
