Our lawyers provided professional support for the company in the case against the Kyiv State Tax Service. The case was that the income tax was determined using the method of “imaginary conditional sale of software applications” and the price was set equal to the costs incurred.
This IT company developed and tested software in Ukraine in the outsource mode, the project had strong foreign funding and paid taxes honestly, which is an example of a positive impact on Ukrainian economy by attracting foreign funds.
The tax authorities have unreasonably used an indirect method of determining income tax liabilities, similar in content to the “conditional sale” used in VAT accounting.
EUCON’s lawyers succeeded in convincing the court that such methods were inadmissible, as indirect methods of income tax accounting are used exclusively in transfer pricing or in a tax lawsuit to determine the level of normal prices in certain cases.