Preparation for a Tax Audit

Starting from 18 March 2020, a moratorium on tax audits has been in effect in Ukraine due to quarantine measures to counteract COVID-19, and subsequently due to the declaration of martial law in Ukraine. Starting from 1 December 2023, scheduled tax audits have been resumed for taxpayers that meet the defined criteria.

As the moratorium on tax audits also included suspending the tax limitation period, taxpayers should be prepared for tax audits for periods that will significantly exceed the usual 3-year period.

• Tax diagnostics for a selected period or a period open for tax audit.
• Tax advice on specific issues/transactions/approaches to financial and tax accounting, including analysis of source documents and other documentation; assessment of your company's position, possible tax accruals, and recommendations on strengthening your company's position.
• Evaluation and analysis of transactions with non-residents, including:
  • analysing of agreements and related transactions with non-residents, including assessment of the correctness of qualifying such transactions and the adequacy of their tax accounting
  • conducting a sample or complex tax due diligence of all transactions with non-residents for a selected period/period open for tax audit, including providing recommendations to reduce the risk of additional accruals during the tax audit
  • evaluating transactions with non-residents for compliance with the requirements of business purpose and use in economic activity, including recommendations on strengthening your company's position in proving the existence of such transactions' business purpose and use in economic activity .
  • preparing documents that will help strengthen your company's position during a tax audit or when challenging an audits’ results (e.g. a set of documents that will substantiate the status of a non-resident as beneficial owner of income and, accordingly, the legitimacy of applying reduced rates under Double Taxation Conventions, etc.)
  • preparing responses to inquiries from the Ukrainian tax authorities.