By a ruling of the Sixth Administrative Court of Appeals dated October 1, 2019, in Case No. 640/6526/19, the appeal filed by Oleksandra Tananakina, an attorney with the law firm “Barristers,” — Oleksandr Tananakin, on behalf of the plaintiff, “European Credit Group” Credit Institution LLC, the decision of the Kyiv City District Administrative Court was overturned, and the tax assessment notice issued by the Main Directorate of the State Fiscal Service in Kyiv, which was issued following a desk audit regarding compliance with tax legislation concerning the timely payment of income tax liabilities.

The contested tax assessment notice was issued by the tax authority as a result of the business entity’s late payment of its tax liability during a hostile takeover and the unresolved status, during that period, the authority of the persons entitled to dispose of the company’s funds—in particular, regarding the payment of tax liabilities—until the accounts were frozen during the pre-trial investigation.

At the same time, during the appellate review of the contested decision, the appellate court found the appellant’s arguments to be valid, namely that a systematic analysis of Articles 109 and 126 of the Tax Code of Ukraine provides grounds to believe that the legislature envisaged the possibility of applying the consequences of late payment to the taxpayer, in particular, the agreed amount of the monetary obligation, only if the taxpayer is at fault.

The full text of this court decision will be available in the Unified State Register of Court Decisions once it is published for public access.